Measured Response: PPM Ratings Anger Stations

NEW YORK Arbitron’s new ratings system for radio, the Portable People Meter, or PPM, has been in test mode for the better part of a decade. But broadcasters say the measurement company still hasn’t got it right and that the service, currently being rolled out market by market, is riddled with inaccuracies.

Despite those concerns, the PPM has been deployed as the official currency for buying and selling radio ads in two markets, Houston and Philadelphia, and the ratings company has established an aggressive timetable to roll out the service to 40-plus additional cities over the next three years.

The PPM started testing here last month and is scheduled to become the official ratings yardstick for the market at the end of December. But complaints from four major radio groups and separate objections from a number of local stations have put that timetable in doubt and may cause delays in the rollout of the service. Some station managers said the system is flawed and has shown unexplained audience drops so severe they said they’d be put out of business. “This is about the ability of some of these radio stations to survive,” said Charles Warfield, president and chief operating officer, Inner City Broadcasting, New York.

Some buyers, however, said the stations are overreacting and that the PPM is clearly the system that will be used to buy and sell radio ads in the future. Those buyers accuse the broadcasters of dragging their feet and complaining because PPM shows lower ratings for their stations, and will hold them more accountable. But other buyers said a delay may be necessary to resolve outstanding concerns.

The PPM is a pager-size device worn by a sample of listeners throughout the day to record all radio signals they are exposed to. It’s designed to replace the decades-old diary ratings system, which most buyers and sellers agree is inaccurate.

Arbitron wasn’t saying much about the controversy last week. A company rep confirmed that Arbitron president Steve Morris last week sent responses to station groups Clear Channel Radio, Cumulus Media, Cox Radio and Radio One indicating that he wants to meet with them “as soon as possible” to discuss their concerns about the PPM.

The Arbitron rep declined to comment on specific grievances, saying that was a matter to be discussed privately with clients. In a joint letter sent to Arbitron on Nov. 14, the four groups complained that sample sizes across ethnic groups and 18-to-34 year olds were deficient, resulting in inaccurate ratings where PPM is currently deployed. The groups demanded “an action plan to correct these matters within 30 days.”

“It is absolutely a flawed system,” said Warfield of Inner City. “There is an ethnic bias that is built in to this methodology that Arbitron is rolling out.” Mainstream stations are also down, in some cases 50 percent in ratings, according to both buyers and sellers.

But ethnic stations—including those targeting African Americans and Hispanics—in all three markets have taken the biggest ratings hits, said Warfield, with drops as large as 70 percent. “There is no way in the world that the top radio stations in New York or Philadelphia suddenly go from being No. 1, 2 or 3 to 8, 9, 10 or whatever the rating happened to have been,” he said. In New York, Inner City’s WBLS was ranked No. 1 in Arbitron’s summer book and fell roughly 70 percent to No. 12, according to October PPM ratings. “This issue must become a public dialogue at this point,” Warfield said. Asked about possible legal action, he said Inner City hasn’t ruled it out.

Frank Flores, vp and general manager for New York Hispanic outlets WSKQ and WPAT agreed. “Arbitron’s methodology just doesn’t seem to work in terms of measuring our listening,” he said. “The evidence is in the dramatic drop-off in all of our stations.” He noted, for example, that WPAT dropped from eighth to 20th place with the switch to PPM. “We didn’t change the format, we didn’t change the personalities, we’re delivering the same radio stations we delivered in the summer. So you wonder, where did this come from?” Flores said.

Both Warfield and Flores said they want Arbitron to delay making New York a PPM market until the issues are resolved. “If they don’t measure the 8 million people in New York correctly, what will they do in the rest of the country?” asked Flores. “It’s an industry issue.”

Buyer reaction was mixed last week. Some said a delay wouldn’t hurt. But others, stressing that diaries are outdated, said the industry must move forward and correct flaws as they are detected. Using the PPM as a currency is “premature,” said Dennis McGuire, vp, regional spot director, Aegis Group’s Carat. “We need a couple more [PPM] books to see how the audience patterns start trending.”

Kathy Crawford, president of local broadcast for MindShare, said a delay is likely, given the validity of sample-size concerns. “We need a system that makes radio accountable,” she said. That means one buyers can use to forecast reliably, and then buy ads based on guarantees, which have been rare with diaries. Otherwise, she said, “why am I doing it?”

But Maribeth Papuga, svp, director of local broadcast at Publicis Groupe’s MediaVest, hopes the PPM rollout is not delayed. “We’re never going to make progress if we don’t move ahead,” she said. “The world is changing so fast, and nobody has the answer to what the right methodology is. And we’ll never find out if we don’t start testing in real time.”

Another buyer said the radio groups are stalling needlessly. “They don’t want this system, flawed or otherwise,” the buyer said. “With diaries, they haven’t been accountable. They’ve been getting a free ride.”