Ratings System Change has Radio Execs in Guessing Mode

RALEIGH – Changes to the method used to collect radio ratings data are expected to significantly alter the ratings of some Triangle stations, which will influence both formats and advertising prices for years to come. “The way they’re gathering is totally different than before,” says Dick Harlow, general manager for Clear Channel Communications Inc.’s local stations. “We don’t know what to expect.”

It’s the biggest transformation in decades for the local radio business, as Columbia, Md.-based Arbitron abandons the diary method it’s used for about a half-century. Under that system, the company recruited people in the area who promised to write down what stations they listened to for a week, then send that information to Arbitron.

Arbitron is replacing that pencil-and-paper data gathering method with a electronic system called the Portable People Meter, or PPM for short. The PPM, a device about the size of a cell phone, automatically detects terrestrial radio signals that are playing within range of the person wearing the device. At the end of the day, the wearer docks the device – much like one would do with an iPod – and it transmits the data back to Arbitron.

Arbitron spokeswoman Jessica Benbow says the firm is recruiting 733 panelists for the initial data-gathering period in the Triangle – and more than 80 percent of those have already signed up. Arbitron already has rolled the technology out in more than 30 markets around the country. While the old diary method was used to develop quarterly reports, the PPM data will come out 13 times a year. That’s a report for each month and an extra one for the holiday period at the end of the year.

The Triangle has already had its last diary data reported. The PPM technology will go live later this month. There will be a test run, and then the first official PPM data, which will be for the month of September, will be released in October.

PPM is supposed to be a more accurate measure of people’s true listening habits. While the diary method kept track of the stations that a person remembered listening to, PPM will record all the stations they really hear and for what amount of time.

“People listen to more stations than they actually think they do,” says Carol Lewis, a media buyer who works at Raleigh advertising agency Articulon. Some diary participants also tend to report listening to a favorite station longer than they actually do.”

There’s no consensus of exactly how the change will impact the Triangle, as markets sometimes react differently to the switch based on their demographics. But based on data from some other markets, Phil Zachary says that stations with a passionate following – such as some talk shows, urban music-centered stations, gospel and Hispanic stations – don’t tend to do as well in PPM as when they were reported by loyal diary trackers.

Zachary, president and chief operating officer for Raleigh-based Curtis Media Group, says the price that radio groups pay for PPM will be in the high six to low seven figures range annually – about 60 percent higher than the costs for diary information.