CUMULUS WILL ANNOUNCE THEY ARE NOT RENEWING ARBITRON IN MARKETS SMALLER THAN 100
New Radio Star has learned that Cumulus Media, one of the giants of the radio
companies (344 stations in 67 plus markets) is expected to announce today
they are not going to renew current Arbitron contracts for markets 100 or
smaller upon expiration of those contracts by the end of they year. They will
maintain contracts for a handful of stations in major markets. The reason for
the move is belied to be Cumulus' lack of confidence in the diary keeping
methodology employed by Arbitron. The announcment is expected to come from
Cumulus headquarters in Atlanta.
Late tonight Cumulus issued a press release announcing an invitation for "qualified
vendors to submit proposals" for a new service to measure its stations. Here is
that press release in its entirety..
ATLANTA--(BUSINESS WIRE)--April 14, 2008--Cumulus Media Inc. (NASDAQ: CMLS),
John Dickey, Chief Operating Officer of Cumulus, announced today the
invitation for qualified vendors to submit proposals to Cumulus for a new
service designed to measure both quantitative and qualitative audience
characteristics for its stations in markets 100+. As of January 1, 2009,
Cumulus will no longer subscribe to the Arbitron Radio Market Reports
currently published in 50 of these markets.
"We have reached the point where Cumulus recognizes that there is only one
way to close the growing gap between needs of its stations/advertisers in
these markets and the state of audience measurement- and that is to initiate
a fundamentally new approach. As the underwriter of this effort, we will take
the leadership role in solution design and vendor selection.
Among other things, we will require this to be a stand-alone, turn-key
service. Cumulus will be its first customer, but the service must function as
an independent, objective entity that is accountable to and can provide
on-going support for the larger broadcast and advertising communities. Our
plan is to work closely with leading researchers, other broadcast
organizations, and advertisers to design a system that is credible, accurate,
and comprehensive - both today and in the future.
We've been studying the issue for some time now and our conversations with
other major stakeholders have been very encouraging - we agree on most, if
not all, of the major issues."
Cumulus has posted the RFP on its website at http://ratingsrfp.cumulus.com/.
Among the requirements listed for the solution, which will have both data and
software components, are:
-- Vendors must have proven credentials in both qualitative and
quantitative media research;
-- Vendors must possess the human and technical infrastructure to
execute, process, and deliver, and support a high volume of
concurrent research today and significantly larger volumes in
-- The vendor must design and execute the research in accordance
with Media Ratings Council ("MRC") standards for
accreditation. Though MRC accreditation will not be required
at the outset, the vendor must pledge its intent to secure
accreditation in a reasonable time frame and maintain it for
the life of the service.
"The most important requirement is that the solution credibly provide the
broadcast and advertising industries with a demonstrably stronger audience
measurement system than we have in markets today," Dickey added. "This
includes greater accuracy and stability, data types that help both Agency and
Direct customers make sound decisions, and metrics that help advertisers make
more direct comparisons of radio to other local media. Ultimately, we want to
help advertisers more accurately understand both the size and quality of our
brands' user communities so they can value them accordingly."
As for its status as a customer of Arbitron in other markets, Dickey notes:
"We are a strong supporter of Arbitron's efforts to develop and implement the
new PPM technology in our larger markets. In all likelihood, PPM will not be
available to these smaller markets, so we need a credible alternative
solution. We have told Arbitron that we welcome their participation in this
RFP process and look forward to any proposal that they might offer."
The deadline for RFP submissions is scheduled for May 14, 2008. Instructions
for vendors, including question submission and direct communication with
Cumulus and its employees are outlined in the RFP.