2-28-2012
Arbitron has certainly had its share of challenges and criticisms over the years. However it still stands as the main service most advertising agencies rely on to place their buys. A point here or a share there could cost a station big money when that young buyer one one city faxes the order to a city she's probably never set foot in. Outside a local direct sales call, the reliability of the Arbitron numbers, whether they are from a diary or a PPM is vital. It's what has either gotten radio to 7% of the advertising pie, or, has kept us stuck there for so many years.
Arbitron has filed its annual report with the SEC. The document reveals many things, including how criticism can affect their business model. It also says several companies are developing a competing technology, it's becoming more difficult to recruit panelists and Clear Channel is to the ratings service what automotive is to radio...a very big egg in the basket.
Here are some of the details from the 133 page document that may interest you. Arbitron stated that it is aware of at least four companies developing technology that could become competitors. "They are: Civolution, GfK AG, Ipsos SA, and Nielsen, which are developing technologies that could compete with our PPM ratings service. Additionally, we are aware of several companies, including Anite plc, Ascom, CarrierIQ, Inc., comScore, Inc., Experian Simmons, Lumi Mobile, M:Metrics, Inc,, M?diam?trie, Nokia Siemens Networks, Nurago GmbH (GfK AG is the majority owner), Spirent Communications, and Telephia (a subsidiary of Nielsen) that compete with Arbitron Mobile's mobile audience services." The company also stated that Eastlan competed with them in 2011.
Arbitron also says Clear Channel Makes Up 1/5 of its revenue. "We depend on a limited number of key customers for our ratings services and related software. For example, in 2011, Clear Channel represented approximately 19 percent of our total revenue. Additionally, although the amount of contract term revenue associated with customer contracts expiring in 2012 is lower, as compared to historical standards, if one or more key customers do not renew all or part of their contracts as they expire, we could experience a significant decrease in our operating results."
Arbitron also stated that gathering participants for the PPM panels and dairies is growing more difficult. "It is increasingly difficult and costly to obtain consent from persons to participate in our research. In addition, it is increasingly difficult and costly to ensure the selected probability sample of persons mirrors the behaviors and characteristics of the entire population and covers all of the demographic segments requested by our clients. Additionally, as consumers adopt modes of communication other than traditional telephone service, such as mobile, cable and Internet calling, it may become more difficult for our services to reach and recruit participants for our audience measurement services. If we are unsuccessful in our efforts to recruit appropriate participants and maintain adequate participation levels, our clients may lose confidence in our ratings services and we could lose the support of the relevant industry groups. If this were to happen, our audience measurement services may be materially and adversely affected."
So, in order for radio to grow past 7%, do you think Arbitron needs Compeition?
Is it not a factor at your station?
Are you happy with the service you receive now?
Stations can read the entire Annual Report HERE
(2/28/2012 7:10:10 AM)
The radio industry is fortunate to have the numbers Arbitron publishes. The radio listening Arbitron reports is inflated and is no where near what the real listening is with Pandora, IPods/Phones, Satellite and the like. Arbitron can't take all that money from CC and others and tell the truth about radio listening or they'd be out of business. They must produce numbers that work for the industry or they're out of business.
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