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Arbitron Q2 Results Slide after Increased PPM Spend
Second quarter profit at media research and ratings firm Arbitron has dropped by 49%, amid increased spend on its Portable People Meter system (PPM).
The company posted profit for the quarter ending June 30 of $3.8m compared with $7.4m in the same quarter a year ago. Revenue grew 6.6% to $79m from $74.2m.
Arbitron's costs rose by more than 17% due in part to spending on the rollout of PPM across the US - the firm says the devices are more expensive to produce than the original paper diaries, but provide much more detail about radio listening habits.
Since the end of the first quarter, the company has signed long-term contracts for PPM ratings with Entravision Communications (www.mrweb.com/drno/news7033.htm ), Clear Channel (www.mrweb.com/drno/news6967.htm ) and Cox (www.mrweb.com/drno/news6833.htm ).
CEO Stephen Morris said that these deals and others already struck with a dozen major broadcasters and numerous advertising agencies allow the firm to focus its energy on executing the rollout of the PPM ratings service in the top 50 markets.
He confirmed: 'Arbitron has completed the switch in Philadelphia and Houston and is in the process of installing the service in the three largest and most complex radio markets: New York, Los Angeles and Chicago - our progress to date has been good.'
Morris added that Arbitron's Project Apollo initiative with Nielsen to develop new measures of advertising ROI is still being evaluated and the firm is committed to implementing it in the second half of the year (www.mrweb.com/drno/news6397.htm ).
Shares of Arbitron slipped 55 cents to $53.88 in Thursday morning trading, but the firm says it continues to expect that revenue will increase between 5.5% and 7.5% in 2007 compared with last year.
Arbitron is online at www.arbitron.com, while Project Apollo has its own web site at www.project-apollo.com.
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