• by Joe Mandese  @mp_joemandese, February 20, 2007

Radio ratings giant Arbitron is poised to deploy its portable people meters as the official ratings currency for radio advertising buys in Houston, but it's already thinking past the little, beeper-like monitoring devices that have taken nearly a decade to gain industry acceptance and accreditation in at least one radio market.

"It's clearly only version one, and versions two, three, four and five will come forward," President-CEO Stephen Morris said late last week during a call with analysts to review Arbitron's fourth quarter earnings results.

"I think cell phones will be part of that future, but I don't think they will be a dominant part of that future," Morris added, indicating that Arbitron is exploring a host of new monitoring methods that would replace the current version of the PPM, a beeper-like device that panelists wear each day and dock into a data-gathering system overnight.

Morris' allusion to cell phones is striking, because rival research firm The Media Audit has been claiming industry backing to test a new radio audience measurement system utilizing a proprietary "smart phone" technology.

Morris addressed that test during the conference call, indicating that he did not see it as an imminent threat to Arbitron's radio ratings, and said it might also give Arbitron some ammunition in a patent infringement suit it has filed against The Media Audit. Nielsen Media Research, which is partnered with Arbitron in a market trial of single-source media and product purchase measurement system Project Apollo, has said it also is exploring the development of software meters utilizing various hand-held devices, including cell phones.

Morris said the deployment of next generation portable, personal audience monitoring devices has been held up due to the need to validate Arbitron's original PPM technology, but indicated that once that is deployed the company would begin to innovate beyond that.

"We've sort of been frozen in time, because with MRC accreditation," he noted, referring to the Media Rating Council, the audience ratings industry's watchdog, which audits and accredits commercialized services. "You put a device in the market, that's what's there."

"We've come a long way, but we're still facing that moment of truth," Morris added, referring to the impact the switch to electronic measurement of radio audience will have on the radio advertising marketplace. Arbitron will deploy the PPM in Houston in several weeks, and is in the final stages of an MRC audit to gain accreditation for Philadelphia. Arbitron also plans to deploy the PPM system in major markets in 2008, including New York and Los Angeles.

Separately, Morris described Arbitron's relationship with Nielsen as "good" and that Nielsen was expected to tout the viability of the PPM as an audience measurement component of Project Apollo during Nielsen's national client meeting in Orlando last week.

Morris said Apollo had also achieved a major encoding breakthrough that will allow it to accurately monitor programming of the major TV networks, but he indicated the service still had a way to go to prove itself to national marketers before a decision is made on whether to expand it beyond a limited market trial later this year, and to actually deploy it as an ongoing syndicated research service.

"Project Apollo remains a wild card," Morris said, adding that a decision on a large-scale commercial expansion of the services would not be made until the second half of 2007,

"A decision to commercialize will require additional investments to increase the panel size, but that decision will not be made unless we have commitments from clients," he acknowledged, adding that Arbitron may already be thinking beyond the current structure of its Apollo joint venture with Nielsen.

"If the economics are not there for an expansion of Apollo into a rollout mode, we would do two things," he said, "Moving ahead with pieces of it that were smaller cheaper and easier to do. And looking back on the economics of it."