Arbitron Radio Advisory Council Minutes
December 3-5, 2007
Atlanta, GA
Jay Guyther, Arbitron Senior Vice President of Ratings Services, presented Arbitron’s revised PPM rollout schedule. Arbitron has delayed until September 2008 the commercialization of its PPM-based ratings service in nine local markets where the company had previously announced it would commercialize the PPM service over the next nine months. Arbitron continues to expect to commercialize the PPM service in those nine markets in the fourth quarter of 2008 as scheduled.
Mr. Guyther also updated the Council on various PPM panel metrics in Houston-Galveston, Philadelphia and New York. In most cases, these metrics—which include average daily In-Tab target, actual average daily In-Tab, Designated Delivery Index (DDI), and total monthly In-Tab for key demographic groups by race/ethnicity—reflect ongoing improvements.
Mr. Guyther stated that there have been DDI improvements in Philadelphia among persons aged 18–34. DDI among persons aged 18–24 has improved significantly (from a 38 in January to 72 in November). However, the data also reflect some declines in DDI among persons aged 25–34 (from 75 in January to 59 in November). Mr. Guyther stated that Arbitron expects that DDI for the 25–34 demo will improve as Arbitron improves its ability to identify persons aged 25–34 in its panel recruitment processes and incorporates steps similar to those that allowed Arbitron to improve its DDI performance among persons aged 18–24.
One Council member asked why Arbitron does not disclose the percentage of its sample by demographic among Spanish-language-dominant panelists compared with the population universe in the market. Arbitron stated that the vendor of Spanish-dominant universe estimates, Nielsen Media Research, does not permit Arbitron to provide demographic breaks within Spanish universe estimates because of the small sample sizes. Arbitron agreed to share actual In-Tab for specific age/sex cells for Spanish-language-dominant panelists.
What Arbitron is Doing to Hit PPM Sample Targets
Claire Kummer, Arbitron Executive Vice President of Operations, Integration & Manufacturing, outlined a series of immediate (being implemented now), short-term (scheduled to be implemented between two to nine months from now), and longer-term initiatives (scheduled to be implemented 12 months or longer from now) that are designed to improve various PPM measures, such as In-Tab panel size.
Examples of immediate improvements for sample performance include increasing install rates, increasing the match rate for 18–24 alternates into the PPM panels, panel relations specialization, improving panel forecasting/modeling, and increasing survey treatments (e.g., incentives). Short-term initiatives include increasing the match rate for 25–34 alternates, changing the definition of High Density Hispanic Area to 40% in a zip code (this change would also apply to the Diary service), introducing a new Web site targeted to PPM panelists, and new meter “skins.” Longer-term initiatives include a new PPM device design and restructuring the incentives program.
Owen Charlebois, Arbitron President of Technology, Research & Development, reminded the Council that PPM daily In-Tab rates are improving. In November the daily In-Tab rate was 74% in Philadelphia, 73% in the core New York Metro, and 67% in Houston-Galveston. Mr. Charlebois outlined a number of new initiatives that Arbitron intends to implement to improve further In-Tab rates and differential In-Tab rates across demographic groups. These include increased use of differential survey treatments for younger demographic and race/ethnic groups, selective/targeted use of in-person contact (refusal conversions, installation backouts, compliance coaching) and new meter skins and carry accessories. Mr. Charlebois stated that Arbitron also is considering the use of supplemental sampling (over-sampling for selected demographic categories), to improve In-Tab sample delivery for narrow demo/race/language groups. Mr. Charlebois pointed out, however, that supplemental sampling may depress average daily In-Tab rates because the procedure over-samples lower response groups.
Bob Patchen, Arbitron Senior Vice President/Chief Research Officer, briefed the Council on the company’s efforts to improve response rates as measured via the Sample Performance Indicator (SPI). Mr. Patchen stated that Arbitron’s goal is to deliver the highest practicable SPI, noting that there will likely be variations across markets and on a seasonal basis. Mr. Patchen indicated the Media Rating Council® (MRC) accredited Houston-Galveston with an SPI of approximately 20%, but due to differing recruitment methods in other markets, SPI rates are currently lower in Philadelphia and New York.
Mr. Charlebois concluded the review of the PPM improvement plan by outlining the goals of the program. He indicated that the plan is designed to enable Arbitron to deliver the following levels of performance by the end of June 2008:
Council members asked Arbitron to consider more specific measures of performance, particularly with respect to In-Tab samples for key selling demographics. Arbitron agreed to consider performance benchmarks for selling demographics and to share its plan with the Council on January 18, 2008. Arbitron noted that it was important for customers to understand that these benchmarks would represent targeted levels of performance and not bright lines separating usable and unusable data. More specifically, Arbitron emphasized that sample performance below the targeted benchmarks would still generate valid ratings estimates.
From this briefing, Council members also asked if Arbitron conducts exit interviews among non-compliant and exiting panelists. Arbitron confirmed that it does conduct such interviews and indicated that it intends to present a report in this regard at the next Council meeting.
Mr. Guyther announced that Arbitron has changed its PPM Minimum Reporting Standards so that more stations can become eligible for reporting in its services. Stations no longer need to achieve an Average Quarter-Hour (AQH) minimum as they did previously. In order to become eligible, a station needs:
As a result of this change, more stations are now reported. For example, in the November survey:
Mr. Guyther also reported that digital audio broadcasts (such as radio station Internet streams and HD subchannels) are scheduled for inclusion in Arbitron’s reporting systems beginning with the July 2008 survey.
In addition, Arbitron intends to include exposure to podcasts in station estimates, provided the podcast is a 100% simulcast created from the original on-air broadcast and such exposure occurs within seven days of the original broadcast.
Arbitron also is working on a future generation of PPM equipment, known as PPM-30. This redesign includes all pieces of the household equipment and is expected to feature a slightly smaller, more stylish PPM device.
John Snyder, Arbitron Vice President of PPM Implementation, reported that customer communication and training will continue during the PPM delay. Mr. Snyder stated that his team will continue to help clients understand the rationale for the delay, convey the company’s confidence in the Philadelphia and Houston-Galveston estimates and help all industry constituencies develop a deeper understanding of why PPM and Diary methodologies produce different results.
Bridging the Quarter Hour in PPM
Mr. Patchen provided an update on the Council’s previous inquiry relating to the quarter hour crediting rule. Today stations receive credit for listening during a given clock quarter hour provided that five or more minutes of the tuning are wholly included within the respective 15-minute period. Tuning events that bridge quarter hours are not currently credited if those events do not include five or more minutes of listening in either of the two clock quarter hours in which they span. Mr. Patchen said company research indicates that crediting the short radio exposures which span adjacent quarter hours would result in approximately a 2% to 3% increase in credited quarter hours.
The Council asked Arbitron to follow up with an impact analysis by demo and format.
Ed Cohen, Arbitron’s Vice President of Domestic Research, reported on initiatives to bring more young persons into the Diary sample. Mr. Cohen outlined a number of steps to improve participation among young persons:
Cell-Phone-Only Sampling Update
Mr. Cohen stated that the most recent cell-phone-only statistics from the government indicate that the cell-only percentage for the second half of 2006 was 11.8% overall and 25% among persons 18–24. He said that while the coverage of the landline telephone frame is deteriorating, the costs to recruit cell-only households using traditional telephone frame random-digit dialing (RDD) techniques is several orders of magnitude higher than the cost of recruiting landline households. Some reasons for the higher cost include the higher no-answer rate, lower cooperation rates and the fact that current laws and regulations prohibit the use of auto-dialers, i.e., cell-only household recruitment calls must be hand-dialed.
Arbitron is researching alternative means to bring cell-only households into the sample. The company currently is conducting a field test using an address frame to recruit households. Pending success of the tests, implementation could occur in some markets in 2009.
The Council expressed concern about Arbitron’s current practice of capping cell-phone-only households in its PPM New York service (and other radio first markets beyond Philadelphia) at 5%. Arbitron indicated that it was prepared to use the address-frame sampling method being tested in the Diary service to increase the cell-phone-only portion of the PPM sample if testing proves successful.
Jay Upton, Arbitron Vice President of Client Software, updated the Council on the company’s software applications. Mr. Upton said a major initiative is to simplify the software by reducing the number of applications that process data. A major upgrade to Tapscan™ is scheduled to occur in 2008. This is expected to be a Web-based application that will enable clients to use the software without having to download data or install the software each time a new update is made available. Part of this upgrade will be the Tapscan + Sales Management software that is intended to replace the IRSSM platform.
One Council member expressed concern over Arbitron’s housing radio station rates on the company’s servers with the Web-based application. Arbitron replied that stations will be given the ability to store their data locally in a release version scheduled for late 2008.
Mr. Upton also said that Arbitron is working on additional improvements to its PPM Analysis Tool™ software (including significant improvements in processing speed and a new scheduler) and expects to release a new version of Corporate Roll-up in the near future. He also stated that Arbitron plans new programming software packages for PPM starting with a Preference Level Trend Report in April/May 2008 and a new version of PD Advantage® for PPM in fourth quarter 2008.
Christine Mueller from SQAD made a presentation to the Council. SQAD incorporates real media costs to track and forecast Cost Per Point (CPP) for spot radio and other media. Agencies and advertisers use SQAD to build their media plans. According to SQAD, the Philadelphia market experienced 23% CPP increases over the last six months. Some Council members stated that although SQAD has indicated that the CPP in Philadelphia may have risen with the introduction of PPM, the market’s revenue has not increased.
Evolving Arbitron’s Service in Non-PPM Markets
Bill Rose, Senior Vice President of Marketing, described Arbitron’s work with clients in markets ranked 100+ to ensure that it is responsive to their needs.
One significant small-market enhancement is an update of the qualitative questions in the back of the Diary, which is targeted for Fall 2008 implementation. A subcommittee of customers selected from the Small Market Owner Operator Caucus (a group of customers from small markets convened to provide Arbitron with feedback on customer needs) has been working with Arbitron to update the questions. Changes include new questions about amount spent on the Internet, wine and liquor consumption, updated electronics usage, plans to buy real estate, political party affiliation and more.
Arbitron confirmed that it will not convert the Standard two-book markets to two-book averages as it did in Condensed markets. Arbitron said that feedback from customers and the Small Market Owner Operator Caucus indicated that many felt this change would have diluted the ability to see changes on a timely basis and that two-book averages go backwards at a time when advertisers demand more current information.
Mr. Rose also reviewed discussions that had been held with the Small Market Owner Operator Caucus, which explored changes that are more fundamental to the Small Market service. The Caucus identified the following criteria to evaluate the effectiveness of changes in measurement:
There has been discussion in the Small Market Owner Operator meetings about selling only with Cume estimates. Some clients prefer to use Cume exclusively while others prefer to keep AQH but emphasize Cume for local and direct selling. The inclusion of the primary selling demos remains important, but many small market customers prefer to limit the “slicing and dicing” of the numbers. Clients in smaller markets also prefer greater emphasis on qualitative and cross-media data.
Based on this feedback, Arbitron developed a framework for a new small market service with the underlying assumptions that pricing should not be higher than it is today and that the credibility of the service should be maintained or improved. The framework includes:
Next steps: Arbitron will review the framework with the Small Market Owner Operator Caucus to make sure it is on target based on the criteria it has established. Arbitron and Scarborough will work to design test plans. Arbitron also will consider offering variations of these approaches as a custom service in unmeasured markets.
The Council asked Arbitron to take action with respect to the following issues:
Arbitron’s Response to Council Requests
Arbitron agrees that as part of its commitment to accountability and improving the confidence in the currency, it will work with the Council and other members of the industry to implement benchmark metrics and milestones with timelines on key initiatives as appropriate.
The summary below provides Arbitron’s commitment on the Council’s key areas of concern:
Statement by the Arbitron Radio Advisory Council
At the conclusion of the meeting, the Council released the following statement:
We have just concluded three days of intense and productive meetings with Arbitron representatives.
Over the past few weeks, the industry has expressed firm support for electronic measurement and PPM for radio. The industry has made it clear that Arbitron needs to make significant improvements in the PPM sampling process and continue to improve diary measurement to ensure buyer and seller confidence in audience estimates for all stations and all audience targets in all markets.
The Advisory Council has made significant progress in the following areas:
The Advisory Council is supportive of the Philadelphia and Houston-Galveston PPM measurement currently in the market and has been assured by Arbitron that it will continue to improve those individual services as the issues above are addressed.
While we feel that a great deal of progress was made during the three days of the Atlanta meetings, the Council and Arbitron agree that much more needs to be accomplished in the next nine months and beyond. We encourage the industry to work together and engage in constructive dialogue that will bring PPM into the radio marketplace in a positive manner that will benefit the entire industry as a whole.
Finally, Arbitron said it will continue to investigate ways of allowing its reporting services to generate an estimate with fewer than 30 PPM panelists and report back to the Council in the first quarter of 2008.
The Council voted to amend its bylaws as follows: Rule 3.2b has been amended to delete the words, “who has direct oversight of the group’s multiple markets.”
Several new members have been elected to the Council for three-year terms beginning in 2008:
The Council has elected the following executives:
IRSSM, PD Advantage®, PPM™ and PPM Analysis Tool™ are marks of Arbitron Inc. Tapscan™ is a trademark of Tapscan Inc., used under license. Media Rating Council® is a registered mark of the Media Rating Council.