Testimony summaries from PPM hearing


Here’s a summary of what the witnesses told the House Committee on Oversight and Government Reform during the 12/2/09 hearing on Arbitron’s new PPM radio measurement system.

Panel 1

* Michael Skarzynski, Arbitron: We share the concern regarding the health of minority broadcasting, and are certain that PPM is not the cause of its problems. Urban AC format was just determined to be the top format as measured by PPM. Arbitron is supporting the radio industry’s objective to have relevant ratings info to compete with other media. PPM cannot, however, address the recession or broadcaster debt load. Arbitron is trying to accurately measure exposure to radio. Spent over $100M developing technology and it has been fully tested. It produces valid and reliable audience estimates. Arbitron has received a great deal of positive customer feedback. Arbitron has been proactive and responsive to customer concerns. Working to develop an engagement index, and attempt to measure intensity of radio listening.

* George Ivie, Media Rating Council: Congress addressed this issue 45 years ago. Need for professional review of ratings services; industry review better than congressional review; federal government retained power to deal with abuses. MRC is concerned that PPM may fail to accurately represent minority listening. Two issues: whether PPM is an improvement in terms of accuracy; and how it is being implemented. There is an industry consensus that PPM will be an improvement. MRC has ongoing concerns about implementation. Arbitron has failed to demonstrate that it gets accurate response, particularly from younger demographics. Arbitron is moving ahead despite failing to answer this question. Decline in younger demo participation from Jan. 2009 through Sep. 2009, and the problem is even higher among young African-Americans. Arbitron is hiring and instituting other improvements in an attempt to address this problem. Arbitron has been participating fully, but has been proceeding without accreditation in over 20 markets. Arbitron must continue to cooperate and improve.

* Ceril Shagrin, Univision: Concerned that the radio ratings system is facing a crisis which will damage diversity. While PPM tech may be 21st Century, the underlying principles are still stuck in the 20th Century. Produced dramatic radio ratings swings with no logical explanation other than flaws in the ratings system. MRC’s decision to withhold accreditation is not arbitrary. Arbitron recruits from the wrong sample frame – limited to households with landline telephones. Arbitron includes cell phone only households in a separate project, but undercounts. Minorities are still undercounted. Arbitron panels are too small – in Atlanta, one minority individual is assumed to represent 10K individuals. All of these issues are addressable. Arbitron proved it can do this in Houston. What’s good enough for Houston should be good enough for the rest of America. Arbitron should not move forward without MRC accreditation. Changes must be made in haste, the time for action is now.

* David Honig, Minority Media and Telecommunications Council: Member of the PPM Coalition, comprised of numerous minority broadcast company and organizations. Diversity is a core American principle, and is a basis for broadcast ownership policy, including First Amendment and Communications Act. Minority audiences have been undercounted by PPM ratings, damaging advertising sales. Arbitron is a monopoly, when it undercounts, the undercounted businesses suffer. Dedication to their audience will not sustain these stations. Arbitron must repair its broken methodology, and it should not be allowed to bind minority broadcasters to long-term contracts – allowing them to seek alternative ratings options.

Panel 2

* Charles Warfield, Inner City: First-hand experience with PPM. We’ve experienced a disproportionate loss of ratings compared to general market. 25-54, 18-34 are key demos. WBLS had steady 0.8 points in 25-54, suddenly dropped to 0.4 upon adoption of PPM. Our format didn’t change, our audience didn’t change, only Arbitron changed. Same pattern showing up for Hispanic, Urban stations in other markets. KJLH-FM in Los Angeles had big drop from #20 to #40 with essentially no ratings. We do not believe the ratings shifts are a result of technology, but rather on recruitment. Phone recruitment misses cell-phone only households, unlisted households. Attempts to add in cell households have been insufficient. Proper recruitment is expensive, more than Arbitron wants to spend. Rubbing salt in our wounds is the standard Arbitron contract. Stations must pay higher fees once the inaccurate system starts operating in our market. Arbitron is rushing PPM into markets with faulty methodology. Some can deal with PPM by shifting to vanilla formats; minority broadcasters cannot.

* Jessica Pantanini (SP), Bromley Communications: Bromley is Hispanic advertising agency. This testimony is the culmination of numerous attempts to resolve sampling disagreements with Arbitron unsuccessfully. Hopes issue can be resolved before stations are forced out of business. This is not about PPM v. diary, it’s about the methodology that fuels PPM. We depend on MRC to give us confidence in ratings. While Arbitron is making great leaps in rolling out PPM, it’s only making small improvements on sample. Ethnic stations that were once ranked at the top have suffered major losses under PPM. Wants PPM stopped until accredited. How is it possible that measurement problems persist even in minority-majority markets?

* Frank Flores, SBS: Arbitron is an unregulated monopoly, the only recognized source of radio ratings. SBS was the first group, and first minority, to sign up for PPM, and is a supporter of electronic measuring. But significant improvements must be made. PPM results have been devastating, even while the price for the ratings are 60% higher. The entire industry has been affected by the economy, the PPM has also figured greatly in our ability to properly price inventory. We’re hopeful that we can work with all parties, including Arbitron, to arrive at a solution.

* Alfred C. Liggins, Radio One: 52 stations, 16 markets. I express my confidence and support for electronic measurement of Urban radio. What PPM does is expose bad decisions made earlier during good times, including taking on excessive debt. PPM is not responsible for problems being faced by some minority operators. PPM is the new reality, and I’d rather move it forward than delay it. The problem is that PPM drives down AQH, partly because it drives up cume while diminishing TSL. We have maintained rank since PPM, even with smaller measured audiences. Smaller audiences are not due to prejudice, but because diary tends to benefit “legacy” stations. Precise PPM results allow us to respond to customer preferences rapidly. If PPM is not universally adopted, radio will lose clients to other media, wasting ability of radio to provide brand-loyal urban audiences with value to advertisers. While we acknowledge that Arbitron has not offered a perfect service, we should move ahead with it while helping Arbitron to improve it.