• by Joe Mandese  @mp_joemandese, July 22, 2005

While the immense political debate surrounding television audience research has taken center stage, the audience research industry for a variety of major traditional media - including radio, outdoor and even television - is reaching an inflection point that will culminate around the end of the year as major players realign and position themselves for version 2.0 of audience measurement.

Consider radio, for example. Within the next six months, Arbitron the current sole provider of U.S. radio ratings, will resolve key developments concerning its future, including how and when it might deploy its so-called portable people meter system, and whether it will face and new, significant competition. The outdoor media industry, meanwhile, has begun researching a new method for "visually adjusting" how consumers are exposed to outdoor ads, and has, or is about to issue a request for proposal for its first ever audience ratings service.

One of those bidders may be Navigauge, a promising new research that has developed a sophisticated method of measuring both outdoor media and radio audiences utilizing state-of-the-art global positioning satellite technology. While Navigauge was finding it difficult to crack the radio market monopoly controlled by Arbitron, and was considered to be on the financial ropes, it announced a new partnership with a deeply financed player, erinMedia, which adds a new level of intrigue to the media research marketplace.

erinMedia, which has been trying to develop a means of measuring TV audiences utilizing digital set-top data from cable and satellite systems and other devices, recently filed an antitrust suit against Nielsen Media Research. By joining with Navigauge, the two companies are pitting themselves as the most obvious adversaries to an Arbitron/Nielsen alliance.

Arbitron and Nielsen, meanwhile, are involved in two separate projects that could lead to joint ventures, the development of a portable people meter-based radio and TV audience measurement system, and media and marketing research system Project Apollo. They also have been competing on the development of an outdoor audience ratings system. While Nielsen has appeared to have the lead on that, the new backing of Navigauge raises it as a serious competitor for outdoor audience measurement, and one that would be seamlessly integrated with radio, as opposed to Arbitron's PPM system, which would be integrated with TV. Or maybe not, if Nielsen opts out of its option to develop a TV ratings system based on the technology.

In the middle of all these events, Clear Channel Communications, the largest operator of radio and outdoor media in the U.S., has announced a request for proposal for a new, state-of-the-art radio audience measurement system, putting Arbitron's biggest account at risk.

"I do think there is a convergence of events in the next six months, whether it is the Clear Channel RFP, which has due date of Dec. 31, or the [PPM's Media Rating Council] accreditation process, which has a fourth quarter due date, or Nielsen's publicly stated objective of making a decision [about its PPM option] in the fourth quarter," said Arbitron CEO Steve Morris during a second quarter earnings briefing with Wall Street analysts on Thursday. "Sometime around the end of the year things will come to a head."

The good news, said Morris, is that the marketplace for radio and TV "continues to be one of slow, but steady growth" despite the "siphoning" of ad dollars to new, digital media, especially online. The bad news for a publicly traded company dependent on radio audience measurement and placing most of its bets on the PPM system, is that it is facing new competition, which potentially could include - ironically - its erstwhile partner Nielsen.

Asked who he believed had responded to Clear Channel's RFP for a new radio ratings system, Morris said, "I suspect they sent one to Navigauge. I 'm sure they sent one to Nielsen." Other players he said included leading European radio research companies.

Despite that competition, Morris said he believed Arbitron was "in a good place to respond to the kind of impatience [Clear Channel is] showing."

Whether Clear Channel will feel that way remains to be seen, but one source said to be seriously consider a ratings contract with Navigauge is Traffic Audit Bureau, the company that measures the base circulation of outdoor advertising, which is believed to have issued, or is poised to issue an official RFP for an outdoor ratings system. Unlike virtually all other media, outdoor has never had a ratings system providing data on audience composition and demographics, key components of any media plan. Such a development, along with the TAB's new Visually Adjusted Impact (VAI) index scores are expected to be a boon to outdoor advertising at a time when big marketers are turning their attention away from heavily cluttered TV, radio and print media to outdoor outlets they believe hold more captive audiences.

None of the systems are perfect, said a long-time user of all forms of media research, noting they all have trade-offs. As promising as Navigauge is, for example, it currently only measures radio and outdoor media exposure to people driving in cars. "While that's extremely important to the radio and outdoor marketplace, it would probably have to be supplemented by something else."

Such supplementation, experts say, may be the future of media research, with layers of data being used to adjust or factor other layers.

In fact, Arbitron's Morris alluded to such a hybrid scenario involving a rollout of the PPM, which Arbitron and Nielsen have different goals for. While Arbitron wants to deploy the system in the nation's largest media markets, Nielsen is publicly committed to its conventional people meters in the top ten markets. In fact, it is the cornerstone of Nielsen's national build out of its people meter system.

"If we're going to serve the radio industry we certainly have to put PPMs where the money is and the money is in the top 10 markets," said Morris. "With or without Nielsen we have to figure out a way to get PPMs in the top 10 markets."