• by Joe Mandese  @mp_joemandese, October 19, 2007

Radio ratings giant Arbitron Thursday reported tepid third quarter results, reflecting the strains of deploying its portable people meter system in new markets and supporting the an expensive field trail of its ambitious Project Apollo venture with Nielsen Co. But both those endeavors are beginning to yield promising results. During a call with analysts following its earnings release, Arbitron executives said the new PPM service would be ready to roll out in New York, the nation's largest media market, in December, and that several other major markets would follow shortly thereafter.

The big market expansions come amid controversies surrounding Arbitron's first commercially deployed PPM system in Houston, where some clients are crying foul over the representation of Arbitron's sample and the fact that its ratings are being "weighed" to adjust for certain under-represented radio listeners.

It's an "issue of sampling validity in Houston," Arbitron chief Stephen Morris told analysts, adding, "There is not a question that this data is representative for buying and selling."

Morris said the issues had more to do with the "utility" and "confidence" in the data, and that Arbitron was looking into ways of boosting the quality of the sample.

In terms of Project Apollo, the expensive single-source measurement venture combining Arbitron's PPM technology, with Nielsen's consumer product scanning systems, Morris said "enthusiasm" among advertisers participating in the test remains high. He cited the release of a recent benchmark study proving that TV advertising has a direct impact on consumer price promotions, a finding he said would enable many marketers to return the expensive promotional practice back to their bottom lines or reinvest in brand advertising.

"It's pretty powerful stuff," he said, adding, "When you do studies that talk about financial returns by medium and how to construct the best media plan in terms of mix."

Morris said that study was done on behalf of one undisclosed "brand X" client, but that Arbitron and Nielsen were working to replicate similar research with other big marketers to convince them on the long-term ROI of subscribing to Apollo. Ultimately, he said, such research would "change their behavior" in terms of how they deploy their marketing mix, something that could have huge implications for media.

Recently, Arbitron and Nielsen agreed to extend the 11,000 consumer pilot panel into the first quarter of 2008 to allow for more tests to prove the project's efficacy as a sustainable syndicated research service.