Arbitron spells out PPM rebate plan


Here’s the deal: The target for Houston and Philadelphia will be 90% of the in-tab target for persons 6+, but start at 85% for New York and other new PPM markets, increasing one percentage point per month to 90%. The rebate will be 1% of the net license fee paid for that month for PPM ratings in the market, multiplied by the number of percentage points by which average daily in-tab falls short of the target. Arbitron’s Radio Advisory Council (RAC) had requested that the company based the guarantee on 18-34, not just 6+. Pierre Bouvard, President of Sales & Marketing, said Friday that Arbitron agrees that 18-34 is "the appropriate next step." He said the company will propose terms of an 18-34 guarantee at the RAC’s July meeting.

Presenting the latest panel performance data Friday from Houston, Philadelphia and the newest, though still "non-currency" market, New York, Arbitron’s Beth Webb, Director of PPM Research, noted proudly that the 18-24 in-tab has improved in Philadelphia, taking the 18-34 DDI (designated delivery index) number to 62% in October. And while New York is at 99% already for 6+, the 18-34 DDI there is 60%. Houston, meanwhile, is at 95%.

There has been criticism of Arbitron for using telephone-based recruitment for Philadelphia, New York and other markets going forward, rather than the address-based system used in Houston, the only market which so far has MRC accreditation. RBR asked whether Philly and New York would be closer to their 18-34 targets if the Houston system were used. "It’s hard to say. There are so many differences between the markets and between the recruitment methodologies," said Webb, noting that, among the variables, different incentives are being used in different markets. "The advantage we had in Houston was that it had been up longer than the other markets, so we had more of an opportunity to fine-tune it and to get closer to the goals," she said. Webb confirmed that Arbitron does eventually plan to switch Houston over to the same recruitment methodology now being used in all other PPM markets.

RBR/TVBR observation: Why the two recruitment methodologies? A little history. When Arbitron was putting together its Houston PPM test, which eventually became the first real world PPM market, it was coordinating with Nielsen on a potential joint venture to measure both radio and TV audiences with PPM. The address-based recruitment methodology – which even involves having real people knock on doors – was devised to be closer to what Nielsen uses for its TV measurement panels. It is, however, more expensive than telephone recruiting. Without Nielsen sharing the cost, Arbitron is out to eliminate that extra expense. Critics such as Cox Radio’s Bob Neil say that cheaper recruitment methodology is one of the reasons why Arbitron is not hitting its targets.