New Ratings System For Radio Causes Static

By SETH SUTEL The Associated Press

Published: Oct 8, 2007

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 more 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. 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 already have 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 following 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.

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, and the Internet also provides advertisers with a far more specific accounting of who's seeing which ads.

The old pencil-and-paper diary method of measuring radio audiences has been in place since the 1960s and is widely seen as outdated.

Arbitron, which also runs the diary ratings, has been working on electronic measurement since 1992. Under the new system, Arbitron enlists a panel in each city to carry around a pagerlike device called a Portable People Meter, which picks up audio codes embedded in radio broadcasts but inaudible to humans.

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 into ratings for each station.

But getting enough usable data from the sample pools has been a sticking point. For the past several months, the usable sample sizes in both Houston and Philadelphia have fallen below Arbitron's targets.

What's more, the new ratings cost about 65 percent more than the old ones.

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

Chris Caldwell, a media buyer at Houston agency Briggs & Caldwell, says the "morning drive" time slot isn't as highly rated under the electronic system, and weekend listening is much stronger than most people believed.

"Our radio budget hasn't changed, but the way we disperse that radio budget has," Caldwell said.

In early results from Philadelphia and Houston, the biggest difference is that far more people listen to the radio. The system also shows that people tend to switch channels a lot more than was known and that the time listening per person is down, resulting in lower ratings at many stations.

Most advertising is sold based on a station's ratings during a given day.

The new ratings also showed that men tend to spend more time listening to radio than women, and mainstream formats such as rock, country and soft rock fared better than they had under the diary method.