While contingent on successful test results and, ultimately, client support, the fact that Nielsen and Arbitron have already developed a scenario for deploying the new meters, and the aggressiveness of the plan, surprised many of the meeting's attendees, especially agency executives who said they believed the disclosure presaged a formal commitment by Nielsen to support the system. John Dimling, chairman of Nielsen Media Research, is expected to make a formal statement about Nielsen's support of the system today.
Nielsen retains an exclusive option to develop a joint venture with Nielsen that would own and manage a PPM service in the U.S., but the TV ratings firm has been reluctant to make a formal commitment to do so, and has called for a series of "engineering" tests and market trials to validate the PPMs technology and methodology. Early this year, Nielsen and Arbitron revealed that a series of tests dramatically increased cooperation rates among PPM test samples, a critical concern of Nielsen's early on.
But the PPM rollout scenario caught many observers by surprise and raised a number of new questions. Chief among them was the potential disparity of having Nielsen's top 10 TV markets measured by the controversial local people meter ratings system, but having markets 11 through 60 measured by PPMs. Smaller markets presumably would still be measured via conventional paper diaries, though Nielsen has alluded to the development of a "cheap," reusable "electronic diary" that could be sent and returned via mail.
The aggressiveness of the PPM rollout plan also has some observers wondering whether it might not presage a much deeper relationship between Nielsen and Arbitron, which have been fierce rivals in the past and continue to compete in some markets, particularly the development of new outdoor media measurement systems. There has been speculation recently that Nielsen parent VNU might make a bid to acquire Arbitron, a publicly traded company. Recently, VNU has been shedding some assets to improve its balance sheet, including the sale of its European directories business, which raised about $2.5 billion. Based on Arbitron's closing share price of $36.05 on Tuesday, the company has a market capitalization of $1.12 billion, according to Yahoo! Finance.
Meanwhile, the PPM's Houston test, the second major U.S. field trial of the PPM system, has been plagued by uncertainty, with several top radio broadcasters threatening to boycott it by not allowing their programming to be coded for the PPM meters. The radio industry has been especially concerned by the economic impact PPMs could have on the radio marketplace, which would create the first ever system for simultaneously measuring ratings for two media electronically. To help quell the fears of the radio industry, the Radio Advertising Bureau and Arbitron have been commissioning a series of economic market impact studies.
Arbitron expects the test to begin yielding ratings by the second quarter of 2005, based on a sample of 2,100 respondents. The test is expected to continue through the winter of 2006, and if the results are deemed appropriate, Houston would likely become the first of the 50 markets to have the service deployed.
"What we've said is if, if, if," acknowledged Arbitron spokesman Thom Mocarsky, adding that it was premature to call the plan a fait accompli.