Radio is to Blame for PPM Failures

Are you incensed that PPM isn’t as accurate as Arbitron led you to believe?

Are you frustrated that you might have to shell out money for a processor to fix what Arbitron should have fixed in the first place?

You have only radio itself to blame.

Yes, Steve Morris, Pierre Bouvard, and others at Arbitron did a good job selling PPM insisting that it was more accurate, more precise, and radio’s perfect 21^st century ratings solution.

But let’s face it. Radio really really wanted PPM.

Radio wanted to believe it was more accurate. Radio wanted to believe it was more precise. Anyone who expressed doubt was dismissed as a luddite, someone opposed to progress.

Now we know that PPM is far less accurate and far less precise than Arbitron claimed.

PPM’s fails to accurately capture radio listening, and quite possibly has done more damage than good to the medium.

By underestimating listening, PPM didn’t better prepare radio for the digital world. Instead it gave aid and comfort to radio’s enemies, digital stakeholders who used lower PPM estimates to help perpetuate the false meme of radio’s imminent death.

Asymmetrical information means one side knows a lot more about something than the other. And the side that does has a tremendous advantage over the other.

Arbitron had (and Nielsen still has) a huge asymmetrical advantage over broadcasters because it has refused to provide information on critically important aspects of PPM.

Without fully understanding PPM’s technological limitations broadcasters cannot judge PPM’s accuracy or precision.

The controversy over Voltair is an opportunity to address the disadvantage that PPM information asymmetry has created for radio.

Radio’s leaders need to hold Nielsen accountable for PPM’s failure to live up to its promises, and to make sure the company acknowledges the problem and takes steps to quickly fix it.

PPM technology should finally be put through stringent testing as foreign broadcasters did. Test results should be publically released. No more secrets.

Nielsen should not be allowed to hide behind the propriety information smoke screen that Arbitron used to dodge discussions of PPM’s technological limitations. Perhaps Nielsen could begin by answering the questions we raised in 2009 here, here, here, here, and here.

A more public vetting of PPM’s technology in the early 2000s might have warned broadcasters that all was not as it seemed with PPM.

And broadcasters need to understand that increasing the number of panelists won’t increase the accuracy of PPM as long as the meters fail to properly credit stations for listening they deserve.

Remember those endless discussions of panel sizes and in-tabs?

The distraction over panel sizes is one reason radio missed the bigger problem. That’s the subject of the next Radio Insights.

Illustration: Christopher Sleboda

 

Comments

[DP]

Another great post Richard.

I just attended a lunch where Nielsen laid out the "elimination of diaries" for TV demos and the viewer averaging sequence using LPM's (PPM's) to determine demographic breakouts for markets. (various markets in similar size determining the demo breakout of your local 6pm news)

They don't talk about the limits and challenges of LPM's/PPM's...they talk about the "elimination of diaries" and "isn't that great!!!" Something to keep a close eye on as well.

I told the TV guys...."be careful what you wish for" Thanks for keeping such a bright light on this topic.