Ratings service by April 2006 a possibility.
Pressured by Clear Channel's request for proposals for an alternative ratings system to Arbitron's current diary-based service, Arbitron said Monday it would offer a proposal next month that could commercialize a radio ratings service using the Portable People Meter by April 2006.
Believing it has a five-year head start on any potential competitor, Arbitron applauded Clear Channel for taking a leadership position. "We urge the rest of the radio industry to take up Clear Channel's sense of urgency for the adoption of electronic measurement," said Steve Morris, president and CEO of Arbitron. "We ask that radio groups and stations devote the necessary time and resources to evaluate the audience estimates from the Houston PPM market trial that we will begin delivering later this summer. And we urge the Media Ratings Council to conclude with all deliberate speed the audit of the PPM ratings system that they began last September."
Clear Channel, the largest radio group in the U.S. accounting for about 21 percent of Arbitron's annual revenue, issued its RFP on Monday characterizing Arbitron's current diary-based system as antiquated and urging the industry to move faster to embrace electronic measurement. The San Antonio-based radio group last year signed a four-year contract with Arbitron that runs through Dec. 31, 2008, amounting to about $54 million annually.
Arbitron, in cooperating with Nielsen Media Research, has been developing the PPM as a TV and radio ratings service for the past five years. Although Arbitron has made progress in the PPM's development, both Nielsen and the radio industry have asked for improvements before the PPM service could be commercialized. The radio industry formed a PPM Task Force through the Radio Advertising Bureau to study the PPM and commissioned an economic impact study by Forrester Research on the effects of a PPM service on the radio market. While most radio companies are supporting the Houston trial, two radio companies, Cox Radio and Radio One have declined to participate.
In its statement, Arbitron called for the Task Force to act promptly on the 218 questions posed to the ratings firm and called for the RAB Board to release the results of the Forrester study.
Clear Channel is asking research companies, including Arbitron, to make their proposals within three months. Potential competitors to Arbitron might include Italian-based Eurisko, among others.
But, if history is prologue, those could be ill-fated attempts. "Research budgets are so tight, I don't see how the industry could support two radio research services," said Brad Adgate, senior VP and director of research for Horizon Media. "This is likely just a salvo thrown at Arbitron. Nothing will come of it. Clear Channel is in trouble financially and a CC-supported alternative service has to be whistle clean and have the support both of other media companies and agencies and advertisers."