Arbitron CEO Canned, PPM Shot Down In 21 Markets

Michael Skarzynski

It's been a rough week for media research firm Arbitron, which saw its still-new boss suddenly pushed out for giving "erroneous" testimony to Congress about its Portable People Meter, a passive electronic measurement device. Plus, the PPM was denied accreditation by the Media Rating Council in 21 out of 22 new markets.

CEO Michael Skarzynski abruptly agreed to resign his post Monday after an infraction which Arbitron at first only described as "unrelated to the financial performance of the company."

In a conference call Tuesday, the company revealed the precise nature of the infraction: Skarzynski gave erroneous testimony to the House Committee on Oversight and Government about the extent of his participation in Arbitron's outreach efforts to disgruntled broadcasters.

The House Committee has been hearing testimony about PPM ratings at the behest of minority broadcasters, which claim that Arbitron's PPM samples fail to fully represent their audiences, leading to large apparent drops in ratings.

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In testimony given on Dec. 2, Skarzynski claimed that he had personally accompanied Arbitron's teams of representatives, who visited broadcasters to hear grievances, explain technical aspects of PPM methodology, and ideally formulate some sort of remedy that would be satisfactory to both parties.

Regardless of the outcome of these outreach missions, Skarzynski did not participate in them as stated, according to Arbitron, leading the company's board to ask for his resignation.

There are no legal penalties, as Skarzynski was not testifying under oath. But this incident could easily create further difficulties for Arbitron as it tries to fend off regulatory oversight by the FCC -- especially if members of the House Committee feel the deception was deliberate.

Arbitron CFO Sean Creamer made a clear effort to distance the company from Skarzynski's erroneous testimony, stating: "Arbitron sincerely regrets the misstatement and has requested that the committee correct the record in connection with its official transcript of the hearing. Honesty and integrity are the cornerstones of Arbitron's values, and we take any acts inconsistent with these values very seriously. Accordingly, Michael submitted his resignation."

Skarzynski is being replaced as president and CEO by Bill Kerr, a former CEO of Meredith Corp., who was already a member of Arbitron's board.

Also this week, Arbitron revealed that the Media Rating Council had refused to grant accreditation to PPM in all but one of the 22 new (and old) markets where such ratings serve as currency for media buying. PPM received MRC accreditation in Minneapolis-St. Paul, raising the number of markets where it has been accredited to three -- including Houston and Riverside, Calif.

MRC accreditation has long been a bone of contention between Arbitron and radio broadcasters, which have cited the industry body's opinions as proof that PPM was not ready for large-scale commercialization.

However, Arbitron has proceeded with its rollout schedule, replacing paper diaries with PPM service in a number of top markets, while vowing to eventually obtain MRC accreditation in every market where PPM is used -- just not necessarily before it goes live as media currency.

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