PPM Insights

Nielsen Scraps Phones. Puts Pressure on Arbitron

MediaPost reported today that Nielson has decided to abandon telephone recruitment in favor of using an address based recruitment strategy. This is the approach Arbitron has been using in Houston for recruiting its PPM panel, but it has resisted using the same approach in other PPM markets due to higher costs.

Nielsen's decision will add fuel to the debate over PPM recruitment. Arbitron critics have cited telephone recruitment as one possible explanation for why Arbitron failed to reach many of its recruiting goals.in markets other than Houston.

Here's how MediaPost reported the news:

Dear Diary: Nielsen Scraps Phones, Shifts To Address-Based Methodology
by Joe Mandese, Thursday, Jun 19, 2008 8:31 AM ET

Nielsen Wednesday unveiled plans to transition the methods it uses to recruit its paper diary ratings samples, shifting to one that utilizes the addresses of prospective panel households beginning in November, and scrapping its old method of utilizing a "random digital dial" telephone recruiting system. "This change is based on consideration of three key factors," Nielsen said in a communiqué sent to clients:
* The rapid decline in the coverage of television homes provided by the landline telephone frame. Currently the telephone frame provides, on average, coverage of 75% of households in the diary [markets]; the address based sample frame covers approximately 98% of households.

* The increase in telephone numbers that are separated from the geographic areas in which they were sampled because of number portability, whereby households can "port" their telephone number to a cell phone or use their area code and telephone number in a different part of the country. With [address based sampling] methodology the primary sample unit-the address-is geographically fixed.

* The increase in the percentage of homes which have no landline and are therefore cell phone-only, has led to a corresponding decline in representation among some key demographic groups. This is particularly true in homes where the head of household is age 35 or younger. Federal law prohibits the use of a dialer to reach cell phones without prior permission; however, [address based sampling] provides a means of reaching these individuals, thus improving the representation of the diary sample.

 

Arbitron Plays Down Importance of Cell Phone Households

A well timed piece of research regarding cell phone use helps put some recent comments by Arbitron into perspective. First, as reported by the Center for Media Research:

According to a recent Experian study, analyzed and reported by Ellen A. Romer SVP, Strategic Planning, there are now 2.7 billion mobile phones in use. Between January 2001 and December 2010, our global society will have transformed from one where 13% carried a mobile phone, to one where 70% carry one. For comparison, she reports, there are 850 million personal computers, 1.3 billion fixed land-line phones, and 1.5 billion TV sets.

By the first quarter of 2006, notes the report, thirty countries had already exceeded 100% per capita cell phone usage. In that same year, there were about 241 million mobile phone users in the US (roughly 80% per capita mobile phone penetration). The U.S. market is not expected to top 100% per capita penetration until the year 2013.

Worldwide, there are 2.7 billion mobile phones in use compared to 1.3 billion land-line phones. In 2006, cell phone penetration in the US reached 80%, and it is expected to reach 100% in five years. I think we can safely say that cell phones have become ubiquitous.

Using cell phone imbedded technology rather than a separate pager-like device that participants have to remember to carry might seem like a no-brainer, but Arbitron CEO Steve Morris doesn’t see it that way. As quoted in Inside Radio:

Morris says several research issues are still attached to using cell phones. He says "The problem is people have very strong habits attached to what they do with cell phones. It’s much harder to coax them in terms of carrying it more than they would otherwise in order to satisfy the needs of research."

So apparently Morris believes that it is harder to convince a person to carry a cell phone that he or she probably already carries than something that looks like a pager from the 1980s and offers absolutely no immediate benefit to the user. It’s up to others within Arbitron to explain the real reason Arbitron doesn’t want to switch to a cell phone device. Money. As reported by Inside Radio:

Finding those (cell phone only) listeners can be a challenge. Arbitron SVP Jay Guyther tells Inside Radio "it’s a fairly laborious process" because federal law prohibits the use of predictive dialers, "so literally it’s somebody pushing the buttons on a phone and waiting for someone to answer."

Using live interviewers rather than a computer raises costs. We know, because Harker Research does not use predictive dialers. We’ve found that we get better quality participants when we contact prospects using a live person. So the big impediment is that it would raise Arbitron’s costs, not only in recruitment, but in other ways. Because PPM has been built entirely around land-line connected homes, Arbitron has to redesign other aspects of PPM, again raising costs.

Chief researcher Bob Patchen says "It’s also extremely costly." That’s because Arbitron needs to install landlines in those homes to transmit data back to its central computers, which adds installation and monthly phone bill costs. Patchen says Arbitron is developing a "cellular hub" it hopes will eventually be able to transmit data via a mobile phone.

In related news, Inside Radio reports that

Approximately 6% of New York’s 5,149 PPM panelists (307) are cell phone-only households. That compares to 10.5% (214 households) of Philadelphia’s 2,035 installed panelists. Those numbers are set to grow in the coming months as Arbitron raises the cap on cell phone-only households to 7.5% from a previous 5%.

Inside Radio notes that according to the US Census, 30% of 18-34% households have no land-line. Arbitron argues that adding more cell phone households won’t solve the problem recruiting 18-34 year olds, but with nearly a third of young households unreachable with Arbitron’s current methods, it has got to help.

Arbitron Delivers a Shocker: To Resume Roll-Out

To absolutely no one's surprise, Arbitron announced that the roll-out of PPM would resume. Here's how Inside Radio reported the shocker:

News Bulletin: Thursday, June 12, 2008

Arbitron to restart PPM rollout.
In a move that was not unexpected, Arbitron announces it will resume
commercialization of PPM in eight markets including Los Angeles, Chicago and
San Francisco. CEO Steve Morris says "It's time to move forward with
electronic measurement." Arbitron notes it has improved samples in four key
areas, including among the 18-34 demo. After meetings with several groups,
Morris says the "time is right" to restart.

Arbitron Teases Los Angeles Broadcasters

RBR.com reports that Arbitron held a meeting in Los Angeles yesterday to share some preliminary PPM numbers. Following the script from New York, they led with some boffo numbers showing much higher cumes with PPM. Here's how RBR reported the event:

Radio’s daily reach is more than four times larger than the combined circulations of LA’s twelve largest newspapers, according to the first data from Arbitron from its pre-launch Portable People Meter (PPM) panel is Los Angeles.

Preliminary electronic measurement results from PPM in LA reveals that more than 9.2 million people age six and older heard radio for five or more minutes during an average weekday (Monday-Friday 6am-Midnight) in April. PPM electronic measurement also reveals that twenty different radio stations in Los Angeles reach more than one million people per week compared to only six stations that exceeded this milestone in the present paper diary system.

These findings were shared by Arbitron yesterday at a meeting with its customers to introduce the new electronic measurement service in Los Angeles. The estimates are based on preliminary data from Arbitron’s new PPM panel in which is now in place in Los Angeles. Arbitron is scheduled to start its new Portable People Meter service effective with its September report. A final decision on whether to restart the PPM rollout is to come later this month.

Jerry Got it Wrong

We’re a fan of Inside Music Media by Jerry Del Colliano. He along with a few daring publications like Jim Carnegie’s RBR.com are willing to offer frank opinions about what is wrong with radio today. Unfortunately, in today’s edition, Jerry got it wrong. In The Hypocrites at Cox, Saga, and ICBC, Del Colliano writes:

The CEOs at Cox, Saga and ICBC Holdings (Inner City) climbed out of their sandboxes briefly last week to shoot rubber bands at Arbitron once again over the issue of People Meter accreditation. At least, that's what they want everyone to believe. These companies have paid for the latest in a series of what I think are childish ads aimed at their industry's only credible ratings source in the eyes of advertisers.

Like the other critics of an open PPM discussion, Del Colliano brings up a litany of complaints. The business is soft, it’s hurting the image of radio, we need electronic measurement, etc., etc. We’ve heard all these complaints many times. The problem is that there no evidence that silencing the PPM critics will solve any of these problems.

We’ve now had PPM in Philadelphia and Houston for a year. Is anyone prepared to document the additional business that PPM has brought to those two markets? Is anyone prepared to state that without PPM, business would be worse in the two markets if they were diary markets? Wouldn't Arbitron be banging a drum if PPM brought new found riches to stations in Philadelphia and Houston? Those radio stations who currently live in this new PPM based world appear rather ambivalent about the experience. New York sales didn’t exactly explode when PPM arrived.

The critics of the critics will argue that PPM driven business is being hurt by the critics. Nielsen has faced similar uprisings as they rolled out new services and somehow television networks still managed to sell using the new services. And the noisy critics got Nielsen to fix some problems.

Del Colliano takes a few additional shots that miss their marks:

On the surface these malcontents would have you think that they are not against the People Meter - just that they want accreditation first. Of course, some of these same companies employ loud mouths who swamp the trade press with anti-PPM rhetoric (in the name of research).

Apparently this is a less than veiled reference to Randy Kabrich who has blown the whistle on a number of Arbitron screw-ups. Radio should thank Randy for his efforts. Arbitron has tried and failed to discredit them, and if Del Colliano has some sort of evidence that Randy’s work is just rhetoric and not valid research, he should produce it. Otherwise it is nothing more than a cheap shot.

The critics of the critics keep claiming that there’s some ulterior motive behind the critics. What might that be? We don’t believe that anyone including the critics want to keep diaries any longer than necessary. But this argument that:

The diary system has a lot of known problems after many decades of use - some would say too many decades. And the new digital approach using the People Meter has and will have flaws now and in the future.

is a reason to move forward completely misses the point. It is exactly because the diary problems have existed for decades we should force Arbitron to fix PPM’s problems before it rolls out. Otherwise, what is Arbitron’s incentive?

Arbitron is a monopoly. It is a for-profit business with no competitors. It hasn’t fixed the diary’s problems because fixing them would cost it money. It does not want to spend that money. To fix PPM’s problems, it is going to have to spend money it does not want to spend. The only leverage radio has is to insist that Arbitron spend the money before PPM goes forward. If it doesn’t, the problems will never be fixed.

Del Colliano along with others has argued that it is hypocritical to sign up for PPM and then complain about it.

Many of them have signed long-term contracts with Arbitron for People Meter ratings. No one forced them to put their hand on the pen and sign those contracts. Their concerns are right and just if they are their legitimate concerns - after all, once the contracts were signed, they became clients. But why keep attacking the PPM that you supported with long-term contacts. The radio fat cats (as opposed to the Arbitron ones) have no credibility.

Who will Arbitron listen to more? It’s clients or those who hold out? It is Arbitron’s clients who get the attention, so again, Del Colliano has it wrong. Better to sign the contract to prove your commitment than to complain from the outside. With Jerry on a roll, he adds:

It says a lot about the forces of the radio industry who fight progress that will eventually be good for them.....Just stop demeaning radio in front of its advertisers.

So being critical of Arbitron’s rush to implement PPM is demeaning radio? Somehow the critic’s critics always play this card. When did it become demeaning to radio to be critical of Arbitron? We think it is demeaning to radio to somehow link support of radio to support of PPM. Whether the critic’s critics know it, slowing Arbitron down has helped, not hurt radio. PPM was not ready, and the delay has allowed Arbitron to patch some of the problems that the hasty roll-out produced. Many major problems continue, but the PPM critics ought to get some credit.

Poor Arbitron made $16.3 million in just the first quarter of this year on revenues of $94.1 million, an increase of 5.5 percent over revenue of $89.1 million during the first quarter of 2007. Earnings were up 8.3% in the first quarter. How much did radio revenues increase? Arbitron needs to get PPM right and until pressure is so great that Arbitron is willing to spend some of that $16.3 million to fix the problems, we should support the critics, not call them wachos and hypocrites.

Advisory Council Green-Lights PPM Roll-Out

As Reported in Inside Radio: 

Arbitron Advisory Council gives its blessing to a PPM restart. No formal vote was taken during a teleconference between Arbitron executives and the 23-member AAC, but chair Chuck DuCoty tells Inside Radio “We believe in PPM and getting it out there.” The AAC has expressed concerns with several problem areas, including sampling issues but it’s happy with progress being made. DuCoty says “The numbers are looking good and Arbitron is focusing on problems where they need to be.” He notes several issues being raised are things the industry has been dealing with for years in diary methodology. Several broadcast groups are pushing Arbitron to win Media Rating Council accreditation before deploying PPM into new markets. But DuCoty says “We don’t believe MRC accreditation is necessary as long as they are still aggressively pursuing it.” An Arbitron spokesman declined to comment. While all signs point toward restarting the rollout, Arbitron tells the AAC it will make a final decision by mid-month.

This story was reported on the same day that Arbitron put the kibosh on the idea of replacing 6-11 year old PPM carriers with carriers in demos where Arbitron is falling short. This is how Inside Radio reported the announcement:

Arbitron says jettisoning 6-11s will do little for PPM results. Roughly 10% of PPM panelists are children 6-11, but if that demo is dropped Arbitron says savings would lead to just a 2% increase in the remaining 12+ panel size. The company investigated a two-phase conversion that would have slowly replaced the 6-11 demo in existing PPM markets, while only installing 12+ panels as others come online. Arbitron says the results weren’t pretty. The average household size would drop (2.5-2.3) resulting in a panel made up of more households — with a larger number in need of young person premiums. The one upside: Arbitron estimates it would lose 2% fewer meters. Instead it’s proposing several options, including an 18-54 sample increase or adding a “supplemental” sample in hard-to- reach-targets like Men 18- 24. The downside for the ratings company is higher costs. Arbitron Advisory Council chair Chuck DuCoty calls Arbitron’s ideas “intriguing” but tells Inside Radio the AAC doesn’t think it would give enough of a boost to the 12+ sample. The Council is worried sample size will be a growing problem as PPM rolls into smaller markets, where stations could no longer run demo reports because the sample would be less than 30.

What this all means is that Arbitron essentially gets 6-11 year oldsfor free. Recruit households with married 25 to 49 year olds and many of them are going to have young children. To require Arbitron to replace the 6-11 year olds with a more useful demo like 18-34 would require that Arbitronrecruit more households--and that costs money. So Arbitron won't do it. The oddest comment is this: Instead it's (Arbitron) proposing several options, including an 18-54 sample increase or adding a "supplemental" sample in hard-to-reach targets like Men 18-24. Isn't that what radio has been asking for all along? How is this a new Arbitron proposal? And why would additional 18-24 sample be considered "supplemental?" In most markets, Arbitron is falling well short of their promised sample sizes in young demos. How can getting closer to Arbitron's own goals be considered supplementing sample?

Where Have All the Listeners Gone?

RBR.com today published a PPM analysis by Randy Kabrich contrasting Houston PPM trends to those of Philadelphia and New York. He shows that while Persons Using Radio (PUR) are relatively constant across all three markets, Houston's top stations have been fairly stable while top stations in the other markets have lost considerable cume. Read his analysis here.

Harker Research has also noted a serious erosion of station cume in Philadelphia and New York. While some of the losses can be explained by market dynamics, there are other declines that defy logic. Randy attributes the differences to differing recruitment methods. While his hypothesis is only one of several possible explanations, he's probably on to something. We see nothing to suggest that the broad station cume losses are real.

In the on-going debate over PPM, we should not forget that Arbitron has not just replaced the paper diary with the PPM. They have changed virtually every aspect of the ratings process, from the way people are recruited to the analysis software. Arbitron continues to make methodological changes that may have unintended consequences and an unpredictable impact on the ratings.

2006 Flashback: Arbitron PPM Rollout Will Be By The Book

On July 31, 2006, RBR.com reported:

Bill Kelly, VP/MM for Clear Channel Youngstown and Chairman of the Arbitron Radio Industry Advisory Council, told RBR that the Council was assured that upcoming roll-out plans for PPM in Houston and Philadelphia would go forward only with proper MRC accreditation. "They're playing it by the rules," he said. He said Arbitron assured the Council that it believed in the MRC's process. It will not just sit around waiting for MRC's blessing. In Philadelphia, it is getting things ready so the program will pop once it is cleared. That includes recruiting survey participants and providing updated encoders to Philadelphia radio stations.

This proves it is much easier to "play by the rules" when you get to make up the rules.

Station PPM Ratings and In-Tabs

Harker Research has long observed that as the number of Arbitron diaries in a cell increased, the ratings of stations targeting that cell rose. And conversely, if Arbitron fell short in a demo, some stations would suffer much greater loses than others. Now Randy Kabrich has documented a similar phenomenon with PPM.

As reported in today's RBR.com here, the ratings of both KMJQ and KBXX rose in virtual lock-step with an increase of Houston's Black in-tab. It stands to reason that as additional African-Americans are added to the panel, that stations targeting African-Americans would benefit, but according to Arbitron, this should not happen. Arbitron uses a complex weighting process that balances each day's PPM data according to age, sex, race, and county of residence so that the day's panel represents the market's characteristics. Theoretically, as more Black PPMs are added to the sample, the weight of each Black PPM goes down. As a result, there should be no relationship between station performance and panel composition. Look at Mr. Kabrich's data and you be the judge.

Philadelphia PPM In-Tabs Crater

Inside Radio reports today that the Philadelphia April PPM in-tabs reached their lowest level in eight months. The second week of April, total 6+ in-tab was 1,524. Arbitron's target is 1,530. The company has argued that declines were inevitable as they worked to increase 25-34 sample. While 25-34 has increased from 141 persons to 167, a gain of 26, total in-tab has declined 292 persons.

Despite an MRC requirement that standard error information accompany all ratings reports, Arbitron has yet to publish any data that would tell us what kind of reliability we get with these cell sizes. Given the big rating swings we've seen,  margins of error are probably pretty large.