More Meter Readings

PPM Is Radio's New Frontier

We've received a tremendous number of responses to our most recent editorial about Arbitron's PPM -- the portable, pager-like device that captures all consumer exposure to electronic media. The consumer wears or carries the PPM that, in turn, captures all listening in or out of home, throughout the day. So we thought we would extend our coverage of the PPM and include some answers to many of the questions you have raised.

As we mentioned last time, the PPM brings more granular, frequent, timelier and more stable information and data. There are longitudinal data analysis opportunities. The PPM offers multimedia, single-source data. The PPM also offers a linkage of media exposure to retail visits. It supports the industry drive for accountability and return on investment (ROI). PPM is going to be connected to radio, cable and television as well as outdoor and ultimately print. It has the ability to take the radio industry to another level. The overall objective is to help the radio industry gain the confidence it needs to transform to PPM.

Naturally, consultants, such as myself, who really understand that Arbitron and the PPM will play a critical role in this process, fully realize that all is not rosy and there are problems and questions. How will it impact revenue and business? Arbitron is going to address reporting initiatives, response rates, proportionality, bounce, the world of telecom (DNC number portability) and cell phones. They will also look at the short, medium and long-term issues around response rates. These concepts have some interrelationship. So there are a few important terms we would like to explain: response rate, consent and return.

Response rate: represents the number of persons who participate in the survey divided by the number who could have participated. The denominator is adjusted.

Consent: means someone who has given consent and agreed to participate in the survey on behalf of the household.

Return: has to do with an individual in the household who agrees to carry a meter or fill out and return a diary. Lower response rates increase the possibility of non-response bias. Do those who do not respond have similar listening habits to those who do respond? If the response is "yes," no big deal. If it is "no," there could be a bias.

Compliance: is a measure of the cooperation of respondent panelists once they have agreed to fill out a diary or carry the meter. In the case of the PPM, unless the meter registers at least eight hours of activity in a 24-hour period, the person's listening may not be counted.

How well are various demographic cells represented with respect to demos, race ethnicity and geography? Some groups are tougher to get. Arbitron over-samples when they can. Young gay males who live with others offer a particular challenge to overall better-represented demos. Under-representation is still a problem.

In-Car Trends

Are Americans spending more time in their cars? Would you say you're personally encountering more traffic than you were one year ago? As you're sure to agree, time spent in car (as driver or passenger per weekday or weekend day) has increased.

And what about daily commute patterns? The number is nearly equal to the time spent in car. For instance, on a national average, 14% of our waking life is being spent in cars. In higher traffic areas such as southern California, we know that number is going to be even higher.

Generally speaking, men spend more time in cars than women, with longer commutes than women have. The average time spent listening is just over two hours for both women and men on weekends. Almost 56% of the time they're the driver and alone. In-car listening is up while home and at-work listening has decreased.

From 2003 to the present, the year-to-date statistics from Mon-Sun 6a-12 midnight indicate in-car listening is gaining as a percent of total listening. Men are heavier in-car radio users than women. In-car listening peaks at 35-44 (Male.) In-car listening is not only a major-market concern. There is a concern about the percent of total radio listening done in car.

For the most part, whites spend more time listening in-car than do blacks and Hispanics. Why? Because they live further away from their work. In-car listening is crucial to all formats. For Urban/Urban AC stations, 30% of total listening is done in a car (often to a signal that is less than ideal).

When is drive time? As audiences move through the course of a day, we find that listening does peak in the 7-8a hour. This is nearly as high in the 4-5p hour. In-car is more than half of all listening from 5-6p. More than half of workers' drive time is over before 8:00a. The 9-5 concept is actually used by very few people. People who work outside the home have gotten to their workplace by 8a. Nearly half of workers leave work before 5p.

Radio is overwhelmingly the device most used in the car. But all is not well. Radio is less dominant in-car among 12-24 year-olds. Here's a quick look at the percentages of those spending the most time with radio in car.

12-17 year olds - 67%

18-24 year olds - 55%

Radio is the most essential in-car device for a large majority (AM/FM 69%). Radio is much less essential in-car among 6-12 year olds (which Arbitron now measures in PPM markets) and 12-24 year olds. There is a high interest in current and future radio display technologies. To be able to search for radio by format, you must search for stations offering weather information on demand. That often means searching for the strongest signal.

While satellite radio familiarity has still not yet translated into mass subscriptions, nearly one-third of the sample was not that interested in satellite radio.

Interest in satellite radio increases with pre-install option. Interest in satellite radio is highest among men and 12-24 year-olds. They are the listeners who care the most about music. There is a widely varying interest in satellite radio by format preference. Very few say they are likely to subscribe to satellite radio in the next six months.

Almost all in-car listening goes to pre-set radio stations (69%). P1 stations are overwhelmingly programmed on pre-set buttons. Pre-set buttons are programmed to far more FM stations than AM. Many don't have a single AM station pre-programmed. Most have five pre-sets. Most presets stay set.

Those in a car change stations most often. People are much more likely to change in a car than at home or at work. Short bursts of content are usually followed by short bursts of commercial stopsets. Maybe what needs to happen going forward are longer bursts of content followed by longer bursts of commercials.

Can Traffic Reports Help Build Cume Under PPM?

The answer for anyone who is commuting and in their car is "Yes." The follow-up question is when you want the latest traffic information, where do you go first? Radio. Two-thirds of the adult audience is at least somewhat interested in rush-hour traffic reports. Naturally heavy commuters are more likely to be interested in traffic reports than those with a lighter commute.

Which format's listeners care most about traffic reports? News/Talk followed by AC. Rock is fifth. Urban/Urban AC is eighth. Listeners in all formats want to know the best ways to avoid traffic problems. You might want to consider long sweeps as a high in-car listening strategy. What else can we do to get listeners to give us a pre-set? Consider creative pre-set strategies such as potential partnerships with new and used cars. People still really want to know the title and artist of a song and be able to search for a station by format. One future strategy might be to expand your appeal among 18-24 year-old males, and aggressively target this vital segment. There are some composite-hour theories and concepts that can help you there.

Now let's briefly look at in-car buying decisions that can result in sales. Recent planning starts with the idea that "when" is the critical variable rather than "how many?" In other words, advertising effects can also be affected.

For those targeting consumers close to purchase, PM drive is the most logical time. Workers make many stops on the commute home. Two out of five consumers don't make the decision to shop until the last minute. An in-car commercial can deliver immediate results for an advertiser. Who are the heavy in-car consumers? In most markets, they are in households with $100K annual income that include males 35-54. Contrary to what some believe, the older audience is not gone. They are just less satisfied.

Future Changes

Before we delve into some of the changes triggered by PPM, we want to acknowledge the fact that there have been some reoccurring complaints which involve the issues of bounce, weighting and panel fatigue. Weighting can have an exacerbating effect. The key for the diary-keepers was what respondents wrote down. Arbitron does not control what respondents write in the diary. There are edit rules when things are not clear. Is there going to be more bounce with PPM? Probably not.

The issue of PPM panel failure is a new one and is based on the fact that PPM panel participants are asked to continue for up to two years, instead of just a week with the diary methodology. During this period they have to remember to take the meter out of the charger each morning wear it for at least eight hours a day and then dock it each night. Recent studies have shown that in some markets, over time, listening declines. This is something to keep in mind if yours is, or is about to become, a PPM market.

With PPM there are going to be more competitive stations in every market. Initially there may be more stations, but smaller estimates. Smaller estimates mean that smaller changes that can cause bigger rank shifts. That could result in greater dependence on shares instead of AQH persons or ratings. The result will be the use of extrapolations and expectations of consistency across individual months.

There are differential premiums for African-Americans and Hispanics everywhere. And there have also been male 25-34 treatment changes. They now involve a second phone center and E-Consent (use of the Internet). Respondents may be asked to go online to respond electronically. There is also a new Caller ID (a message has been added to the call so you know it's Arbitron) along with an increase in household follow-up premiums.

Genesis ID Plus was first implemented in Winter 2004 along with a sample cleaning service that cleans the numbers up in advance so that the callers won't waste so much time. The best predictive dialer will not pick them up. There are some business numbers.

Arbitron has instituted new consent-promised incentives. As a result, they have seen a gain in response rates. Sometimes when the response rate is up, demo proportionality is negatively affected.

Looking ahead, new steps involve refining designs and more qualitative testing. Issues will center on audience estimates along with comparisons between the paper diary and the PPM.

A quick look at the address-based sample shows the phone frame deteriorating. Cell phone number portability and Do Not Call (DNC) have experienced changes as well. Arbitron must look at alternatives to the telephone frame. They have tested an address-based sample frame that they will mail to all households and call those that Arbitron can call. There are numerous issues with using addresses instead of phone numbers. Plus there are telephone/telecom issues.

Currently, there are over 55 million phone numbers registered with the FTC. Arbitron is exempt from the Do Not Call rules since the company is not a telemarketer. The prediction is that this may be a good thing for telephone survey research because fewer calls over time mean more participation. Currently Arbitron is including cell phones in its sample frame.

Here are two key issues. Cell phones belong to individuals while landlines are associated with households. There are provisions of the Telephone Consumer Protection Act that are affected. Response rates were not that high, but the refusal rates were very low and there were lots of voicemail and disconnected numbers. Ten percent of the respondents did not live in the three states that Arbitron called.

When we look at number portability, we find that wireless-to-wireless is not an issue. There are some questions being raised. How important is in-car listening to overall radio listening? Is radio losing ground with cars? Are satellite radio and other new devices impacting AM/FM radio? Is in-car listening only a major-market concern? How important are pre-sets? How high of a priority should traffic reports be? How valuable is the in-car listener to advertisers? How large an impact is cell phone use having on in-car listening? It's already huge and growing. And it's getting younger - meaning that more and more young listeners are becoming cell-phone only users. Are they going to be willing to carry an extra device (a PPM) just in order to be a paid participant in the PPM world? It's still a numbers game and as usual, it's also a question of answers.

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