• by Joe Mandese  @mp_joemandese, December 9, 2004

Despite receiving no support from its erstwhile partner Nielsen Media Research, Arbitron Wednesday reported successful initial results from its Houston market trial of its portable people meter (PPM) TV and radio audience measurement system. Based on the results, Arbitron said it is on track to have 2,100 meters installed in the marketplace by the end of April. In its announcement, Arbitron made a point of noting that it is achieving a strong initial sample response based on its own efforts and "using Arbitron-only branded materials," a tacit acknowledgement to Nielsen's failure to back the Houston trial at a critical juncture in the development of the promising new measurement system, something that has infuriated some executives on Madison Avenue who see it as another attempt by Nielsen to stall the process.

Despite the fact that a top VNU executive on Tuesday disclosed that the company has invested $20 million to date supporting the development of the PPM system, Nielsen's support of the Houston market trial has been tepid at best. VNU and executives of its Nielsen unit have not publicly disclosed the reasons for dragging their feet, but insiders say it has more to do with Nielsen's own plans for the market - Houston - than with the validity of the PPM. Nielsen has its own plans to convert the Houston marketplace, which currently gets its TV ratings via a set-meter and diary sample, to one of Nielsen's local people meter systems next year, but Arbitron executives have indicated plans to keep the Houston PPM system up and running in the market if the market trial proves successful, putting the two potential joint venture partners at loggerheads.

Asked what VNU's plans for Houston were during his presentation at the UBS Warburg Media Week conference in New York on Tuesday, VNU Media Measurement Group Chairman-CEO Michael Connors declined to comment, saying only that VNU has "very good relations with Arbitron." He did, however, note that VNU is continuing to test "several other" alternative technologies to the PPM.

That lukewarm endorsement is a startling mixed signal, consider that VNU has a simultaneous ambitious plan to joint venture with Arbitron on the development of a 70,000 household national marketing panel that would combine Arbitron's PPMs with ACNielsen's Homescan technology to provide a single-source measurement system. But Connors implied that the national marketing panel and the TV and radio audience measurement systems were distinct and separate business models.

Outside observers think the issue has more to do with intense negotiations between Arbitron and Nielsen over control of the PPM technology, and potentially over a merger deal. On Tuesday, Connors reiterated to Wall Street analysts that VNU has more than $1 billion-plus in cash to make new acquisitions and that it plans to dominate all the markets it operates in.

Meanwhile, Arbitron said that the initial sample cooperation rates have exceeded what Arbitron generated - with support from Nielsen - in their earlier Philadelphia market trial, and that based on continued results, would begin collecting and evaluating data in January, and reporting results in July.

Arbitron will start collecting and evaluating the viewing and listening data at the total persons level, based on the first two waves of recruitment. In July, after the panel is fully recruited, Arbitron will begin delivering station level ratings results for the outlets that will be encoding for the trial.