• by Erik Sass  @eriksass1, June 3, 2009

ESPN Radio has signed up for radio ratings provided by the Nielsen Company, the media research firm announced Wednesday, making it the third big-name radio group to subscribe to the new service, scheduled to launch in August.

This good news for Nielsen is bad news for Arbitron, the dominant radio ratings firm, highlighting the possibility that other big clients will defect to the rival ratings system.

The ESPN Radio deal gives the sports network access to Nielsen measurements of radio audiences in 51 smaller and mid-sized U.S. markets. Overall, the ESPN Radio Network includes 335 owned or affiliated stations; it also provides content to 750 stations covering the top 100 DMAs nationwide.

Measurement in the biggest markets is still dominated by Arbitron, which has shifted from paper diary ratings to measurement by the Portable People Meter, a passive electronic measurement device, over the last year. However, Arbitron faces competition from Nielsen in smaller and mid-sized markets, where Arbitron plans to continue using the paper diary system.

Angling for these second-tier markets, Nielsen has touted its own diary system -- which uses stickers, rather than requiring panelists to write down which station they listened to -- as more accurate than Arbitron's. Nielsen's diary ratings service is also less costly than Arbitron's, a key selling point for broadcasters that have complained Arbitron's fees are excessive.

There is no question that some radio networks, dissatisfied with the high cost of Arbitron ratings, are cultivating Nielsen's diary system to make the radio ratings business more competitive. Dr. Tom Evans, ESPN's vice president for audio research and special projects, noted: "We have a long history of supporting innovative research."

ESPN Radio joins Clear Channel and Cumulus, which both announced plans to replace Arbitron ratings with Nielsen ratings in various markets (18 Clear Channel markets and 50 Cumulus markets). In May, Clear Channel stated it is "fully committed" to Nielsen measurement in the 18 markets indicated and pointedly said: "We remain interested in expanding our relationship [with Nielsen] to include additional markets."