Radio will get meter readings

A multimillion-dollar industry that relied on the honor system to determine its income will turn a page this week.

On Wednesday, radio stations in Los Angeles and Orange County will get their ratings for the first time from a new electronic monitoring system, replacing the decades-old method in which listeners scribbled in a diary what they’d been tuning in to.

“Sometimes what you listen to isn’t always what you recall three days later,” said Greg Strassell, senior vice president of programming for CBS Radio, which owns KROQ-FM (106.7), KCBS-FM (93.1) and five other stations in the L.A area. “Rather than guessing how listeners were listening, this is actual info we can use. This is why program directors are very excited.”

That excitement is mixed with unease, though, as stations in other markets where the methodology switch already has been made saw dramatic shifts in their rankings, and in the number of listeners they thought they had.

Replacing the diaries are new measuring devices called Portable People Meters, or PPMs, pager-sized units that survey participants wear throughout the day. They record inaudible signals that identify what radio station the person is listening to, when and for how long. Now every station he or she hears will get credit, including whatever is blaring from a neighbor’s car stereo at the stoplight or the background soundtrack at the hair salon.

“With electronic measurement, you take away the burden of someone having to remember every time they’re in contact with a radio station,” said John Snyder, vice president of Portable People Meter sales for Arbitron, the ratings service. “You definitely remember your two or three favorite stations. With PPM, you also get four, five and six.”

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The ad-dollar base

The ratings are no mere popularity contest. The stations use those audience figures to determine what to charge advertisers. And there’s no place where those calculations are more important than in the Los Angeles-Orange County market, home to the top two money-making radio stations in the country. KROQ took in $67.6 million last year, and KIIS-FM (102.7) $65.9 million, according to the trade journal Radio & Records. In fact, L.A. boasted five of the top seven, with KFI-AM (640) ranking fourth, and KCBS and KOST-FM (103.5) finishing sixth and seventh.

But for years those millions in income, based on precious tenths of ratings points, rose and fell based on the diary entries of a few thousand survey participants, relying on memory and honesty to mark what stations they listened to and when. And stations played to that, pumping money into contests or promotions, if they needed a ratings boost, to grab the attention of listeners, hoping that memory would stick come diary time.

“The old system was archaic,” said Greg Ashlock, L.A.-area president of Clear Channel Communications, the nation’s largest radio chain, which owns KIIS, KFI, KOST and five other stations in the market. Any anxiety over this new way to measure something so vital is balanced by the enthusiasm “that we know what we have is more accurate,” he said.

Snyder said one problem with the diaries is the tendency of listeners to round up. They write that they tuned in from 9 a.m. to 9:30 or 10, instead of reflecting that they actually listened to a station from 9:07 to 9:25, then switched when a commercial came on, tuned back at 9:37, but tuned out again when that song they hated started playing.

The PPM will capture all that activity. Strassell said it provides “real feedback -- minute by minute, almost -- as to what works and what doesn’t.”

Arbitron started developing the PPMs in 1992 and hopes to have them in the top 50 markets by 2010. The service is already being used in Philadelphia and Houston, and results from those cities and preliminary data from Los Angeles have given broadcasters some surprises.

According to spring 2008 ratings for Los Angeles, the last using the diary method, KIIS had a weekly audience of about 2 million. A June PPM demonstration put that figure at nearly 3.5 million. And while the diaries credited KOST and KRTH-FM (101.1) with weekly audiences of more than 1 million each, PPM showed they each had more than 2.5 million listeners.

“By and large, it’s a more accurate way of monitoring how people truly do listen to the radio,” said Bill Davis, president of Southern California Public Radio, which operates KPCC-FM (89.3). “The overall audience is actually much larger, but time spent listening is going to be less. People change the channel a lot more frequently than they did in the paper diaries.”

But not everyone is welcoming the new system or taking for granted its accuracy. In Houston, for example, the meters were particularly hard on Spanish-language stations.

KLTN-FM, a Univision-owned outlet for regional Mexican music, ranged from second to fourth place in the diary-based ratings in 2006 and 2007. In the first survey using PPMs, KLTN plunged to 13th. Other Spanish-language stations saw similar drops.

“It’s not that I didn’t expect to see those differences, but it’s way beyond that,” said Ceril Shagrin, Univision’s executive vice president for corporate research. “We continue to be very, very concerned about Arbitron’s samples and the reliability of the data.”

Univision has much at stake in Los Angeles, home of the nation’s largest pool of Latino listeners, where it owns the No. 1 and No. 3 stations in the market -- KLVE-FM (107.5) and KSCA-FM (101.9) -- according to the spring ratings.

Shagrin questioned whether Arbitron’s pool of PPM wearers is truly mirroring the demographics of the markets they’re surveying. Arbitron spokesman Thom Mocarsky said the declines merely reflect the differences between the diaries and the PPMs.

“Spanish-speaking Hispanics spend more time with radio than other groups,” he said. “And the rounding effect on the diary occurs more with people who listen more.”

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Stations react to data

Another difference between the methods is the number of people involved. On any given day during the spring survey, an average of 595 people were filling out diaries in the L.A. market. With the PPMs, Arbitron expects a daily average of about 2,750 people. At the end of each day, they plug the unit into a modem, which uploads the data to Arbitron.

Anticipating what Ashlock called “the PPM world,” Clear Channel took the initiative and changed some of its formats earlier this year. “Based on the results from Houston, there was a little bit more male listening than the diaries were giving credit for, so we decided to shift one of our stations a little more male,” he said.

So KYSR-FM (98.7) dropped its “Star” moniker, shipped female-friendly artists, such as Jewel and John Mayer, to sister station KBIG-FM (104.3) and adopted a more aggressive persona and playlist. On Wednesday, the station will find out if its male audience is actually out there.