• by Joe Mandese , June 13, 2006

Arbitron has been hit by a double-whammy in its push to introduce a new radio audience measurement service based on its storied portable people meter system. The media industry's self-regulatory research authority, the Media Rating Council, refused to accredit the system, and a radio industry task force evaluating proposals for new audience ratings services rejected Arbitron's preliminary proposal as being too superficial on some crucial areas.

The MRC's decision to decline accreditation is a significant setback, because Arbitron executives have said for months that the critical endorsement was imminent. The decision will force Arbitron to delay a July launch of the PPM service in Houston, one of the system's original test beds, which was supposed to be the first of a 50-market rollout of the metered service.

Arbitron said it would continue to measure Houston using its old paper-diary-based method, though it said it plans to continue releasing monthly radio and TV "demonstration data" from a 2,000-person PPM ratings panel that is active in the market.

Arbitron said it would continue to work with the MRC to resolve the issues that block accreditation. In a letter to Arbitron, MRC Executive Director George Ivie said the MRC's request for additional information "is not unusual," but declined to elaborate, citing the confidentiality of its audit process.

Jess Hanson, senior vice president-research at radio giant Clear Channel Communications, and one of the executives overseeing the radio industry request for proposals, was far less oblique about Arbitron's shortcomings. In a letter obtained by MediaDailyNews, Hanson described Arbitron's response to the committee's "system essentials" presentation as being "touched on at a surface level or [not] addressed at all."

In the letter, addressed to Pierre Bouvard, the head of Arbitron's PPM initiative, Hanson added, "Pierre, these items were deemed essential to the industry's needs in a new ratings system for a reason. In the view of this cross-industry team, they are indeed essential."

The evaluation committee is also considering an alternative proposal from The Media Audit that is based on a "smart phone" technology capable of measuring radio audiences.

The two setbacks come at a critical juncture for Arbitron, which has bet the farm on the PPM as the future of radio audience measurement. They follow Nielsen Media Research's decision to pass on a joint venture TV and radio ratings system earlier this year, though Arbitron has said it is still exploring ways of getting back into the TV measurement business.

On the plus side, Arbitron recently got an important vote of confidence from CBS Radio, which signed a long-term deal to use the PPM service. About 60 percent of Arbitron's radio station commitments for the PPM come from CBS.