New radio ratings surprising

NEW YORK -- Radio advertisers who for years complained about the low-tech way of tracking listeners are getting what they asked for and more: Electronic ratings are delivering accurate counts, but are also upending basic assumptions about the industry.

Though the new technology shows more people are tuning in, it also found listening habits to be far different than expected. “Morning drive” isn’t as important as it seemed; more people are listening on weekends than previously believed. And some formats are faring better than others, contributing to several stations switching to higher-rated genres such as rock.

In Philadelphia and Houston, where Arbitron Inc.’s new audience-measurement gadgets have already replaced paper diaries, the results are causing confusion over how ads are bought and sold. Some radio companies are raising questions about the soundness of the new ratings after shortfalls in the amount of collected data.

Broadcasters, who pay for the rating service, say they want to see improvements in the sampling methods before the new system is deployed in New York later this year. It’s due to arrive in other major markets such as Los Angeles and Chicago early next year.

“We’ve got to keep Arbitron’s feet to the fire to make sure this transition is as smooth as possible,” says Dan Halyburton, market manager for three stations in New York owned by Emmis Communications Corp. Arbitron says those issues are being sorted out.

The stakes are high. Radio is a $20-billion business that depends almost entirely on advertising, and that pie isn’t growing. The radio business is being challenged by iPods, online radio and satellite radio. The Internet also provides advertisers with a far more specific accounting of who’s seeing which ads where, something advertisers value highly and want to see replicated in other media.

The old pencil-and-paper diary method of measuring radio audiences has been in place since the 1960s and is now widely seen as outdated, partly because it relies on listeners’ recollections of what they heard during a particular week rather than what they were actually exposed to.

Arbitron, which also runs the diary ratings, has been working on electronic measurement since 1992. Under the new system, Arbitron enlists a group in each city to carry around a pager-like device called a Portable People Meter that picks up audio codes embedded in radio broadcasts but can’t be heard.

At the end of the day, the listener returns the pager to a dock that recharges the battery and downloads the information, which is sent to Arbitron electronically.

Arbitron then crunches the data from the panel into ratings for each station.

But getting enough usable data from the sample pools has been a sticking point. For the last several months the usable sample sizes in Houston and Philadelphia have fallen below Arbitron’s targets, and the company is having difficulty getting young adults to comply with the requirements of wearing the pager all day.

Radio companies have butted heads with Arbitron in the past, and many don’t like that the company essentially has a monopoly on the ratings business. What’s more, the new ratings cost about 65% more than the old ones, giving broadcasters more reason to insist that the targets on the sample sizes are met.

For advertisers, the new ratings are a mixed blessing. On the one hand they’ve demanded to see more accurate audience data, but now many assumptions about radio listening are being challenged.