Arbitron’s Internet Radio Measurement Headache

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In 2003 I started a company called Net Radio Sales that was designed, in large part, to offer a sales solution to streaming broadcast radio stations. Later that year I met with an Arbitron executive to discuss their decision to shut down server based streaming measurement and shift to census based measurement through comScore. I told Arbitron that broadcasters in particular would suffer from that because their streaming audiences were small and local, and would never show up on a national panel. At the time, Arbitron told me that they had two clients  (AOL and Yahoo) who were pushing them to move to panel based measurement, and since they were the only two paying clients, the decision had been made. They shuttered Measurecast and moved to estimating streaming audiences based on comScore panel behavior. In case you don’t know the rest, a few years later they abandoned that game as well.

I’ll bet Arbitron wishes they had stayed in server based streaming measurement way back then, because what they had was a platform that measured everyone – streaming broadcast and online only stations, all together. Which brings us to the topic of the day. Now, Arbitron has a bunch of clients who want things done a certain way. Again. This time it’s their broadcast radio clients, and they want Arbitron to measure streaming broadcast stations and online only stations separately. Not just separately but differently, so that the ratings cannot be easily combined.

It’s a problem for Arbitron because their broadcast radio clients pay them a lot of money and they don’t want to alienate them. Those clients want Arbitron to measure their streams – in such a way that they can roll up their broadcast and streaming audiences into one and sell that total audience to advertisers. And they don’t want to be compared to online stations.

And then we have Pandora. Pandora has a large audience – large enough that they can now claim to have more listeners in many markets than some broadcast stations. And they are claiming that – by working with research firm Edison Research, who has helped them crunch numbers and make comparisons. Using standard calculations that are not proprietary.

Under pressure from its clients, Arbitron recently sent out a letter intended to dissuade buyers from using the data that Pandora, with the help of Edison, has been releasing, stating: “We strongly advise clients to avoid comparing self-reported audience estimates from Internet music services to Arbitron radio audience estimates…” They offer several reasons why it’s a bad idea, including claiming that there’s no way to know if anyone is really listening. Really. The most overused objection to radio, the objection that every salesperson in the world learned to overcome in Radio 101? I just really think it’s the pot calling the kettle black on that one. {Editor’s note: unfortunately, the letter has been deleted from the news site where it was posted}.

But on to the thing that really concerns me. Arbitron says comparisons between broadcast streams and online streams can’t be made because there is a vast difference between “one to one” and “one to many” streaming audiences. They’ve created an imaginary line to justify measuring the two categories separately and differently. Supposedly, because “one to many” audiences are all exposed to the message simultaneously while “one to one” listeners are exposed to the message during their unique sessions, the data is different and cannot be assimilated.

Huh?

“This is an absolutely meaningless distinction”  says Kurt Hanson, Publisher of RAIN: Radio and Internet Newsletter and Founder of AccuRadio, an online station. “Case in point: If Samuel Adams wants to deliver  one million impressions of a commercial to listeners in the 4pm hour next Friday (to use a simplified example), they can either buy (A) a couple dozen top AM/FM radio stations, in which case the WAAA listeners will hear it at 4:08pm, the WBBB listeners will hear it at 4:10pm, the WCCC listeners will hear it at 4:13pm, and so forth, or (B) they can buy their desired demographic slice of the audience of a brand like Pandora, in which case some listeners will hear it at 4:01pm, some will hear it at 4:02pm, and so forth.  In BOTH scenarios, not all of the target consumers are hearing the spot at the same exact moment!  That’s never been important to the advertiser.  Both scenarios are precisely the same, in terms if effect, for Samuel Adams.”

I asked one of the smartest agency folks I know – Natalie Swed Stone, US Director, National Radio Investment, OMD, what she thought. She pointed me to her write up for RBR, which she wrote a few weeks ago, and I highlight this quote: “The research has to follow the investment patterns. The more uniform the data, the easier it will be–but marketers and agencies will continue to buy what they want and use best available research to evaluate and estimate behavior.” In other words, research firms should offer data based on the ways that buyers want to buy. If the research does not do that, buyers will do what they have to.

Network radio has been adding up time shifted audiences(that are not hearing the message simultaneously) for decades. It’s completely acceptable to represent a network audience’s AQH as the sum of the AQH’s of audiences across the country listening to a program on hundreds of stations at different times. Arbitron’s RADAR product does this. “When we buy national schedules—they can air on different stations at different times—within the prescribed daypart…” Swed Stone told me, “in TV, the currency is currently live plus 3 days (DVR) etc  and the currency is the same –even if a person plays back the program 3 days later –it is included in the overall rating.”

To check my thinking on this topic, I spent a lot of time calling and emailing digitally savvy radio people, asking them about this issue. None of my broadcast sources would go on the record, but they uniformly told me that this is a spin game. No one thought the “one to one” and “one to many” distinction holds any water at all. “It’s not intellectually sound.” I was told.

Arbitron is caught in a tough situation. As a research firm, they’re obligated to create products that are fair and objective. But some of their clients don’t want them to do that in a uniform platform. The listening landscape is rapidly evolving into a space that includes new audio platforms. Ultimately, advertisers and listeners will decide the landscape – listeners will listen to what they want to hear and advertisers will spend to reach them.

The audio landscape has never been more diverse and interesting. Pandora, with its enormously popular platform is bringing new advertisers into the space, and this could be a big win for the industry. Grow the pie! Adapting to new dynamics would be time better spent that shoveling sand against the tide..

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One response

  1. The one to one ratio for the web may have been true in the days of dial up but those days are long past. Streaming is now as common place as analogue. Time to update for the times.
    Great article.

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