Radio InSights

Brian Wieser: You Blew It

PPM produces listenership estimates that differ from diary based estimates–mostly lower estimates. Consequently, trending diary and PPM based numbers can produce misleading results and lead to erroneous conclusions.

Don’t take our word for it. This is what Arbitron has to say:

Different measurement methodologies can and do produce different results. We upgraded our measurement methodology, and the scale has changed accordingly.

We would think that “experts” who regularly deal with listening estimates would understand this, but apparently not. Interpublic’s Magna Global SVP Brian Wieser, who is the company’s Global Media Forecaster, recently generated headlines by noting that radio listening had dropped from 300 billion hours to 270 billion hours in 11 years.

The problem is that the comparison is meaningless.

He used RADAR estimates comparing the 1998 numbers to 2009 numbers. We suspect that most broadcasters don’t pay much attention to RADAR, and don’t know anything about it. But when any expert using any data declares radio on the ropes, it generates headlines.

Briefly, RADAR (Radio's All Dimension Audience Research) is a quarterly listenership survey done for national networks. RADAR was produced by Statistical Research Inc (SRI) until 2001, then sold to Arbitron. Arbitron has produced the estimates since. RADAR started out as a 12,000 respondent telephone survey. After Arbitron took over, it gradually became a diary survey, and now Arbitron combines diary and PPM data to create the estimates.

So Mr. Wieser is comparing 1998 estimates based on a telephone survey to 2009 estimates based on some amalgam of diary and PPM estimates. That’s a problem.

Arbitron says that different methodologies produce different results. Anyone old enough to remember when Birch competed with Arbitron knows that telephone estimates differ from diary estimates, and we’ve already seen how much lower PPM estimates are from diary estimates.

Mr. Wieser should understand this. He apparently doesn’t. The fact that he found only a 10% drop in total hours comparing 1998 telephone estimates to 2009 estimates with PPM in the nation’s top 10 markets is actually quite amazing.

It suggests that radio is considerably more resilient than its critics believe. It is further evidence that media consumption is not a zero-sum game and that new media consumption is not at radio’s expense. 

Unfortunately, in our current environment no one wants to believe that. It is easier for Mr. Wieser to grab headlines by cooking up bogus trends that confirm the conventional wisdom.

New Technology Targets Consumers Anywhere

In a recent article by Laurie Sullivan in MediaPost's Behavioral Insider, she explains how new technology would allow advertisers to target consumers anywhere they consumed media. Below is an expert from the article "Targeting Consumers Anywhere They Consumed Media".

"AudienceScience and Hulu inked a deal last week that could eventually move from the computer screen in the home office to the living room TV. The agreement tests the behavioral targeting technology on Hulu's pure-play video ads."

"As part of an effort to support the massive amounts of data coming in from the little tags, AudienceScience has built the capability to pull and store more than two billion behavioral events each day. The system stores the data for 90 days before purging it. "We have about 200 billion behavioral events to look at every day," Hirsch says. "So, when we have advertisers searching for people that have researched and want specific things, we have massive amounts of information to create target segments, all with non-personally identifiable information."

What's your core competancy?

You can tell a lot about a new CEO's priorities by the executive changes he makes in the first few months. Here's some of Arbitron's changes - 

Left the building:

• Owen Charlebois..President, Techonology and Research Development

• Tom O'Sullivan.."Diary Czar"-Improving Diary Service

• Bob Patchen..Chief Research Officer

• Jay Guyther..Sr. Vice President, Ratings Services

• Thom Mocarsky..Sr. Vice President of Press and Investor Relations

Now look at the recent hires- 

Entered the building:

• Alton Adams..Executive Vice President, Chief Marketing Officer

• Dr. Robert Henrick..Executive Vice President, Customer Solutions

• Taher Behbehani..Executive Vice President and Chief Strategy and Business Development

• Philip Guarascio..Non-Executive Chairman of the Board

• Didi Blackwood..Senior VP of Press and Investor Relations

• Michelle Levister..Legal

• Re-Entry-Thom Mocarsky..Vice President of Press and Investor Relations

The latest hire is Thom Mocarsky who had been with Arbitron for 26 years. 

New CEOs always bring in new people - it's how the world operates - but the question remains... Is Arbitron a ratings company or a start-up public tech company?

Been There. Done That.

Radio is still trying to figure out how to exploit social networking, which is ironic since radio essentially created it nearly forty years ago.

The latest wrinkle is Listener Driven Radio. According to the web site:

Listener Driven Radio lets listeners control your broadcast radio station. LDR engages listeners, constantly absorbing their input, votes, and comments about your station's music. This creates a community around your radio station's brand.

We suspect that few programmers remember when KFRC-FM did this in the mid 1970s. Under Dave Sholin’s direction, KFRC-AM’s little automated sister did a 24/7 count-down of the top requested songs. So the innovation of listener driven radio is thirty years old. Been there. Done that.

The technology is new. The concept is very old.

The only reason listener driven radio sounds novel is that radio has pretty much stopped paying attention to our listeners. We go through the motions, whether it might be texting or Twitter, but most stations don’t really care.

There was a time when every music station had a request line and actually answered the phone. Of course, that was when we had live jocks in the studio. There was a time when music stations called record stores and paid attention to sales.

Then we decided that with Call-Out and music testing we didn’t need to tally requests. We didn’t need to answer the phone, because we knew what songs to play.

That was a mistake. Request lines connected listeners to the station. Listeners knew that they could call the station and ask questions, make complaints, and find out what that last song was.

Evening shows on CHR stations were once very important. Often the evening jock was better known than the morning man. Shout-outs and bed-checks were part of a social network connecting the station to its listeners. But a live jock let alone a personality costs money, so now many stations are voice-tracking evenings.

We were creating social networks long before there was a fancy name for it, yet today we are playing catch-up. We’re not quite sure how to exploit Facebook, MySpace, and Twitter because as an industry we’ve forgotten how to connect with listeners.

Now there’s software that claims it can get us in touch with our listeners. Software to get us in touch with listeners is like using Viagra to save a marriage. It misses the point.

A Loss of History

PPM is a game-changer in many respects. One of the least discussed aspects of this is radio’s loss of history. We have 40 years of diary based listenership data that we are essentially throwing away in this transition.

It might seem a minor point, given the industry’s limited attention span and our tendency to look no more than a book or two back. After all, you’re no better than your last book, but the fact remains that we are losing perspective and our history.

We were reminded of this recently by a blog post that misused some recent Arbitron numbers to caution radio about a decline in cume, writing:

There is a slow but steady slippage in weekly Cume Ratings. While radio rightfully touts itself as a reach (or Cume) medium, we shouldn’t be complacent about weekly Cume Ratings levels slipping from 95.3% in Arbitron’s Fall 1998 figures to 92% in the most recent RADAR study. The younger demos are cause for particular concern.

The problem is that the blog was comparing Arbitron’s 1998 American Radio Listening Trends to the latest RADAR study. You can see the latest Arbitron report here and the RADAR press release here.

There are multiple errors committed in the analysis. The American Radio Listening Trends are based on listenership in 98 diary measured metro Arbitron markets. RADAR uses a 330,000 person DMA sub-sample of Arbitron’s diary and PPM measured markets.

The differences between the two sets of in-tabs may seem minor, but the analysis expresses concern about a 3% drop in cume over a decade. A small drop like this could easily be a result of mixing methodologies and have nothing to do with an actual decline in cume.

We know that PPM numbers differ from diary numbers. Perhaps the decline is a result of including RADAR PPM data. Perhaps the decline is a result of drawing a separate sub-sample for RADAR. Perhaps the declines are real. The bottom line is that we have no way to tell.

As more markets transition to PPM, it will become even more difficult to draw meaningful conclusions about trends in radio listenership. And it couldn’t come at a worse time.

We recently pointed out here that media usage is not a zero-sum game. People can increase their usage of new media without listening less to radio. Despite that, there is an assumption and belief in many quarters that radio is in decay. New-media pundits are absolutely convinced that people are abandoning radio in droves. “Nobody listens to radio anymore!” Even many people who work within this business believe it.

If we had consistent Arbitron data, we could refute these assertions, but we don’t. And it isn’t just PPM that is causing the problem.

Arbitron’s changes to the diary method are also causing problems. Over the past decade, Arbitron has been changing the rules. To lower costs, diaries that were once rejected are now ok. We have new editing rules that might have a minor impact for individual stations, but have significant implications in our ability to trend national numbers over time.

While Arbitron changed some rules to save money, they kept other rules to save money. In 2003, only 3% of households were cell-only households. The number has steadily grown since then, and now the estimate is something like 20%, considerably higher than that in young and Hispanic households.

This creates a problem for Arbitron and their recruitment of participants. They call households using land-line telephone lists supplied by a third-party company. That means Arbitron is systematically ignoring a growing segment of listeners.

The inability to recruit young cell-only households made Arbitron listening estimates more and more suspect as the years went on. It is quite possible that radio’s apparent declining cume and TSL is related to the failure to include cell-only households.

Nielsen’s diary test in Lexington, Kentucky suggests this might be the case. According to Nielsen:

The Lexington study found that:

• Cell-phone-only homes logged nearly 23 hours of radio listening per week compared to just over 19 hours for the total sample.
• Listen to 3.5 radio stations compared to less than 3 stations among total sample
• Has an AQH total radio rating of 17.3% versus 14.3 rating for the total sample
• Skews younger, primarily between the ages of 18 and 34.

So we have to wonder about Arbitron numbers over the past several years. What would the national listenership numbers have been had Arbitron had a representative number of cell-only households? Maybe the “loss” of younger listeners is related to the absence of cell-only households.

Arbitron wasn’t going to address the problem until Fall 2009, but pressure caused them to accelerate the process. We’ll start seeing the impact this Spring, and Arbitron has already released preliminary estimates that confirm Nielsen’s findings.

We have the transition to PPM, which distorts long term trends. We have changes in diary editing rules that distort long term trends. We have Arbitron’s unwillingness to recruit a proportionate number of cell-only households. All these things make it impossible to draw meaningful conclusions about radio listenership trends.

If you are in a PPM market, the transition is like starting over. You might as well throw those diary based books away, because all the numbers that preceded your first PPM book are meaningless.

From this day forward, when you read about “trends” in listenership, be very skeptical. We have given up our history.