Blinded by PPM Numbers
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Last week I had the good fortune to attend a Cleveland session on Arbitron's PPM. It was a relatively large crowd of radio industry and agency types who were eager to be shown radio's future in audience measurement. In describing the atmosphere, the term "enthusiastically oblivious" comes to mind. This clearly wasn't a room in which you'd want to bring up a line like "...this minute-by-minute accounting is being done online everyday, with hard numbers."
PPM is a contentious way of improving radio accountability. Radio industry CEOs can't agree on its general effectiveness or fairness to minority groups. The concept revolves around encoding a radio station's audio signal. People are tracked through each of the broadcasts they traverse each day.
What's lacking is a way to confirm that statistical extrapolations of numbers awarded each station are accurate. It's the reason the following is shown in bold print on PPM literature: PPM ratings are based on audience estimates and are the opinion of Arbitron and should not be relied on for precise accuracy or precise representativeness of a demographic or radio market.
PPM is going to drain far more from the radio industry than it puts in. The energy and money spent introducing it, and getting PPM to mainstream acceptance, are going to make the amounts wasted on HD Radio seem paltry.
As I sat in that Arbitron session, listening to its panel explain how PPM allowed an hourly breakout of listening levels, the following thought kept recurring: "There's nothing here that isn't offered to an online radio advertiser." The radio industry needs to do a better job of defining its audience and how the audience responds to an advertiser's message.
PPM may be the new "currency" of ratings, but it is far behind the accountability offered by the internet. Until radio industry leaders invest in understanding how they can use their sticks to push a radio audience online, then document the effectiveness of that "push," radio revenues will continue flat or in the negatives.
The price of an impression has fallen to where a business model that only offers an audiences' ears as the product can't be sustained. With PPM, all that radio gets is an hourly breakout of numbers that cannot "be relied on for precise accuracy or precise representativeness of a demographic or radio market."
As the economy begins its slow crawl out of the depths, how many advertisers are going to want a piece of this action?
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