NIELSEN DECLINES JOINT VENTURE WITH
ARBITRON AND PPM
(Posting Date: March 2006)

Nielsen Media Research has said it will adopt a portfolio strategy to measure television and has decided not to enter into a joint venture with Arbitron to commercially deploy Arbitron's Portable People Meter (PPM) as the primary measurement tool for media ratings currency.

This decision will have no impact on Nielsen's plan to proceed with Project Apollo, the market research joint venture between Nielsen and Arbitron. Also, Nielsen suggested to Arbitron that they discuss Nielsen's potential licensing of the PPM to measure television viewing outside the home and Arbitron expressed interest in that suggestion.

Arbitron began developing its PPM technology in the early 1990's to measure audio signals from radio. In 2000, Nielsen Media Research and Arbitron signed an agreement under which Nielsen held an option to form a joint venture for the commercial deployment of PPMs, including their potential use for measuring television ratings. Since then, Nielsen has invested millions of dollars on research to determine the viability of the PPM system.

"We recognize the appeal of a portable, single source measurement tool," said Susan Whiting, President and CEO of Nielsen Media Research. "While it may offer considerable benefits for radio research, we believe that a one-size-fits-all measurement system is not the approach for a currency in today's complex television markets."

After more than five years of evaluating, testing and investing in the PPM system, in an environment of explosive change in TV technology and services, Nielsen reached the following opinions about the system:

1. Because the PPM's exposure-based definition of "audience" produced larger and still unexplained television viewership, Nielsen believes that the marketplace will require a clearer explanation for the differences.



2. In Nielsen's opinion, the PPM system would be more expensive than the methodologies it would replace, with the joint venture requiring the television industry to bear most of the costs and effectively subsidize radio. Nielsen believes that to improve sample quality to the level its clients have said is necessary for television currency, it will be necessary to further increase payments to sample participants and hire more field representatives to recruit households in person, none of which had been anticipated when the joint venture was first conceived.

Nielsen's decision not to proceed with Arbitron in the joint venture will not affect its collaboration with Arbitron on "Project Apollo," a national marketing research service which would collect multi-media and purchase information from a common sample of consumers.

Nielsen said that the quality threshold required for market research is very different from the thresholds demanded of a television "currency" service and that it believes the PPM offers potential for market research applications.

Arbitron Inc.'s president and chief executive officer, Steve Morris, said: "Although we saw some economic benefits to our customers from a joint venture, the termination of the May 2000 option now gives Arbitron complete flexibility to meet the needs of our customers in terms of when and at what speed we deploy the Portable People Meter as an audience ratings system in the United States."

We intend to work directly with the broadcast television and cable industry on additional, non-currency services that utilize the PPM," said Mr. Morris.

Arbitron will concentrate its efforts on previously announced plans to create a PPM ratings service for radio . To date, the company has announced signed contracts for a PPM-based radio ratings service with a number of agencies, advertisers and broadcasters.

"Now that we no longer have the obligations that came with the Nielsen option agreement, we are free to focus our resources on the best PPM ratings services possible for the U.S. radio industry ," said Mr. Morris. "Our goal is to secure a critical mass of stations and agencies to allow us to go forward rapidly with the deployment of the Portable People Meter system for radio audience measurement in the United States."

FIRST AUDIENCE DATA RELEASED FROM HOUSTON TRIAL
(Posting Date: September 2005)

Arbitron releases data monthly on the Houston PPM trial.

 Click here to see the PDF on the July and August surveys.

ARBITRON’S PPM PROVIDES OUT-OF-HOME
VIEWING STATS FOR THE SPACE SHUTTLE
(Posting Date: September 2005)

The recent launch and landing of the Discovery Shuttle provided Arbitron with the opportunity to demonstrate the value of the PPM for capturing a more complete expression of the total audience for a live television event.

On July 26, in the Houston television market, five broadcast stations and four cable news networks covered the launch of the Discovery (9:15 a.m. to 10:00 a.m.).  Fully 25% of the audience for the Discovery launch came from Out-of-Home viewing (118,300/474,000).  By comparison, for the other 53 broadcast and cable outlets measured by Arbitron, 12.8% of viewing came from the Out-of-Home audience.  Out-of-Home tuning to the shuttle launch accounted for 11.3% of the Total TV Audience (118,300/1,048,900); in the same time period the prior week, the Out-of-Home audience accounted for 7.2% of the total TV audience.

The shuttle landed on August 9, and while coverage of the landing occurred earlier in the morning (7:00 a.m. to 7:45 a.m.), the Out-of-Home audience was still significant.  Out-of-Home viewing accounted for 14.1% of the total audience for the shuttle landing, and 9.2% of the Total TV audience for that time period.

BACKGROUND ON THE PPM
(Posting Date: August 2005)

Introduction

Arbitron's Portable People Meter, or PPM, is a passive, electronic audience measurement system that can track what consumers watch on broadcast television, cable television and satellite TV, and what they listen to on the radio. The PPM detects audio codes that can be embedded in the audio portion of any transmission. Tests of the PPM technology date back to 1992; it has been tested in many countries and is in commercial use in 2005 in Canada , Belgium and Singapore.

The PPM system consists of several components:

• Encoder, which is installed at the programming or distribution source to insert an inaudible identification code into the audio stream;
• Station monitor, which is installed at the programming source to ensure audio content is encoded properly;
• Portable People Meter, which is worn by a consumer to detect and record the inaudible codes in the programming that the consumer is exposed to;
• Base station, where each survey participant places the meter at the end of the day to recharge the battery and to send collected codes to a household collection device known as a "hub";
• Portable recharger, which allows the PPM to store multiple days of media exposure data;
• Household hub, which collects the codes from all the base stations in the survey household and transmits them to Arbitron via the telephone during the overnight hours.

The PPM measures exposure to media, which differs from reported viewing, and it meters persons, not households. Since it is portable, the PPM captures and reports exposure regardless of location; because the inaudible codes remain with a program after it is recorded via a VCR, or a DVR, time-shifted viewing is captured as well. Respondent instructions are relatively easy: they must keep the meter with them while awake; the meter must stay in motion (breathing counts as motion, and is registered by the meter), and they must dock the meter at bedtime to recharge the battery and enable each day's data to be transmitted.

This gives agencies and advertisers new tools to evaluate their media mix, including a "direct" measurement of multimedia reach and frequency. The Portable Meter gives programmers new insight into how their medium fits into a consumer's lifestyle and is ideal for developing effective and efficient campaigns.

Houston Test 2005

Arbitron completed a year-long trial of the PPM in the Philadelphia market in 2003. Based on requests from the radio industry, Arbitron is now conducting further tests of the PPM in the Houston market. The goals of the Houston test are:

• Test the performance of new enhancements to the PPM technology, including new
  in-home and out-of-home tracking capabilities
• Demonstrate the effectiveness of new sampling and recruiting techniques
• Provide insights into how Hispanic and black persons participate in PPM media panels
• Demonstrate the benefits of panel research

As of June 2005, 93% of Houston media are encoding, including 16 of 16 broadcast television stations, 46 of 46 cable networks, and 43 of 51 radio stations (radio holdouts include Cox Radio and Radio One). In addition to the media outlets that are encoding, an estimated 300 retail and entertainment venues will also encode during the pilot test. Grocery stores, consumer electronic stores, home improvement centers, clothing stores, movie theatres and pro basketball and baseball venues are among the kinds of outlets that have agreed to participate. Some of the retailers identified as participants are The Gap, Best Buy, Gallery Furniture and Old Navy. These four retailers alone operate 50+ stores in Houston and will encode the audio that plays in their stores using unique PPM identification codes supplied by Arbitron. Regal Cinemas will encode a pre-feature program that airs on 46 movie screens in the Houston market.

Arbitron plans to have 2,100 persons 6+ and 780 households installed in its panel by July 2005; in comparison, the current Nielsen HUT meter panel contains approximately 400 households. Arbitron plans to release July PPM data for Houston in mid-September, and will release new data every month thereafter.

Arbitron’s Goal of MRC Accreditation

Arbitron also began the Media Rating Council (MRC) audit process for the PPM in March 2004. Four pre-audit reviews have been completed: software, technology testing, sample design, and the Philadelphia response rate test. According to Arbitron, audit fieldwork is now underway and its goal is to complete the MRC audit by December 2005.

E-mail Susan Cuccinello with any questions.