Interesting article about PPM controversy, HD radio, radio trends and more


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Posted by 4Me on April 22, 2009 at 11:15:01:

Don't Measure Me, Bro
Why broadcasters fear accurate audience ratings

When Los Angeles’ graying hipster population lost its finest radio station in December, an unlikely culprit was fingered. Mark Sovel, music director for Indie 103.1, an eclectic home for golden age punk and latermodel alternative music, claimed the station’s audience had been fatally undercounted by a new Arbitron audience measurement technology: the Portable People Meter.

A host of government officials—including the New York City Council; the attorneys general of New York, New Jersey, and Maryland; and several legislators, among them the erstwhile senator Barack Obama—have shared Sovel’s wrath, though their objections to the Portable People Meter (PPM) have centered on the possibility that the ratings technology undercounted black and Hispanic listeners. Indie 103.1, which has been replaced by a Spanish-language pop station, could make no such claim, but it’s revealing that the PPM, a ratings system that is manifestly more accurate than its predecessor, has drawn the wrath of such diverse players.

The Portable People Meter does away with the old user-diary system of ratings collection, in which members of a population sample write down their listening diet throughout the day and send in their diaries at the end of the week. Instead, a sampled person now carries a small, pager-like device that automatically records the inaudible identification codes of stations with which he or she comes in contact.

Diary keeping, a sacrament more demanding and less forgiving than marriage, is not the ideal way to record the activities of a large sample of any population. Metered ratings, such as the system the Nielsen Company now uses to measure television viewing, provide a much more accurate accounting of daily media consumption. “In the diary, people tend to tell us they listen to two, maybe three stations in the course of a day,” says Arbitron spokesman Thom Mocarsky. “With PPM we find it’s five or six, and that they are not listening in big, regular blocks. They listen in smaller blocks, and their listening is less habitual than the diary system indicated.” They’re also listening to less radio overall than previously believed—a repeat of Nielsen’s discovery, when it switched to electronic metering, that broadcast TV numbers had been overcounted. Some radio stations have seen their audience numbers plunge by more than 50 percent overnight.

Although most PPM opponents focus on the way samples are selected, some raise objections about the technology itself. They note, for example, that a non-English speaker typically will come into contact with many English-language stations without actually listening to any of them. The technology also runs into some refusal issues, as participants object to carrying around a gadget all day long. But these problems are easily correctable. “Whatever shortcomings there are in the sample are more than compensated by the greater accuracy of the system,” says Phil Napoli, a communications professor at Fordham University and the author of Audience Economics.

The electronic metering contretemps raises a weird but important question about communication: Is the audience’s attention the thing you want to capture, or are you really after its inattention?

The effectiveness of Web banner ads was a subject of hot debate in the late 20th century. Because online audiences at the time were vanishingly small, banners were marketed to advertisers as a uniquely powerful tool. You weren’t just providing passive exposure for your product. You were giving the buyer an easy clickthrough to the point of purchase, a billboard that raptures customers directly to your store.

For a while, advertisers paid huge premiums for the privilege. But as click-through rates remained, with few exceptions, at or below 1 percent (not terrible compared to the traditional response rate for, say, directmail campaigns, but far less revolutionary than promised), banner ads endured a nasty backlash. It didn’t matter that the banner was still delivering old-fashioned brand-building by repetition and catchphrase that was no less Fahrvergnügen than what you’d get from billboard, print, and broadcast advertising. The banner ad’s very interactivity was used as evidence against it.

Yet the dream of reaching more motivated buyers never went away. “Simple exposure to an ad is fading as something advertisers really value,” says Napoli. “If you listen to the buzzwords today, it’s all about engagement, recall, attentiveness, things like that. If that trend continues, advertisers will be willing to pay for other things besides exposure.”

In principle, more accurate ratings—which uncover audiences for a much broader range of stations—
should benefit minority and niche broadcasters. So should the trend toward smarter targeted ads. But we can’t underestimate the power of the status quo, particularly in the last heavily regulated media market.

All these struggles over scarce bandwidth are taking place while the supply of listening options continues to outgrow the audience. High-definition radio is struggling to find a market; a mere 330,000 HD units were sold nationwide in 2007, and 2008 figures are not expected to top half a million. Sirius XM, which valued radio listeners so highly it was willing to fight for them in outer space, is perilously close to extinction. Internet radio, where audience ratings are painfully clear, is growing at nearly 30 percent per year. Only in analog radio, where the spectrum is owned by the government, is supply still scarce.

Most of the thinking about communication and advertising was developed in this environment of scarcity. More than 15 years into the commercial Internet, it’s still not clear how much or how little of that thinking still applies. The marketing research firm Yankee Group projects that online advertising revenues (across all sectors, not just radio) will top $50 billion by 2011. Per the old advertising rule of thumb, half of that money will be wasted. As the Portable People Meter controversy shows, we may not really want to know which half.

(reason.com)


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