With the roll-out of PPM in full swing, radio's focus has been on radio ratings in the major markets. Despite controversies such as non-compliance, ethnic sampling, and lower listenership with PPM, there appears to be a general consensus that passive electronic measurement provides more accurate listening estimates than the diary methodology. (We believe there has been too little discussion of the philosophical differences between measuring radio with diaries and meters, but the industry is not in the mood to deal with that.) In any case, after three decades of defending the diary methodology, Arbitron seems to have embarked on a mission to destroy the credibility of the diary methodology.
This may help Arbitron sell PPM to broadcasters and media buyers, but the dismissive tone towards diaries Arbitron has taken in defending PPM ignores the fact that the majority of markets are measured by diary and the majority of markets will continue to be measured by diaries for years to come. Arbitron surveys more than 300 markets. Currently there are only ten PPM markets along with four embedded markets. Why trash something that the majority of broadcasters rely on?
So in the debate over PPM versus diaries, we should not forget that the majority of broadcasters will be quoting diary based ratings for many years to come. Media buyers (who are being bombarded with information touting the benefits of PPM) will be buying off diary based numbers for most markets. It is therefore in the interest of the majority of US radio stations to have the most accurate and useful diary based ratings information possible. With Nielsen Media entering radio measurement, we have the first truly competitive radio measurement environment since the 1970s. And we have a company with a vested interest in producing better diary-based ratings.
We were surprised by the level of vitriol leveled at Nielsen’s decision to use diaries. Radio pundits almost universally declared it a step back for radio. More than a few medium market broadcasters, the ones most likely to benefit from Nielsen’s entry, seem ambivalent about Nielsen. Industry opinion leaders have been strangely quiet about the move, and yet the company’s entry is potentially quite beneficial for all of radio. It wasn’t too long ago that RAJAR, the UK’s not-for-profit ratings service decided to abandon PPM and work instead on developing an on-line diary. This decision was particularly ironic for Arbitron since the first live PPM test was conducted in the UK. Unlike US broadcasters who gave PPM a perfunctory look-over before accepting it, UK broadcasters gave PPM an extensive examination and collectively decided that while PPM had some advantages over diaries, the problems out-weighed the advantages. If an entire nation elects to use diaries over PPM, is Nielsen's decision to use diaries really as wrong as it has been portrayed?
New competition always ultimately improves a product or service. Take telephone service in the US. For over 80 years American Telephone and Telegraph had a monopoly in the US. Service was expensive and the products offered changed very slowly. Then in the 1980s AT&T was broken up and the competition that followed fueled rapid innovation and lower prices for telephone products and services. Competition leads to innovation, so Nielsen’s entry into radio measurement is a significant positive event for all broadcasters, something that broadcasters should welcome, not deride.
As reported, Nielsen's plans represent a significant methodological improvement in condensed market measurement. Larger samples will reduce the extreme wobbles that condensed markets suffer. The tweaking of the diary may uncover better ways to measure radio. Any company entering radio could be beneficial if it leads to improvements to diary measurement, but Nielsen's entry adds an additional potential benefit.
Fair or not, television is radio’s big brother and our big brother gets far more attention (and dollars) than radio. Nielsen is the leader in television measurement. In addition, while it is best known for its television ratings, Nielsen is a large company actively pursuing measurement initiatives across a broad range of new media. One of radio’s problems is that there is no buzz about radio. We are a backwater of media, rarely included in cross-media studies. Even Arbitron itself recently left radio out of a cross-media study. We are just not top of mind, so there is little interest in measuring radio. Nielsen’s entry into radio suddenly raises the profile of radio. Perhaps media observers will say, "If Nielsen is going into radio, maybe we should be paying more attention to radio."
Harker Research wanted to test whether there were possible image benefits to radio with Nielsen’s entry by comparing the perceptions of Nielsen against Arbitron. If Nielsen has a higher profile, its entry into radio measurement will help the industry. If it does not, it may still help by aiding innovation in the diary methodology, but it may not help our buzz factor. So we developed a brief study to test our hypothesis. Our questions were brief. We asked media buyers which company they thought was more professional. We asked which company provided more credible rating information. And since Steve Morris of Arbitron threatened to begin measuring television, we asked which service they would use if the two companies both offered radio and television ratings. In all areas Nielsen out-scored Arbitron.
Media buyers believe Nielsen is more professional by a 32% to 21% margin. Media buyers believe Nielsen provides more credible rating estimates by a two to one margin, 36% to 18%. If both companies offered television and radio ratings, media buyers would choose to use Nielsen rather than Arbitron, 43% to 32%.
So there is a good chance that Nielsen’s entry into radio measurement will help radio’s credibility. Nielsen is well respected and one vendor supplying television and radio ratings side by side should give radio a boost. This alone should help radio. Nielsen has promised more, however. One of Nielsen's pitches is that it will incorporate "single-source" sampling features, in which participants would provide usage of products and services, as well as other media. This means that these small condensed markets will have information that large market stations pay extra for (if the information is available at all). Nielsen is already active in Internet measurement and television rating subscribers now have access to Internet usage by the television rating panelists, so we can expect even more cross-platform measurement if Nielsen moves into larger radio markets.
As part of the survey, we asked media buyers how important cross-platform ratings were. It turns out that cross-media measurement is very important to media buyers. 43% of media buyers say it is very important, and an additional 46% say it is somewhat important. In other words, 89% say it is important to have usage measurement across media platforms.
While Arbitron has touted PPM as a means to measure any audio based medium, there has been very little said by the company about actually measuring any medium other than radio (except in special commissioned projects). This is one area where Nielsen is clearly ahead of Arbitron. If Nielsen follows through with its promises, small markets may have a new tool to compete against other media. Let’s hope that Arbitron responds by providing the same information (at no charge) in larger markets.
How the study was conducted
Our clients provided the contact information for nearly 100 key radio media buyers. The media buyers were those who regularly buy radio, so the views expressed were from the perspective of the radio time buying community, and presumably would favor Arbitron. By telephone Harker Research interviewers contacted as many of these buyers as possible during the week of December 1st. We ultimately completed interviews with 62. This is a significant proportion of the universe of media buyers, so the results are a reliable representation of the views of all radio oriented media buyers.
We first confirmed that the participant bought radio time and then proceeded to ask the four questions. For each comparison question they could choose either Arbitron or Nielsen as a response, but we also accepted "don’t know" or "both." That is why the two responses do not add to 100%.