• by Erik Sass , January 8, 2007

Radio One has agreed to encode its radio signals in Philadelphia and Los Angeles for measurement by Arbitron's Portable People Meter (PPM), a passive electronic-measurement system touted as a replacement for old-fashioned paper diaries. Radio One's decision--made under pressure from advertisers, media planners, other radio station owners and Arbitron itself--leaves Clear Channel Radio as the sole holdout in Philadelphia.

The announcement from Radio One brings the nation's largest broadcaster targeting African-Americans on board for PPM. In recent weeks, some media agencies have vowed to boycott any broadcaster that doesn't encode for PPM results.

Upping the ante, Arbitron circulated a resolution from its Advertiser/Agency Advisory Council urging all radio station owners to begin encoding. Apparently, Radio One succumbed to this pressure.

To date, almost two-thirds of broadcasters in the Philadelphia market (measured by revenue share) have subscribed to PPM. Those that haven't yet subscribed are encoding their signal for PPM measurement. The system is set to go live for a two-month demonstration period in Philadelphia and Los Angeles on Jan. 11. However, Clear Channel Radio is standing firm for now, using its size to dilute the value of PPM results, and thus dampen demand.

Clear Channel is one of the biggest players in Philadelphia and Los Angeles: in summer 2006, its stations received roughly a 20% share of average quarter-hour listening. The company's decision not to encode its radio signals leaves a question mark hanging over some of the biggest properties in both cities.

The dispute over signal encoding for the Philadelphia area is the latest chapter in a long-standing feud between Clear Channel and Arbitron over the suitability of PPM as a next-generation electronic measurement system for radio.

The industry as a whole is impatient for electronic measurement, with about one-third of stations in the top 50 markets (measured by revenue share) subscribing for results when the service rolls out. But Clear Channel has cited the repeated refusals of the Media Rating Council (MRC) to grant accreditation to PPM as reason for its skepticism.

Clear Channel is leading a lengthy industry audit of electronic-measurement devices, including PPM and competitors. One of the conditions set by the industry committee for selecting a new ratings currency is MRC accreditation. The MRC review and accreditation process are continuing, but there is no timeline or guarantee of approval.

Meanwhile, some industry observers say the dispute between Clear Channel and Arbitron--including a war of words over the MRC accreditation process and now signal encoding--is actually a cover for fierce price negotiations between the nation's leading radio network and its main ratings firm, haggling over the eventual cost of PPM ratings.

Clear Channel has found allies in smaller radio station owners that allege Arbitron's tactics are heavy-handed and pricing is unfair.