• by Frank Saxe , March 5, 2003

Nielsen Media Research may be moving forward with its plans to rollout its Local People Meters (LPM) into all the top ten television markets by 2006, but it will continue to look at a new technology that could prove to be better, particularly at capturing out-of-home viewing. Nielsen has decided to deepen its existing relationship with radio ratings service Arbitron, which is developing a pager-like device that will detect nearly all media exposure.

“We spent about four months negotiating this damn thing, so I hope its progress,” Arbitron CEO Steve Morris told analysts at the Bear Stearns Media Conference in Palm Beach this week. The two companies have worked together since field-testing began in Philadelphia in June 2000. This week’s agreement not only increases Nielsen’s financial commitment, but also its resources in a joint research program to evaluate the Portable People Meter (PPM). The pager-sized device automatically detects inaudible codes that TV and radio broadcasters as well as cable networks embed in the audio portion of their programming that the device picks up and reports back to Arbitron for tabulation. Under the agreement, Nielsen and Arbitron will work side-by-side to evaluate methods for improving response rates in the PPM sample, assessing its audio capabilities, and analyzing results from using both Nielsen and PPM meters in the same sample homes.

Ever since it announced last month that it was putting its own LPM into top ten TV markets within the next four years, there was doubt if Nielsen would continue working with Arbitron on the PPM. Nielsen says it is looking at all options to increase the reliability of its measurement services. Nielsen’s Anne Elliot explains that PPM and LPM aren’t necessarily at adds with one another. “LPM is a tried and true, known quantity. We just don’t have answer yet on PPM.” She says it “offers some potential pluses” such as tracking out of home TV viewing, like Monday Night Football viewing at restaurants, something Nielsen’s clients have been pressing it for. That also opens the door to possible side-by-side PPM and LPM monitoring. “There may be ways we could do that,” says Elliot, but first she says PPM response rates will need to be improved.

Morris agrees the number one priority will be to increase the response rate for PPM. “Our opinion is that the number we have today in Philadelphia is too low. Nielsen agrees with us, so we’re going to drive that number up.” The two companies will begin testing to see if Nielsen’s door-to-door recruitment method works for recruiting a PPM panel, among other things. The two companies anticipate reporting initial results of these expanded tests by Fall 2003. Says Morris, “That’s in time to allow them to convert their LPM rollout into a PPM rollout if that is what research results and economics dictate.”

If Nielsen opts out, Morris says Arbitron won’t be left at the alter, declaring, “We have a life without Nielsen.” Instead, he explains, they will rework the applications for PPM. “If Nielsen says no, we don’t pack up our bags and leave PPM behind. PPM is the answer to audience measurement in the long-term, certainly in radio, and very much so in TV and cable as well. So if Nielsen weren’t participating in top ten markets, we would at a minimum move forward internationally.” In the U.S., he said it would be used “defensively” if any other ratings service tried to start an electronic-based radio ratings service, although Arbitron would stick to using diaries for radio in the meantime. “Radio is going to have electronic measurement some day, it’s inevitable, the only question is when – and we want to be in a position to do that.”

As for the cost, Morris concedes they may be higher than previously thought, particularly if testing of Nielsen’s door-to-door recruitment tests work for PPM. “That’s why we haven’t told radio what that price is going to be until we know the final answer of what it takes to get that response rate, we don’t have a fix on it.”