• by Joe Mandese  @mp_joemandese, May 19, 2006

In a move that appears to let some of the air out of a radio industry effort to develop new competition in the radio audience measurement field, CBS Radio Thursday said it entered a seven-year agreement to use Arbitron's new portable people meter (PPM) ratings. The move was something of a surprise as CBS was part of an industry initiative pushed by radio giant Clear Channel Communications, that has been evaluating proposals from Arbitron and two other potential research suppliers: Local market media researcher The Media Audit; and magazine audience researcher Mediamark Research Inc.

The move by CBS, the second largest operator of radio stations behind Clear Channel, also had interesting timing, coming on the same day as big group radio owners involved in the so-called Cross-Industry Evaluation Team were scheduled to hold an end-of-day conference call to discuss the efforts status in the wake of MRI's decision to drop out of the process due to the industry's reluctance to help fund a mandatory field test. While details of that call could not be learned at presstime, an executive familiar with the agenda said it would include talks on funding MRI's field test. Earlier this week, Clear Channel Radio CEO John Hogan told MediaDailyNews the company would help fund MRI's trial. It's still unclear whether MRI would rejoin the process, but it seemed to leave that door open in a letter sent to Clear Channel last Friday.

CBS' move was something of a surprise because, like many other top radio broadcasters, it had been holding out on doing a deal with Arbitron for the PPM, because Arbitron has been seeking significant price increases over its current paper-based diary system. According to executives familiar with those negotiations, the PPM costs are more than 60 percent higher than Arbitron's current ratings. The move suggests that CBS may have cut a better deal.

"CBS Radio is counting on the PPM to enhance the value of both our programming and the audiences we reach in the eyes of our advertisers," stated CBS Radio Chairman-CEO Joel Hollander, adding, "We're pleased to be the first major broadcaster to embrace the future by signing a contract for Arbitron's next-generation electronic audience measurement system. Radio has been searching for a more accountable method to provide advertisers with valuable information about its listeners, and I'm confident that the PPM will be supported throughout the industry."

Arbitron's stock, which had been sagging since April when Nielsen announced it was not moving forward on a partnership with Arbitron on the PPM system, rebounded more than 5 percent following the CBS announcement.

MRI had no comment, but Bob Jordan, president of The Media Audit, said: "We are undaunted by the CBS announcement and look forward to working with the next generation committee in its effort to bring the radio and advertising industries the best possible solution for media measurement."