• by Frank Saxe , February 10, 2003

Radio ratings firm Arbitron may face congressional hearings to answer questions on how it develops ratings for Spanish-speaking Americans. Rep. Bob Menendez (D-NJ) believes a lack in progress toward updating the ratings service’s methodology is tantamount to “discrimination” against operators of stations targeting Hispanics.

“I have heard from many Hispanic broadcasters and the manner that they come about the ratings. It has cost them dearly,” Menendez tells MediaPost from his Washington, DC office. Menendez argues that Arbitron’s old research techniques have led to consistently lower ratings, they Hispanic broadcasters are being hurt. “If Hispanics continue to get paid at a discount or can’t make the same amount of money, then the goal of having a multiplicity of voices on the people’s radio dial is undercut. I don't find it acceptable that they are paid inferior amounts,” says Menendez. He wants the Congressional Hispanic Caucus’ media task force to look into Arbitron’s battle with Spanish-language broadcasters. Depending on what they’ll find, Menendez says he may ask Rep. Billy Tauzin (R-LA) to hold hearings on Arbitron in the House Commerce Committee.

The issue is centered on Arbitron’s recent announcement that it will not be able to devise a reliable system to create weighted ratings for Spanish speakers until 2006. (Weighting is a standard statistical technique that is used to compensate for any over-sampling or under-sampling of a particular demographic characteristic.) Although the company is offering to create an interim system that would issue weighted ratings in select markets twice a year, Spanish broadcasters are “appalled” by the delays.

Arbitron president of U.S. Media Services Owen Charlebois says changes in methodology need to be done carefully, and normally take years. “The Hispanic broadcasters are important customers, as all of our customers are, and we are moving as quickly as possible without comprising our methodology.” Last November, Arbitron committed to implementing weighting by language preference of Hispanic diary keepers in order to enhance its ratings. Since then, they have begun exploring various alternatives, but the companies argue they must take all their customers into account. “We have an entire universe of broadcasters that we need to take into consider,” says Charlebois.

A major factor in slowing down their progress is there are no accurate numbers of how many Spanish speakers live in each market, something that could easily be rectified by an additional question or two on the U.S. Census. One Arbitron executive, asking not to be identified, said it would be more helpful if Menendez looked to the Census – not hearings.

But Menendez fires back, “The Census is not in the business of solving Arbitron’s problem or underwriting its costs. They obviously don’t read the Census figures or keep up with the times.” Menendez has had radio on his radar ever since a rep firm’s memo surfaced telling buyers to avoid urban and ethnic stations. Menendez staff members are still looking into what action Congress could take against Arbitron, admitting its only course of action beyond “informational hearings” may be to ask the Justice Department or Federal Trade Commission to look into Arbitron’s “monopoly practices.”

“Congressional hearings would definitely get Arbitron’s attention,” says Jeff Williams, director of research for Hispanic Broadcasting Corp., although he wonders whether they would accomplish much more.

Spanish Broadcasting Systems executive VP Bill Tanner thinks a little heat from Capitol Hill could help. “It is a business that is a monopoly and it is not taking care of its customers,” says Tanner.

In the meantime, Arbitron has begun meeting with broadcasters about its interim solution for Spanish-language weighting. It met with radio executives and agency buyers last week in a pair of conference calls outlining how its Hispanic Market Service could be altered as a short-term fix – as long as broadcasters don’t mind just two ratings reports a year. It is also dependent on Arbitron licensing market data from AC Nielsen, which has population counts in a handful of markets.

At the moment, it is clear Arbitron executives have a lot of selling left to do. “Arbitron is stonewalling. They’re offering too little, too late,” says Tanner, arguing the two-times-a-year interim solution won’t work, in part because broadcasters and advertisers would have to wait until late July to get a ratings response to a change that happens in January.

Williams also doubts that putting a second set of data into the marketplace will make things better either. “There is going to be two sets of numbers out there for my stations. It’s confusing and it’s going to cause a lot of negotiations with what the real numbers are.” Stations won’t be able to sell against the higher figure, since agencies will try to force prices down with the general market four-book numbers, he predicts.

One issue that never came up on the call: price. “They avoided it like the plague,” says one participant in last week’s conference call.

Tanner is hoping advertisers will join Spanish-language broadcasters in putting pressure on Arbitron. “If you are buying a spot on [format] KSCA in Los Angeles, you have no idea if you’re getting what you pay for,” he argues.