What a difference two homes make to the radio business.
Nielsen's disclosure that its Los Angeles radio ratings had been compromised prompted the company to disqualify two families from its sample audience. The unprecedented breach allowed two Spanish-language radio stations to soar in the ratings.
The surge ended with May's Nielsen rankings released Tuesday.
Univision Communications' KSCA-FM (101.9) and Radio Centro's KXOS-FM (93.9) tumbled in the ratings for the key morning-drive time period during May. KXOS' morning ratings plunged 37% compared with April's tainted data, while KSCA's fell 11%.
The big ratings swings perplexed industry leaders and analysts. The correction in audience share raised questions about how just two families in Nielsen's audience pool of 2,700 Los Angeles-area families could have such an enormous effect on the ratings.
"If, in L.A., two households can have a meaningful impact on the ratings for a market of more than 13 million people, then what does that say?" asked media consultant Mark Ramsey. "Is that fair? Is it accurate? Is it real?"
Nielsen on Tuesday declined to discuss the accuracy of its ratings.
Radio stations were eagerly anticipating the May numbers after Nielsen last week delayed the release, saying it needed time to rework the numbers after finding problems with two homes in its sample. The ratings company will release revised April results Thursday.
The ratings controversy and the volatility of the Nielsen numbers have rocked the Los Angeles radio industry. Los Angeles is the nation's largest radio market, with nearly $1 billion spent on advertising each year. Radio stations rely heavily on the ratings to set their advertising rates, and any significant drop could cost a station hundreds of thousands of dollars in potential revenue.
The problems appear to be concentrated in homes in which Spanish is the dominant language. Historically, ratings firms have struggled to recruit immigrant families to participate because those households have been wary of an organization that closely monitors their radio and TV habits. To make up for any shortfall in Spanish-speaking families, Nielsen historically has used statistical calculations to "weight" its sample.
That means there probably are fewer Spanish speakers in the sample than is representative of the population, and a few families could have a disproportionate effect on the outcome of the ratings. Nielsen declined to break out the number of Spanish-dominant homes in its sample.
"If there are systematic problems in this most important market, L.A., then you are likely to experience problems in every smaller market," Ramsey said.
Nielsen said there were two separate problems that disqualified the two homes. In one, the family was related to a senior Univision Radio executive who was fired this week.
The other family was unaffiliated with any media company or radio personality, Nielsen said this week. Instead, the family was taken out of the sample for not following Nielsen's rules for its participants, according to people familiar with the details but unauthorized to speak publicly.
Both families had been part of the Nielsen sample since at least last year. The company said it would launch "an immediate and aggressive review" of its procedures.
KXOS' morning show featuring Ricardo "El Mandril" Sanchez fell to No. 14 in May — after it had surged to the No. 4 slot during the April measurement period. KXOS' listening share fell to 2.7% last month from 4.3% in April.
"It doesn't make any sense," said Fernando Schiantarelli, who is Sanchez's manager. "It is very concerning that only one household could have such a huge impact on the ratings."
Univision station KSCA's morning show "El Bueno, La Mala y El Feo" (The Good, the Bad and the Ugly) landed in a tie for fourth place. That was a dramatic drop after KSCA's surprise No. 1 finish in the April ratings, beating out big names that included KIIS-FM (102.7) morning host Ryan Seacrest and "Kevin & Bean" on KROQ-FM (106.7).
In terms of the overall Monday through Sunday audience share, KXOS fell month to month to 24th place from 19th, but KSCA's overall share actually improved slightly.
Univision declined to comment Tuesday, and a manager at KXOS did not respond to a request for comment.
Radio stations long have been concerned with the volatility of Nielsen's numbers. Some of the more dramatic moves often come without a clear explanation.
For instance, in May, CBS' classic-hits station KRTH-FM (101.1) surged to No. 1 in the morning drive after finishing in sixth place the month before. There is nothing to suggest a connection between KRTH and the two families that were dropped from the Nielsen sample.
CBS Radio's Los Angeles market manager, Dan Kearney, said KRTH has been rising in the ratings. The audience might be responding to the station's tweaks to its music mix, he said.
Industry executives say they plan to continue to scrutinize the numbers.
Nielsen probably will add safeguards to prevent a repeat of the problems or else risk alienating clients, said Tom Taylor, a longtime journalist who writes a daily newsletter about the radio industry.
"It's Nielsen's job to rebuild confidence both in the panel and in the process of recruitment and maintenance," he said.
Further fallout from the faulty numbers depends on whether the two disqualified households represented isolated incidents — or if Nielsen uncovers more problems, he said.
One person who had been briefed on the matter said members of one of the disqualified families had visited Mexico and left their Nielsen devices, known as portable people meters, at their home in Los Angeles without properly turning them off. That made it appear as if they were still listening to the radio in L.A.
There are incentives to cheat in the radio business, Taylor and others said.
Families receive compensation from Nielsen to participate in the sample audience, and radio executive bonuses often depend on station rankings.