Executives at Citadel certainly used Arbitron ratings to help decide whether to changes the Peak's format from AAA to classic rock. But after a downturn in its last ratings book, when the decision was being made, the Peak spiked up in the latest one, which came out after the format change was adopted. You might wonder what was happening at the Peak to give it such wild rating swings; some, however, wonder what it is about Arbitron that creates such ups and downs.
The stature of radio stations in any market are measured by ordinary people, selected at random, who are paid $2 to keep track of what they listen to in a written diary. Trouble is, these days it has become harder and harder to get people to agree to keep a diary. This has led to a sharp decrease in Arbitron's response rate: In 1995, nearly 43 percent of those asked to keep a diary agreed; in 2002 that number had fallen to less than 35 percent.
"When response rates reach a lower level, you become concerned about how representative the sample is to the population, because you don't know the listening patterns of those people they can't reach," Charlotte Lawyer, chairwoman of the National Association of Broadcasters' Committee on Local Radio Audience Measurement told Forbes magazine in March.
Broadcasters have good reason to be hard on Arbitron -- they typically pay annual fees in the hundreds of thousands of dollars for the numbers. And people don't like to pay for bad news -- when you get a bad ratings book and it costs a lot of money, station managers can often look for someone or something to blame.
Even Clear Channel's own director of research, Len Klatt, has said Arbitron must change. "With cell phones and pagers and telemarketing and caller ID, it becomes harder and harder for Arbitron to initiate successful respondents."
While a 35 percent response rate is considered very good in research circles, Arbitron is not standing still under the pressure of its clients. Currently in the testing phase is their Portable People Meter (PPM), which would be worn for a year by individuals and would register all airwaves they come into contact with automatically.
Still, many are suspicious that this will actually solve the problems. Some are even worried that the new gadget will be too accurate. (Some critics say that Arbitron actually pumps up listenership in general, and greater accuracy could remove that boost effect.) Oh, and the broadcasters, again, will have to foot the bill by paying for the new equipment needed to implement the PPM system. In the meantime, to weed out the wild rating swings, ad buyers and station executives tend to look at four or five ratings books, rather than one.
With 30 years behind it, Arbitron appears to be here to stay, but unpredictable ratings can hurt any station's bottom line. While local ad buyers often use a mix of research and gut-level understanding of the market when they make an ad buy, national ad buyers generally just purchase time directly on Arbitron's ranking. So in the case of the Peak (which, over the past four ratings books, went from a 1.2 share, in spring 2002, to 1.2, then 0.6 and then 1.5 in the most recent book), the dip can cut off the flow of national buys.
And when decisions about formats come up, the wishes of listeners might be important. But the bottom line, largely defined by Arbitron, is still the end of the story.
Publication date: 05/15/03