The Portable People Meter, another pocket- sized gadget, is about to change the broadcast radio industry forever.
Arbitron, the company that tallies listeners so broadcasters can set advertising rates, is moving away from paper diaries. Instead, Arbitron is paying listeners in a growing number of markets to carry Portable People Meters.
These high-tech gadgets, also known as PPMs, look like pagers and record what radio stations are playing in the background.
PPMs collect extremely accurate data. They're not like diaries, which usually contain a listener's best guess of what radio stations he heard, hour by hour, week after week.
Yet accuracy means stations that once were at the top of the heap in terms of popularity and advertising sales soon may find themselves near the bottom.
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That means Emmis, Clear Channel and other broadcasters will have to start selling their stations in a whole new way: They'll have to retrain advertisers to look at the "cume" rating, not the average-quarter-hour rating. They'll have to prove that radio still has listeners, even if the average-quarter-hour ratings aren't as high as they once were.
Will advertisers go for this, or will they look for cheaper rates?
No one really knows, but everyone has an opinion.
Dave Van Dyke, president and CEO of the radio market research firm Bridge Ratings, said he has talked to advertisers who say they plan to increase their budgets for radio once they have more accurate data from PPMs.
But he's skeptical.
"I think, because it's a significant change, the ad agencies will have an advantage. It's resetting the game," Van Dyke said.
Bonnie Surber, media director for the Indianapolis ad agency Roman Brand Group, doubts PPMs will make more companies want to advertise on radio. But those that already do will be able to make better buying decisions.
Overall, Surber said the shift in thinking won't be too difficult for advertisers. Many already see radio as a reach medium, despite how it's sold using Arbitron ratings. [ MORE ]
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