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Nielsen Signs Off on Radio Ratings

Posted in News on January 5, 2011

Just two years after taking on rival Arbitron in the radio-ratings market, in early December the Nielsen Company announced it would discontinue its domestic “sticker diary” radio-measurement service, effective immediately.

The decision, said Nielsen in a brief statement, would not impact the company’s international radio-ratings offering in the 11 non-U.S. countries it currently serves. Additionally, back data and limited access to the company’s Radio Advisor software will continue to be available for use by Nielsen clients, as required.

Nielsen began offering its diary-based service — which utilized stickers bearing the names of radio stations that listeners regularly tuned in to — in late 2008 in response to proposals from Cumulus Radio for a new, small-market radio-measurement service. In addition to Cumulus, other Nielsen clients included Clear Channel, Maverick Media, ESPN Radio and Black Crow.

It is unclear whether Cumulus will immediately fill the void left by Nielsen in its smaller markets through similar diary-service ratings data provided by Arbitron. While acknowledging that audience research plays a key role in the effort to streamline data gathering and boost shareholder value, in an interview with Radio Business Report Lew Dickey, CEO of Cumulus Media, said that Cumulus will “re-allocate these resources to better serve our sales organization and our clients … and this may or may not include syndicated audience research.” On Nielsen’s decision to exit radio ratings, Dickey speculated that, despite having a strong product, “they are a very large company and their strategic priorities have evolved.”

Clear Victor Earlier in the month, Arbitron announced that it had inked a six-year ratings-service contract extension with chief client Clear Channel Radio worth an estimated $540 million. Concurrently, Arbitron increased its 2011 revenue guidance by 6 to 8 percent over current-year levels. As of last year, Clear Channel accounted for approximately 19 percent of Arbitron’s total revenues. Arbitron’s main data-gathering tool is its Portable People Meter (PPM), a mobile device that registers consumers’ exposure to media and entertainment using an inaudible code embedded in terrestrial, satellite and online radio content. PPM, along with diary ratings, have been “an integral part of the radio buy-sell process for both terrestrial and digital outlets,” said Arbitron president and CEO Bill Kerr.

Though Nielsen declined to elaborate on its decision to exit the U.S. radio-ratings business, the news came just days after the Arbitron-Clear Channel deal was announced — hardly a coincidence, suggested some media observers. “For a company the size of Nielsen, it just made no sense to handle only 51 markets,” commented RBR. “It looks like someone at HQ made the call that competing head-to-head with Arbitron was not going to be worth the investment — and pulled the plug.”

While Nielsen’s departure gives Arbitron extra breathing room, the company’s PPM data-gathering technique remains the subject of controversy, particularly among minority broadcast groups who charge that the system often undercounts urban listeners. A year ago, former Arbitron CEO Michael Skarzynski promptly resigned after providing false testimony about the effectiveness of the PPM system during a Congressional hearing.