Pandora and Local Radio

Harker Research posted an interesting analysis a few weeks ago, comparing the ratings of Pandora to those of the typical terrestrial radio station. Here's the main point:

If we divide Pandora’s AAS by the US population, we’ll have their rating. The 12+ population of the US is about 256 million, so Pandora’s national rating is something like 0.1. It might be a little higher in some markets, a little lower in others, but on average Pandora has the same average listenership as a typical niche programmed AM station, ranked outside the top 20.

This ties into my earlier point about Pandora's time spent listening. There's a lot of tune-in to Pandora, but not a lot of stickiness.

Read the Harker Research piece here.

Pandora Listeners Do Not Seem to Listen Long

Ando Media released their January rankings of streaming audio entities last week. Pandora is on top of the heap in "session starts," with 100 million plus. Pretty impressive, even when you consider that this is as duplicated number and not an unduplicated measure like cume.

But the really interesting bit is that Pandora listeners spend less than an hour with the service for each session, on average. In comparison, Cox Radio's streaming listeners spend over two hours for each session, Saga and Citadel's spend considerably more than 3 hours.

There has been a lot of talk about the stickiness of Pandora, but these numbers expose the fact that the service is cool, but boring. People are finding that the streams from broadcasters like Saga, Cox, Citadel, CBS and Clear Channel are more than twice as engaging.

As more streaming moves from the home and office to the car, it will be interesting to see how these numbers play out. For example, will Pandora listeners bring their listening to the car? The stats will show those connections as additional session starts. For listeners of terrestrial stations who use the stream when in the office and listen to the same station in the car, the behavior might well be to forgo listening on IP devices and revert to the car radio. This will be a complicated behavior to measure; PPM is probably the only tool that can do it.

The complete pdf of the Ando Media January report is available by clicking this link.

Nielsen, Arbitron and the Upcoming Battle - Part II: Engaged

Several months ago, I wrote an article about the potential for battle between Arbitron and Nielsen. It was called "Nielsen, Arbitron and the Upcoming Battle." You can link to it here.

Since then, Arbitron announced its "ARB-TV" program and just last week the Financial Times broke a story about a new consortium of advertisers and agencies

In today's "Taylor on Radio-Info," Tom Taylor had a couple of paragraphs on this topic. He says, in part:

Now, #3, I’m hearing more concrete chatter about Area 51-kinds of research using an electronic detector much smaller than a PPM.

I thought to myself - "huh, top secret development? Didn't I post a link to the actual photo of the Nielsen Go Meter?"

So, I popped back to the article and - lo and behold - the link to the picture of the "Go-Meter" was broken. A Google search for "Go Meter" or the file name for the original picture turned up nothing. Any reference to the "Go Meter" has been (it seems) removed from the Nielsen website. Interesting.

So - Tom is right. Nielsen HAS gone stealth on its PPM attack project.

Also in his article, Tom mentions the idea of installing encoding software on a cell phone that would perform the function of a device like the PPM. There are many problems with using a mobile device like a cell phone as a measurement device for audience ratings. The biggest one is the instability of the platform. A measurement device for media audience ratings needs to work like a simple appliance. Having other applications running on the platform at the same time raises the possibility of instability exponentially. Thus, the whole platform could crash and detection of media exposure would stop. The way to avoid this is to use an imbedded operating system on a single-function device, like the PPM. These devices can be rock-solid stable with very high levels of reliability. There are also behavioral reasons why the cell-phone solution doesn't make sense, but this single technical reason is enough.

So - Arbitron and Nielsen are rattling sabers, but in a "muffled" way. It's clear that the muffles will be taken off the sabers pretty soon. Nielsen will attack Arbitron in the major markets with portable electronic measurement. Arbitron's move is to encroach upon Nielsen with its ARB-TV project and alignments with companies like TRA and Tivo.

Let the battles begin!

Ratings, Radio, Sales - The Debate Goes On

Chuck Francis, VP New Media at RemergeMedia.com, wrote a well-received article in Radio Business Report recently called "A New Day for Radio."

Chuck makes the valid point that, in truth, ratings don't matter, except to "...those that provide ratings." However, this common-sense statement misses the mark. Yes, it's not the ratings that matter to the listener or the advertiser. It's the thing that the ratings represent.

For example, Chuck says:

In the years I spent as a Program Director I cannot recall one single instance where a listener came up to me at an event or a remote and said: “the reason I listen to your station is because your station the number one station.” In fact, even if your station is 13th in the market – I’d argue you’re number one in the minds of the people that listen to you regularly.

One of the reasons that a listener is loyal to a station is because of its reputation among her peers. The listener doesn't look at the ratings and make a rational decision about whether or not to listen to a station because it's #1 in one category or another, but she does decide whether to listen partially based on her peer group's relationship to the station. The ratings are a surrogate for this - they tell us roughly how many and what kind of people are listening to each station. They tell us about the listeners' peer groups.

On the advertiser side, the ratings are a surrogate for a true measure of results. In the absence of a way to directly measure the ability of a station to deliver results for a specific product, the ratings system was developed in an attempt to predict what will happen if you run a spot on a station.

Those stations who achieve success without ratings have found other ways to measure their reputation with their audience and to predict the results their advertisers will have when they run a spot on the station. However, I suspect that these substitutes for ratings remain surrogates of a direct measurement of reputation or results.

TRA, a research firm in New York, is developing a very interesting way to measure results in TV advertising... a methodology which could well be transferred to radio and other media. Instead of measuring how many people are viewing a particular program, TRA measures how many people actually were exposed to a specific ad and how many of those people actually purchased the product being advertised. This is similar in many ways to the work that was done on Arbitron and Nielsen's suspended Project Apollo, but TRA is processing millions of households' viewing data and matching it up against their purchasing data. As this platform matures and is able to capture not only TV viewing but also other forms of media, we will move away from the surrogacy of ratings and towards the direct measurement of the results of radio campaigns.

Of course, it is not likely that this direct measurement of results will be applicable for all advertisers, particularly local retailers. As data is developed inferences will be possible that are much more precise than today's rating system. TRA could syndicate their data in such a way as to provide local decision-makers tools to determine which media selections are best for their businesses.

Direct response radio marketers are measuring this today, for their clients. One particularly sophisticated firm, Strategic Media, has literally written the book on the subject. Through extensive testing and results measurement, they have built very detailed databases of the stations and creative execution that works best for their clients. Perhaps local radio can learn from this and develop similar data for their advertisers to use.

Please share your views on this subject by commenting on this article.

Comparing PPM Streaming Data to Actual Server Stream Metrics

Mark Ramsey, in a recent article on Hear 2.0, posed an interesting exercise for broadcasters - calculate the difference between your stream's cume in PPM to the records that your CDN provides for total unique connections for the same period.

He asked for responses to these case studies. So - in an effort to make this easy to do, here's a link to a spreadsheet where you can enter the info for your stream and compare the results with others:

Has Arbitron really exited the streaming audio measurement biz?

Katy Bachman, in a brief article in MediaWeek reporting on the decision by TargetSpot to use AndoMedia for its streaming audio measurement, also stated that:

Arbitron quietly decided to get out of the streaming radio ratings business earlier this year and discontinued its relationship with comScore. According to industry sources, Arbitron was unable to make money from the business faced with a competitor who charged little or nothing for the ratings and delivered them as a byproduct of its ad server business.

Well, it must have been very quiet, because the only other mention of this I found was on the blog Internetradioworld in a post on April 9th:

According to industry sources, Arbitron was unable to make money from the business faced with Ando Media, their main competitor, who charged little or nothing for the ratings and delivered them as a byproduct of its ad server business.

InternetRadioWorld's blog entry seems to be an analysis of the impact of such an exit on the industry.

Both of these articles were within days of Arbitron and Edison's announcement of the research from their "Infinite Dial 2009" survey indicating that online radio listening cume audience has increased to 42 Million.

Now - Michael Skarzynski, the new CEO at Arbitron, and all the other folks at Arbitron, are pretty smart. I strongly doubt that Arbitron is "getting out" the streaming audio measurement business and leaving it to AndoMedia. And the folks at ComScore are quite bright, too. Measurement of streaming media has been a big investment for them and the market for this data is only going to grow. So, what's up here?

Arbitron Adding Significant New Feature to PPM

In the flurry of press announcements heralding the start of the NAB Show in Las Vegas today, Harmonic Inc. and Arbitron Inc. announced the use of Harmonic's Rhozet™ Carbon Coder universal transcoding technology in Arbitron's PPM media research services. In a quote from the press release, Taymoor Arshi, Chief Technology Officer at Arbitron, said:

"Our goal is to offer our customers new measurement solutions using our Portable People Meter technology. Our integration with Rhozet Carbon Coder helps by providing customers with the ability to prepare their content within their current workflows for inclusion in our media research services."

The press release further states:

The Carbon Coder software will be used in production pipelines to embed an inaudible code into the audio portion of entertainment and advertising content. This code can be detected by the Arbitron Portable People Meter™ (PPM™).

What does this mean for the PPM service? Theoretically, any digitally processed content - programming, commercials, and so on - can be encoded with this technology. Currently, a special "PPM™ Encoder" is required to insert the sub-audible code in the content, typically in the audio chain of the broadcaster. While perfect for measurement of media outlet audience, the current technology does not allow for the direct measurement of specific program elements like commercials and features. The Rhozet Carbon Coder will allow Arbitron to measure audience levels for all encoded media content - regardless of the source. For example, to measure exposure to a specific commercial or album track, you would need to know the exact time that the content aired on each outlet. You would then need to cross-tab this information with the PPM™ rating for that exact time, for every outlet. While not impossible, the current state of reporting of this information is quite challenging. One company, MediaMonitors (a division of RCS, which is owned by Clear Channel) has built a business around this process with ground-breaking products like Audience Reaction™ and Mscore™. MediaMonitors accomplishes this by electronically monitoring radio stations, storing "fingerprints" of the content in their database, and then cross-tabbing with the minute-by-minute PPM™ data. The power of MediaMonitor's solution is that it does not require encoding of the content prior to broadcast. The weakness - in the new world of encoded content that Arbitron and Harmony are creating - is that for encoded content, you will be able to determine exposure whether or not the outlet itself is encoding. An advertiser would be able to have a window on exposure to a specific commercial - whether video or audio - across all platforms that are measurable by the PPM™ device. This is very powerful, and when fully matured, the technology will have the potential to change the media marketplace in very significant ways.

Imagine, if you will, a video that is originally aired on a broadcast TV network. The audio is re-broadcast on radio stations around the country. Clips of the video are posted on YouTube. Elements of the video are edited and placed in various podcasts. Re-runs air on cable networks. Jon Stewart airs a clip. You get the idea - all of the exposure to this content will be measurable in PPM™ markets if the original content is encoded with the Arbitron/Rhoznet Carbon Code.

This relatively quiet announcement at a trade show generally focused on broadcast engineering will have a profound impact on the entire business of media. And, it's another "shot across the bow" by Arbitron to it's rival, Nielsen.

Interview with Ernest H. Clay of ARB

I found an archived interview of Ernest H. Clay of ARB, circa 1960, on the subject of TV ratings as they stood at the time. Very informative and many of the questions raised are the same that we hear today. Listen here.

Nielsen, Arbitron and the upcoming battle

Does Nielsen really care about measuring radio in just small and medium markets? The big prize is - and always has been - measuring radio in major markets and nationwide, using meter technology. This is where they are going.

In an article on March 19th in Tom Taylor's Radio-Info, Tom said:

"What kind of electronic measurement is Nielsen thinking about, for radio?

One research-industry veteran tells me “look, the competition with Arbitron will keep everybody on their toes. But they’re not doing this just to rate 51 small markets for Cumulus and Clear Channel. And they must know that when they look at the bigger markets that have the Arbitron meter, they’re not going to be able to break in there with a diary.” He figures “they must be working on something electronic” to counter the Arbitron PPM. more...

Nielsen has had a portable media measurement device in the field for several years now. It is the "Go Meter," and has a similar technological design to Arbitron's PPM device.

Here's a photo of the Go Meter:


Nielsen could use a national rollout of the Go Meter and have the radio service subsidized by the TV service. It certainly will help economies of scale to be able to spread the cost of a national roll-out across multiple media. And, remember, Nielsen is also very interested in streaming video and audio measurement. So, they have a lot of ways to monetize the deployment of this system.

My view, radical though it may seem, is that the sticker diary program announced by Nielsen and Cumulus is a straw horse for deployment of Go Meters in the Cumulus markets in preparation for an all-out attack on Arbitron's PPM strongholds in the top markets. Nielsen has a bottom-up strategy versus Arbitron's top-down strategy.

Will this be a "slam-dunk" for Nielsen? No - because the new management team being formed at Arbitron, led by Michael Skarzynski, undoubtedly sees this coming.

This will be a tremendously interesting battle.

High-Tech Gear Blogger gets Nielsen Radio Diary

Nicholas Deleon, of the well known high-tech gear blog Crunchgear, posted yesterday about the KRI Armband Portable HD Radio Player. Nothing in the HD Radio review that we hadn't seen on Orbitcast, but Nicholas did had one other interesting comment:

In other radio news, my household has been chosen to be a part of Nielsen radio’s stat-tracking thing. (I received the initial “you’ll be getting a giant packaged with official Nielsen materials shortly” yesterday.) The notebook will be filled out thusly: Opie and Anthony, Monday-Friday, 6am-9am, 92.3FM; every other entry will show that, nope, this household is not listening to that drivel known as terrestrial radio. Please plan your business accordingly.

It will be interesting to follow Nicholas' posts as he experiences the new Nielsen service. Since it seems that his household will be reporting listening to only CBS' K-Rock, I guess Cumulus and Clear Channel will be disappointed. My guess is that he's being surveyed for the Westchester market - that being the closest to NYC (home of K-Rock) of the 51 being surveyed. Or - is he getting Nielsen confused with Arbitron and he'll become a PPM panelist?

Harker Research posts update to Nielsen vs Arbitron Survey

Harker Research just posted an update to their article of December 5th on a survey that they conducted of media buyers, researching buyers' reaction to Nielsen's entry into measuring radio. In a very thoughtful exposition of their original conclusions, the researchers bring more clarity to their conclusions. They also posted a brief description of the methodology used in their research:

Nielsen versus Arbitron: Why It Matters to Radio: "How the study was conducted

Our clients provided the contact information for nearly 100 key radio media buyers. The media buyers were those who regularly buy radio, so the views expressed were from the perspective of the radio time buying community, and presumably would favor Arbitron. By telephone Harker Research interviewers contacted as many of these buyers as possible during the week of December 1st. We ultimately completed interviews with 62. This is a significant proportion of the universe of media buyers, so the results are a reliable representation of the views of all radio oriented media buyers.

We first confirmed that the participant bought radio time and then proceeded to ask the four questions. For each comparison question they could choose either Arbitron or Nielsen as a response, but we also accepted 'don’t know' or 'both.' That is why the two responses do not add to 100%.
"

(Via Radio InSights.)

One point made in their article was that there hadn't been much made of cross-media measurement with PPM. Here's the quote:

"While Arbitron has touted PPM as a means to measure any audio based medium, there has been very little said by the company about actually measuring any medium other than radio (except in special commissioned projects). This is one area where Nielsen is clearly ahead of Arbitron. If Nielsen follows through with its promises, small markets may have a new tool to compete against other media. Let’s hope that Arbitron responds by providing the same information (at no charge) in larger markets."

Arbitron actually conducted some very in-depth research into the multi-media aspects of PPM, with live data being made available during both the Houston and Philadelphia test periods. In fact, the MRC accredited the data in Houston just over a year ago. Here's a link to the RBR article about that: Arbitron gets MRC Blessing for PPM TV data

The competition between Arbitron and Nielsen will only make both services get better - and that bodes well for both sellers an buyers of tv and radio advertising.