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This is the fifth installment on Arbitron's new controversial electronic measurement, the Portable People Meter (PPM).

Broadcast Industry Concerns

In June 2008, stating they “speak for the vast majority of the industry”, six major broadcast companies, Clear Channel, Cumulus, Cox, Inner City Broadcasting, Radio One, and Saga, sent a letter to Arbitron asking for improvements, reassurances, and an action plan concerning four issues.

1. During the debut month of PPM in a market, 100% 18-54-year old age sample guarantees. If the 100% is not met, the companies wanted a financial rebate.

2. Ages 18-34, 100% sample guarantee with financial rebates if the goal is not met.

3. Abandon the measurement of ages 6-11. Existing panelists in this demographic should be phased out.

4. Do not implement Portable People Meter (PPM) in any more markets until the Media Rating Council has given accreditation. Also, at no additional cost to broadcasters, the “best practices” methodology in Houston, be applied to all PPM cities. Many feel Houston received accreditation due to the successful combination of door to door canvassing and phone solicitation.

Arbitron’s Response

The cell phone only selection process is was revamped, and beginning with spring 2009, the improvements were implemented in PPM and diary markets, 151 cities all totaled. This plan is contingent on Arbitron completing the software development.

A new study from Nielsen Mobile found that more than 20 million U.S. telephone households (17 percent) are wireless homes without landlines. The new research also suggested that one in five U.S. households could be cell phone only by the end of this year.

The Arbitron Radio Advisory Council has also guaranteed a ten-percent sample increase for ages 12+ and ages 18-54. These enhancements will be phased in until completion by the end of 2010. Theoretically, a larger sample increases the possibilities for a clearer ratings picture in a market.

Political Pressure

Last year, Senators Daniel Inouye, Hawaii, Patrick Leahy, Vermont, Dick Durbin, Illinois, and President-Elect Barack Obama sent letters to Arbitron, stating displeasure with PPM. All four wanted assurances the new system would not adversely affect any radio station.

New York City Council voted unanimously to request that the Federal Communications Commission investigate PPM and the potential effects on the diversity of radio. In addition, the PPM Coalition, consisting of the Spanish Radio Association and the National Association of Black-Owned Broadcasters, filed a complaint with the FCC. Their concerns included panel selection methodology, non Media Radio Council accreditation, media diversity issues, and possible financial effects on minority owned or operated stations.

Legal Issues

New York State Attorney General Andrew Cuomo  sued Arbitron over “alleged false advertising and deceptive business practices, implementing a Portable Meter system threatens to drive minority broadcasters out of business.” Cuomo attempted to discourage radio groups and advertisers from using the system due to flaws.

Meanwhile, New Jersey Attorney General Anne Milgram also sued Arbitron over the Portable People Meter, charging violation of state laws on consumer fraud, advertising and discrimination.

Despite political pressure, eight more markets implemented the Portable People Meter: Chicago, Los Angeles, Riverside-San Bernardino, New York City, Nassau-Suffolk, San Francisco, Middlesex-Somerset-Union, and San Jose. The  rollouts continued.

Denial and Rejection

Arbitron denied all allegations and counter sued in both cases, asking for declaratory judgment and injunctive relief. However, in the New York case, the U.S. District Court, dismissed Arbitron's counter claim.

Inside Trader Allegations

The scrutiny continued, as New York State Attorney General Cuomo  subpoenaed seven high ranking Arbitron executives to examine alleged possibilities of insider stock trading. Apparently, just prior to a Portable People Meter delay in November 2007, there was about an eight million dollar sell off of company shares from within the company.

Legal Settlements
In the first quarter of this year, Arbitron agreed to settlements with the states of New York and New Jersey. Both agreements included cash, adjustments in panelist selection recruitment, increases in cell phone only household selection, and promises of increased efforts for accurate measurement.  In regards to New York, Attorney General Cuomo reserved the right to rescind the order and reinstate the civil action, if Arbitron does not get accreditation by October 15th of this year. By July 2010, fifteen percent of New York City panels will be chosen by the same address based sample method applied in Houston. However, the in-person at home recruitment portion used in Houston will not be applied. Other assurances include increased sample targets for cell phone only households, and an increase in reaching sample targets. An interesting catch, a study will be completed by July 15th in New York City, to determine non-response measurable bias. If problems are indicated, Arbitron has obligated itself to find answers within six months. Highlights of New Jersey’s agreement included doubling the number of cell phone only households sampled and a certain percentage of panelists will be recruited using the Houston address based method. Philadelphia will also benefit from the agreement because a significant portion of their market encompasses southern New Jersey.

Definition of Addressed Based
Street addresses are selected and attempts are made to match them to numbers listed by the Phone Company or by other sources. If there is no match, mail is sent to the addresses to obtain a landline number and cell phone status. Once all the information is gathered, a cell phone only database is created and random calls are made for PPM panel recruitment.  

Addresses are sampled based on their distribution in a market. Samples are essentially at the county level. Depending on the market, there are county splits as well as high density Hispanic and Black areas, which are a collection of zip codes, based on the proportion of Hispanics/Blacks within.

The next and last installment of this series will address the possible advantages of PPM and which adjustments Arbitron might adapt, to improve ratings accuracy for advertising agencies and radio.

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