• by Erik Sass  @eriksass1, March 3, 2006

The price of Arbitron's stock tumbled nearly 10 percent Thursday in its first day of trading Nielsen Media Research announced it was not exercising an option to form a TV and radio ratings joint venture with Arbitron utilizing Arbitron's portable people meter technology. Arbitron's shares fell $3.73 or 9.6 percent to close the day at $35.15, near its 52-week low of $37.04. Arbitron executives spent most of the day Thursday trying to spin the development in a positive way to both the news media and shareholders, but analysts and investors remained dubious.

"I'm obviously disappointed," Arbitron CEO Steve Morris said during a conference call with reporters, but reaffirmed his commitment to the promising new audience measurement technology, and Arbitron's so-called "radio first" program. For months, Arbitron has been focusing on a radio deployment strategy as Nielsen sent mixed signals over its plans to utilize the PPM, and in recent weeks has announced commitments from major ad agencies and a few broadcasters to begin using the PPM data for radio advertising deals when Arbitron deploys it.

Arbitron executives said Nielsen's decision also frees them to explore other possibilities for the PPM, including a new TV ratings partner, or potentially Arbitron's own TV ratings service, which ironically would put it back into competition with Nielsen in that medium.

Arbitron's initial focus will be to deploy the radio service, but with a critical mass of PPMs deployed in its sample, will also have the ability to generate key insights into their TV viewing behavior, and potentially other media consumption patterns.

In fact, Nielsen parent VNU has remained committed to developing a single source measurement joint venture with Arbitron utilizing the PPM as a core component. That system, Project Apollo, would measure media exposure and product purchases from a single sample. The two companies are deploying a field test and hope the industry embraces it on a long-term basis.

Nielsen meanwhile didn't reject the PPM wholly and said it still may choose to license the technology for measuring out-of-home media exposure as part of its "portfolio" approach to measurement.