Category Archives: arbitron

Ratings 101: Pandora opens the fiction box

As advertising evolved in the 20th century, every medium created its own measurement system to try to make itself look better. Advertisers, you see, don’t buy ads, they buy audiences, and if a media channel can make its audience look bigger, it attracts more marketing money. CPM, or cost per thousand impressions, was a benchmark for years in things you read (newspapers and magazines), battled by GRPs, for Gross Rating Points in TV or radio, the percentage of people in a local market population exposed to the ad message. CPM was a count. GRP was a %. You can already see the comic magic.

When the Internet arrived in the 1990s with more hard-wired metrics such as cost per click, traditional media panicked. Never mind that “clicks” or today’s Like “engagements” would become just as devalued; every nondigital medium went into defensive mode worried that it would lose ad dollars. Out of home moved from DEC to Eyes On measurement. Newspapers went from CPM tied to circulation to a fuzzy “readership” estimate that assumed papers were read by more than one person. And in our favorite move, Arbitron, the group that measures radio ratings, rolled out Portable People Meters that picked up actual radio signals to get a more accurate read on radio ratings than previously had been recorded by diaries. PPMs found that radio listeners skipped around the dial more than previously thought, likely triggered by commercials, so Arbitron in 2007 launched a campaign to media planners claiming 70 GRPs is the new 100. (To understand that ridiculous math, which tried to explain away weaker radio ratings, imagine you give me a check for $100,000. I’ll give you $70,000 back. But don’t worry, $70k is the new $100k, so you’re cool, right?)

So it’s even more comical that Arbitron is now upset that Pandora, a popular Web- and mobile-based music streaming service, is trying to explain its audience in traditional radio terms. Pandora used to play the web CPM game, but in the past few months it has started touting radio ratings. At first blush, Pandora’s numbers look good. In the New York DMA, Pandora adults 18-34 would have a 0.9 Average Quarter Hour rating — about equal to a mid-sized NYC radio station, with nearly 1% of the entire population listening for at least 5 out of every 15 minutes — and a 19.9 cume rating, meaning that 19.9% of that population listens to Pandora each week.

If Pandora can grab almost 1% of NYC’s young adults every quarter hour and reach 1 out of 5 in a given week, it’s a good advertising choice vs. radio, right?

Well, only if you believe those numbers. Arbitron whines Pandora’s “radio ratings” are inaccurate, suggesting Pandora listeners may step away from computers while radio listeners are really there. Either way, Pandora has an advantage that radio does not — to get on the radio in NYC, you have to buy a spot that reaches all of that station’s market, because only one spot runs at a time. On Pandora, you can spend less money out of pocket since different consumers are served different spots. Smaller entry costs could appeal to smaller businesses, or those just willing to test; Pandora also offers fewer commercial interruptions per hour, meaning listeners might actually listen.

Confused? Of course. The only way to find out is to test, measure response, and calculate if your cost per lead or sale from Pandora vs. radio is better. Ratings have always been a fiction, a form of currency used to plan choices among alternative media providers. With all advertising metrics on the decline, the only way to invest is to count your return.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Image: Kayintveen

Do brand marketers have more or less options? Why, yes.

Here’s a brain-teaser: Today, is there more or less ad inventory in the world than 10 years ago?

The puzzling answer, we suggest, is yes to both. Like the Schrödinger’s cat physics thought experiment, marketers live in a paradoxical universe in which there is both more and less space to send a message to consumers.

First, why more? Because consumers now consume more media than ever before. The New York Times reported today that the typical U.S. resident watches three times as much media now as they did in 1960, taking in 12 hours of content each day including 40 web sites on average. Behind this time-use tidal wave is an ocean of material, thousands of cable channels, hundreds of thousands of apps and millions of web sites that allow consumers to find anything they want. This expanding universe of content has created an almost limitless inventory for ad placement — one reason why CPMs are falling as advertisers learn to target consumers via ad networks (online collections of thousands of web sites) or ad exchanges (online bid systems that help marketers reach specific target audiences).

But second, why less? Because consumers are paying less attention to intrusive media than in years past. You see, advertising impressions don’t really exist unless they reach a consumer’s mind. Dig into each media arena, and the data shows consumers blocking marketers everywhere.

Television: Did you know channel surfing no longer exists? The typical U.S. home receives 130 TV channels but dials in to fewer than 18 — because consumers now click on guide menus and scroll down to “tune” to the exact channels they want. Yes, according to the Nielsen / Ball State University March 2009 study of 376 participants directly observed over 48 hours with media exposure logged at 10-second increments (whoa), U.S. consumers still watch 5 hours and 9 minutes of live television a day — but concurrent media use, or watching more than one device at the same time, is the biggest media trend. When commercials air, eyeballs go to the computer or smartphone in the lap.

Radio: Arbitron’s expansion of Portable People Meters, which measure radio usage via an actual electronic signal vs. the older, less effective diary panels, has found that consumers tend to rapidly change the dial when :30 second spots come on.

Online: Consumers change viewing windows on computer screens about 37 times an hour — clicking away from any content that doesn’t immediately meet their needs. The falling click-through rates for banner advertising, once above 4% in the 1990s and now below 0.08%, are the surest indication that consumer attention to marketing messages online is fading.

Mobile: And the world of mobile apps, launched by Apple’s iPhone, allows you to tap a single button to find a sports score or weather report, ignoring the old world of advertising inventory altogether. Mobile advertising has been perhaps the most disappointing arena for marketers, with missed forecasts for each year in the past decade. Wall Street analyst Mary Meeker has noted that we’ll soon live in a world of 10 billion mobile Internet-connected devices, and most of those will not use the old browser portals that enable standard advertising inventory. As consumers migrate to content-specific applications with traffic alerts on car dashboards and weather advisories in umbrella handles, mobile advertisers will face a continued squeeze in ad inventory.

The great paradox of our age is that consumers, floating in a sea of advertising inventory, are finding ways to ignore most marketing messages by controlling what they watch, spending more time in content creation, and sharing only what they find relevant. For brand marketers this means the cost of placing ads against your specific targets is now cheaper than ever before; the question is, are those inexpensive impressions really making any impression at all?

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We’ll be discussing this issue at DigiDay Target this Wednesday in New York City with Dave Smith of Mediasmith, Tariq Muhammad Walker of AOL Black Voices, Mark Zagorski of eXelate, Jeff Hirsch of AudienceScience, and Omar Tawakol of BlueKai.

Does Portable People Meter undercount radio city?

The debate over fixing inaccurate radio ratings continues. Arbitron has been attempting to roll out a new electronic, pager-sized device called the Portable People Meter that would accurately measure which radio stations panelists listen to.

The PPM picks up an inaudible signal from the radio to record exact listener habits. This is an important move for radio, because for decades media planners have had to rely on diaries from audience samples … known to be inaccurate. In the past, a panelist might write “I listened to Country Station X all morning” … but the PPM captures the fact that user changes the dial.

Yes. Probably when a commercial comes on.

The PPM has been getting flack from major radio networks because it has found many radio stations have lower ratings than previously thought. If users skip around, they listen to more stations for less time. And few analysts are commenting, but it is obvious the trigger that drives a radio listener to change the dial is a long commercial block — meaning the “ratings” for a commercial are even lower than the official numbers.

Now, lawsuits from the attorneys general of New York and New Jersey complain the new PPM device also undercounts minority listeners, which hurts the ratings of urban stations and thus the revenue they can command from advertising. The suits claim Arbitron under-represents minorities because it only recruits research panelists from homes with regular phone land lines, and many minorities in urban markets only use cell phones.

Not sure when this dispute will end, but for now, take all radio ratings with a grain of salt. Your best bet? When you spend on radio, set up your own system to measure the results.

Photo: Thomas Hawk

Why MySpace is now slathered in lipstick

MySpace hints at desperation with a new design in which more than 50% of its home page is taken over by one giant ad. We don’t mean an interstitial, one of those full-page web ads that temporarily interrupt you on a site before you click through to the real site’s content. We mean, most of the page is now a screaming billboard.

The redesign suggests MySpace is having a tough time making its ad inventory work. Don’t trust us; Bloomberg reported in April that MySpace’s abysmal financial performance had turned Rupert Murdoch’s News Corp. into a toxic stock. Valleywag noted recently that MySpace click-through rates are a little better than Facebook’s, but at 0.10% click-throughs, still aren’t anything to write home about.

But listen, MySpace, we’re trying to help. Look where your media peers have gone before. The $6 billion radio conglomerate Clear Channel once ran more than 12 minutes of radio spots per hour. Audiences began bailing, Clear Channel was forced to launch a “Less is More” campaign and reduce ad time per hour by 23% to 9 minutes and 20 seconds, and now the new Arbitron systems show that the radio audience may have slipped for good, with ratings down 30% or more in many markets.

Which brings us back to MySpace. McDonald’s and other advertisers are probably delighted they can now take over the MySpace home page. But as Ian Schafer, founder of the internet strategy firm Deep Focus, just noted on his blog, social media sites and related widget applications are going to have to show they can be a viable advertising model. The root problem for social media is that users have a different modality, and while in heavy socializing mode they are less receptive to advertising messages.

All of which explains why MySpace has put on more ad makeup.

When web ad measurement fails, build a ruler

We’ve been critical about broadcast, outdoor and print media measurement systems lately … but at least there is one ruling body in each of those media that tries to establish standards. A new report says the lack of consistency in online measurement may be scaring some advertisers away from internet advertising, especially as web media continues to evolve into video, widgets, and social media apps. This is ironic, because the web is awash in data … but often not all of the numbers add up.

For example, one standard of web audience is “unique visitors.” But if a user deletes the cookies on his computer, he comes back as a new unique visitor each time … so John Doe, battling viruses on his Windows PC, may get counted over and over again inflating a web site’s traffic report. “Uniques” also do not account for the same viewer logging in from different computers.

This is more than a nit: unique visitors are the baseline of a web site’s audience, the equivalent of reach in traditional media planning. If reach is off, what else could be?

Randall Rothenberg, CEO of the Interactive Advertising Bureau, put it: “Marketers want to know, If I take $10 out of TV and put it into online, am I getting $10-plus back?”

The cold hard truth is the advertising industry has been riddled with inflated metrics for years, and as the data systems get better (driven by the attempt to keep up with the flow of data from the web), a lot of old-school Emperors are going to realize they are wearing no clothes. Media can work, but only if you base your media plans on reality. If the reality is teenagers are leaving radio to listen to MP3s, let’s count it, and deal with it, not hide facts. If the reality is newspaper circulations are down, let’s not make up bogus “readership” claims based on passalongs, because that does an advertiser little good.

The only real solution we see is for marketers to bypass the competing claims by setting up measurement of inbound responses. If a marketer spends $10,000 on one outlet, and can track with accuracy that 200 responses came in, she will know the cost per response was $50 in that particular media. If another media option drives a response at $25, then that’s a better deal. As media options continue to proliferate, each channel will inflate and defend its own metrics, and silly claims will continue to rise. If you want the truth about advertising, measure it yourself.

Radio networks protest, so we still can’t hear the truth

Today’s youth are consumed with MP3 players, mobile phones, video games, Facebook and YouTube. So if you asked a parent if she thinks today’s youth spend less time with radio, the answer would be … duh. Yes.

Unfortunately, a new system that accurately tracks radio ratings remains under fire from the Clear Channel networks of the world, and Arbitron continues to delay its rollout in major U.S. markets. Mediaweek reports this week that the delay in the new radio measurement system — the Portable People Meter or PPM — is causing many marketers to question whether PPM is effective.

All of this is really, really sad. We’ve noted before that PPM is a brilliant device. It replaces diaries to record radio ratings by tracking a signal broadcast from each radio station, and can tell if a listener switches channels. For about four decades, radio ratings were based on a survey participant filling out a journal — now, we finally get the real deal.

The PPM ratings are active in Houston and Philly, and the early results have shaken the radio industry by finding — gasp! — ratings are falling for some segments of the youth set. So, predictably, Clear Channel and other radio nets protested that sample sizes were off, blah blah blah, and Arbitron, who runs PPM, went back to the drawing board.

As Mediaweek notes, no matter how Arbitron rethinks the sample sizes, some radio stations are going to get whammed with lower ratings. And the overall trend cannot be masked. Marketers should push Arbitron to get PPM to market. Radio remains a viable medium, but without accurate data and ratings, the radio industry as a whole will disappoint its clients who are measuring real results.

Arbitron delays rollout of accurate radio ratings

The Portable People Meter is an interesting device — it’s a little cell-phone sized gadget that allows the ratings group for radio to accurately record the exact station a consumer is tuned into. This meter picks up a signal from the radio station, and replaces diaries as an exact way to track radio ratings.

And guess what — as the new PPM system is unrolled in markets, radio ratings are tanking. It seems consumers skip around the dial more than previously thought, and while journals didn’t always capture the truth (say, someone might write in they listen to Howard Stern for 2 hours in the morning), the PPM device doesn’t lie (the consumer may actually change the dial during commercial breaks). Ratings in many markets are down by as much as 30%. Ratings were so startling low, in fact, that Arbitron launched a PR campaign trying to convince media planners that 70 of the new PPM GRPs were as good as 100 of the old ones.

Now, Arbitron is delaying the rollout of the PPM due to controversy over the new ratings results. A lot of networks don’t seem to like the truth. Clear Channel, Radio One, Cumulus, and Cox Radio have protested — because younger demographic groups, in particular minorities, have lower ratings with the new accurate PPM systems. Young audiences are a particularly sweet target for advertisers, and if their ratings fall, ad revenue will dry up.

There are only two ways this can break. Either the truth is young people don’t listen to radio as much as they used to, and instead use MP3s and cell phones to communicate (duh), or the electronic monitoring system has flaws in technology or sample sizes (uh-huh). We don’t know the truth, but we do predict when it arrives, the truth will set radio ratings free.

Arbitron reports the new PPM should be in eight of the nine delayed markets, including New York, Chicago and Los Angeles, by September 2008. For now, PPM is only active in Houston and Philadelphia.

The horror. Now, radio will die, too.

Cheerful news for the National Association of Broadcasters Radio Show in Charlotte, N.C. last week. Michael Harrison, publisher of talk-radio mag Talkers, told an audience of radio execs that terrestrial radio will be killed off within 20 years, replaced by cell phones, satellite, MP3s, the Internet, Wi-Fi, and high school marching bands. Radio execs are simply in denial, Harrison said, and “it’s amazing how little our industry is doing to slow the deterioriation.”

Arbitron execs reportedly charged the stage and said, don’t worry. Because 70 GRPs are the new 100.

Radio ratings tank, so Arbitron spins the truth

Arbitron insults your intelligence with a new spin campaign about GRPs. It’s pure baloney. Marketers and media planners should cry foul.

A new electronic measurement system for radio ratings has exposed the fact that GRPs aren’t what we thought they were — real ratings are actually off 30% or more in the first two markets, Philly and Houston, where the Portable People Meter was used. This PPM device replaces diaries to monitor how people really listen to radio, and it found people skip around the dial a lot more than previously thought — in general, hurting ratings of any single station. The PPM system goes to NYC next, and by end of ’08 will be in the top 10 U.S. markets.

This means your radio buys have been weaker than you thought. Marketers who thought they were buying 100 GRPs were really only getting 70 GRPs for their money. If they want to get to 100 gross rating points, they’ll now need to spend more. Arbitron is trying to mask the bad news with full-page ads in MediaWeek telling buyers that the new GRPs are more powerful. In actuality, 30% of the old GRPs have vaporized.

There is some good news as radio ratings tank — the more accurate data will allow media buyers to build more sophisticated plans, buying deeper into lower-ranked stations to get exactly the reach and frequency clients want. With a real read on the audience, we can now place ads more likely to hit the real listening target, which in turn should boost responses and customer action.

But come on, Arbitron. Launching a PR campaign saying 70 PPM GRPs is the new 100 is a bit silly. Here’s what we suggest. Send us a check for $100,000. We’ll put it in a bank for you. And we’ll call you tomorrow saying, whoops, you only have $70,000 in your account. But don’t worry — 70 is the new 100.

(For a detailed look at how far 100 GRPs have fallen in radio, here’s a table showing TRP details for Philly. If you thought you had 100 TRPs for teens A12-17 Mon-Fri 3P-7P, you really only had 54.)

People Meter killed the radio star

Don’t touch that dial. Arbitron is shaking up radio advertisers with its new Portable People Meter, a little device that actually measures what people really listen to vs. what they record in diaries. In test markets of Philly and Houston, the results were no surprise — people skip around the dial more than previously recorded in journals, meaning many stations have bigger audiences who listen for briefer periods of time.

Toss that in your reach and frequency, and rankings change. Rock is up, urban down, men loom larger, women tune out, and overall GRPs are falling. Arbitron has responded with an ad campaign to media buyers saying 70 GRPs is the new 100.

We think the cold, hard truth is that consumers are switching stations more often than advertisers would like, and yes, during the commercial break. Radio is still huge, and the average U.S. consumer still listens to 3 hours a day. But to reach them, you need to plan smart — drill in to the demo, pick the right formats and dayparts, and get creative with the mix, pulsing, and duration to grab the audience while they are listening. The People Meter will be in all Top 10 markets by end of 2008. Time to get a good GRP.