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Arbitron Defends PPM after NABOB Criticism

November 12 2007

Radio ratings leader Arbitron has responded to a strong attack on its PPM device and methodology by the National Association of Black Owned Broadcasters (NABOB). NABOB points to 'significant flaws' and 'tremendous fee increases'; Arbitron says the PPM is tried, tested, audited and better than diaries.

The measurement giant will not want its own 'people of color' debate similar to that navigated by Nielsen Media Research in 2004-5 (see www.mrweb.com/drno/news4309.htm and others) - the latter involved Congressional committees and bills, campaigning web sites and a good deal of language of color, but has simmered down without resort to the government regulation of ratings suggested by some of Nielsen's opponents.

The new dispute follows the release last week of preliminary PPM data for New York City stations, showing numbers for Urban and Hispanic stations significantly lower in the PPM ratings than with the diary system. NYC drop-off is 'even worse... than the Philadelphia and Houston numbers' in the words ofJim Winston, Executive Director and General Counsel of NABOB. General audience figures are down versus diary statistics, but Urban and Hispanic formatted stations fared worse than the norm.

NABOB wants Arbitron to postpone the PPM's rollout in new markets. Winston said that after years of meetings urging Arbitron to improve the technology, 'the New York results demonstrate that the limited changes that Arbitron claims to have implemented have done no good.' He added significantly: 'Given Arbitron's virtual monopoly, Arbitron is able to dictate tremendous fee increases... Therefore, Urban formatted, Hispanic formatted and minority owned stations... are forced to pay increased fees for a service they know produces results that will likely be to their financial detriment'. In conclusion, Winston said: 'it is clear, not just to our members, but to the radio industry as a whole, that this new technology is flawed.'

Arbitron's statement in reply points to the long development period of the PPM and the 'rigorous' reviews conducted by an independent auditor to establish that PPM methodology does not breach any minimum standards of performance. The statement adds: 'Eight years of market testing and review by many industry research oversight committees have established that PPM does in fact produce more valid audience estimates than the diary, and on that basis Arbitron has moved forward to commercialize.'

The statement says the diary system 'of necessity relies on memory and is susceptible to 'voting' by respondents, giving rise to strong support from both buyers and sellers of radio time for the PPM's objective of 'personal, portable and, most importantly, passive measurement' - it also points to rapid moves in this direction by 'all other forms of media' and radio's 'disadvantage' and 'increasing vulnerability' versus other media in the area of accountability.

Accreditation by The Media Rating Council in Houston, and audits conducted and scheduled in Philadelphia and New York are also adduced in support. Arbitron says that if any of the independent bodies looking at the methodology 'can empirically establish that the PPM data is not valid in research terms, or that it is less valid than the current diary', it will address the issue, but that 'if the empirical evidence does not indicate that the PPM is not valid or less valid than the diary, then Arbitron's responsibility ... mandates that the company move forward as fast as possible.'

NYC is home to Arbitron's executive offices. The company has c.2,100 employees and is online at www.arbitron.com.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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