Arbitron Spurns FCC, Courts Industry

by Erik Sass , July 6, 2009

Amid a continuing inquiry by the Federal Communications Commission and concurrent hearings by Congress, Arbitron has filed a comment stating that the FCC does not have the authority to regulate ratings produced by Arbitron's Portable People Meter, a passive electronic measurement device.

At the same time, hoping to placate industry critics, Arbitron launched a new ad campaign in the trade press with the tagline "We Hear You," targeting radio broadcasters.

In its filing with the FCC, Arbitron bluntly asserted that the agency has "absolutely no authority to impose regulations upon Arbitron's exciting new technology" for radio ratings. In support of this assertion, Arbitron noted that Congress has chosen not to involve itself in the technical aspects of media ratings, and has therefore declined to give the FCC jurisdiction over these issues.

Furthermore, the FCC has failed in past attempts to assert regulatory authority over areas not specifically marked out as its jurisdiction in the Communications Act, with courts rejecting them as legal overreaches.

Last week, the FCC received a similar rebuff in a filing by the Media Rating Council, a quasi-official organization formed at the behest of Congress in 1963 to vet media ratings as an industry-supported alternative to direct government regulation.

The MRC is funded by contributions from media companies, which agree to use MRC accreditation as a minimum standard for a new ratings system. The MRC filing to the FCC asserted that "our process is sound, and we believe that any attempt to replicate our industry representation and expertise by a government entity would be difficult if not impossible."

There are strong political overtones to the current dispute over Arbitron's PPM ratings methodology, which minority broadcasters say under-represents key minority demos -- especially African-American and Hispanic male adults ages 18-34 -- leading to large apparent drops in their audience sizes under PPM measurement. Minority broadcasters previously enlisted the help of the attorneys general of New York, New Jersey and Maryland.

However, the majority of big broadcasters (including some vocal critics of Arbitron) seem to be in agreement that the MRC, not the FCC, is the legally appropriate organization to regulate PPM. Still, it's unclear how the MRC can reconcile all these conflicting demands, given its status as a voluntary industry organization, which lacks regulatory power to enforce its decisions.

Some observers believe the congressional hearings and FCC inquiry may be laying the groundwork for an official request for confidential MRC information pertaining to PPM accreditation, potentially including the minutes of MRC deliberations and documents submitted by Arbitron. (MRC reviews are conducted in closed conferences to protect the intellectual property of ratings firms.)

Hoping to rebuild its relationships with the radio industry, Arbitron is also reaching out to broadcasters with new ads in trade publications such as Mediaweek and Radio Ink. They bear the tagline "We Hear You," highlighting Arbitron's commitment to improving PPM sample sizes, being more responsive to the concerns of radio executives, and helping broadcasters profit from PPM with a suite of products to help radio ad sales. The ads also solicit "suggestions and ideas on how Arbitron can strengthen the products and services we provide."

At the same time that it is handling the PR fallout from the FCC inquiry and congressional hearings on PPM, Arbitron is also trying to fend off competition from Nielsen's new sticker-based diary ratings system for radio in smaller and mid-sized markets.

ad campaign, radio, regulation

5 comments about "Arbitron Spurns FCC, Courts Industry".

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Edward Rincon, July 7, 2009 at 9:21 a.m.
It is really difficult to understand how ratings companies like Nielsen and Arbitron are allowed so much latitude by the broadcast industry and Congress to call the shots on the disclosure of such important information. The pharmaceutical and food industries are required to halt sales of a product when it is suspected of harming consumers, and cannot hide behind their "protection of intelluctual property" excuse that prevents external investigators from exploring the events or ingredients that are causing the harm. While the MRC may be a "sound process," its proceedings and membership are also unknown, while its decisions cannot be enforced. Minority broadcasters have no recourse here but to push for greater FCC involvement. The last thing that anybody wants is an organized effort to encourage Hispanic and African-American consumers to boycott ratings companies -- not unlike current efforts by Hispanic evangenlical groups to boycott the Census 2010.
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Rob Frydlewicz from DentsuAegis, July 7, 2009 at 9:28 a.m.

Good for them. Regarding PPM, it is so far superior to the diary that it's ludicrous that some stations are still kicking & screaming. The fact of the matter is that lower ratings don't necessarily mean they're wrong. Sometimes reality bites! Believe it or not but there are some Black & Hispanic stations in PPM markets that have improved their competitive rank with their PPM ratings (something I think Arbitron should tout more). And lower listening levels haven't been confined to just Black & Hispanic stations.

Dave Woodall from fiorano associates, July 9, 2009 at 6:06 a.m.

With all due respect Dr Rincon, what is really difficult for me to understand is how someone in your position can attempt to sensationalize the situation by comparing Nielsen and Arbitron to a drug or food manufacturer. The last time I checked, no one had ever been hospitalized or had died as the result of an audience survey.
As much as anyone, you should understand the difference between a broadcaster; licensed by the government to serve the public interest, and an audience research firm; operating as a private enterprise. Would you also agree to government oversight of Rincon & Associates to ensure the results of your research did no harm? What about Consumer Reports, J.D. Power, or Gallup? The research published by any organization that surveys consumers has the potential to "do harm"; I guess all of them should be placed under direct government supervision.
Seriously, instead of spurious arguments and talks of a boycott Dr Rincon, why don't you just give us the results of your studies proving the PPM's inherent bias?
Because I would hate to lose one of the most promising technologies to ever come along in the field of audience research, to non-existent science and a socio-political spat.

Edward Rincon, July 11, 2009 at 9:02 a.m.

Dave Woodall, thank you for illustrating my point: the blind fascination with new technology and proprietary "black boxes" has led to a measurement system that appears indifferent to the results that it produces. You may want to bury your head in the sand and assume that the PPM does not need improvement, but there are research studies and measurement experts that you apparently have overlooked who have identified significant problems with the PPM and Nielsen's local people meter when used with Hispanic and African-American audiences.

John Grono from GAP Research, August 9, 2009 at 9:12 a.m.

There are two sides to every coin. The PPM does have some issues. These do not relate primarily to the technology as Dr. Rincon seems to believe, but relate to "carry rates". In particular, do the panellists when they wake up first thing in the morning say "gosh, I'd better get the PPM". This is magnified by the fact that breakfast is the key listening time of the day. The problem is that the PPM, once listening has been lost, has no way of 'back-filling' that data. That is, the key problem is a 'people-issue' and not a 'technology-issue'.

But to say that recall based 'tick-the boxes' is the be-all-and-end-all for radio measurement is just plain naive. Every man and his dog know that recall overstates the large stations and the big stars, and conversely small niche stations that are genuinely listened to, tend to be forgotten. The 'halo effect' is alive and well with diaries.

But may I posit a scenario. What, just if, the FCC gets its way and an investigation or audit is conducted (hopefully in conjunction with the MRC) and the PPM (more correctly its panels) are given the green light. Would this not mean that the lower ratings are 'correct'? Would this also not mean that the old diary ratings were over-stated, and more importantly, that the radio stations affected had over-charged and under-delivered historically? This is a slippery slope I know that I wouldn't want to be on! Electronic measurement for a broadcast medium is inevitable. I know I would want to be working as part of the solution rather than against it.

John Grono
GAP Research
Sydney Australia