Local cable operators might be due for a windfall in advertising sales if early data from Arbitron’s Portable People Meter trial continues to pan out.
The measurement company completed the first phase of its PPM trial in Wilmington, Del., part of the Philadelphia DMA, in late 2001, and initial results indicate that cable ratings doubled when measured by the PPM as opposed to the traditional data from Nielsen’s meter/diary methodology.
The trial took place during the May, July and October survey periods that Arbitron measured and were compared with the sweeps periods quantified by Nielsen diaries and meters during the same time, said Kevin Smith, senior vice president, cable services and PPM development.
The PPM is a device that is carried like a pager to measure radio and TV listening and viewing throughout the day. The device is totally passive, meaning the wearer does not have to press any buttons to record usage; the system does it automatically.
Participating broadcasters, cable networks and radio stations encode an inaudible tone in their programs that is picked up by the PPM. In addition to the expected surge in cable viewing, Arbitron learned that consumers carried the pager an average of 15 hours per day, said Thom Mocarksy, vice president, communications. Arbitron also reported an increase in younger demographics, which it expected since that group is less apt to record all of its TV usage in a diary. Broadcast stations saw an incremental increase in ratings since out-of-home viewing is recorded by the people meter.
Typically, cable viewing is underreported in diaries. It can be more accurately gauged by meters, says Arbitron. With more precise measurements, the meters can reduce the problem of “zero sell,” which refers to a program for which no demographic data is available. Many cable programs are zero sell because they have lower ratings or aren’t highly promoted and diary users are more likely to forget having watched such a show when they record their viewing habits in the diary.
“[The PPM] may not eliminate zero sell, but it makes a great effort at filling in a lot more sells and validating that some of these networks have more demographics than before,” Mr. Smith said.
The more precise information supplied by Arbitron’s PPM will be a mammoth improvement over the information that agencies are used to, said Laura Silton, director of strategy and resources for LCI, a division of Universal McCann. “We are used to genuinely rotten research in spot. Even though the PPM isn’t perfect, it’s 100 times better than what I’m used to dealing with [from the diaries],” she said.
She added that even though the data indicates that aggregate cable viewing doubled, advertisers will still want to evaluate the ratings of each individual network and program.
Mr. Smith believes that the larger sample size from phase two this year will yield more accurate results and provide demographic data for even the lowest-rated shows. “I think you will have many more rated programs and dayparts that the marketers can take to advertisers or [use] for their own promotions,” he said.
If the PPM succeeds on a wide scale, cable ad revenue in local markets will rise, said Jon Sims, vice president of research for the Cabletelevision Advertising Bureau. “We always knew when you went to a better measurement there would be a huge jump for cable. Diaries don’t work,” he said.
According to CAB, diaries understate cable viewing by about 40 percent. Still, the diary/meter combination is entrenched, he said.
Last year’s panel consisted of about 250 users in the area. Arbitron has begun recruiting participants for the second phase, for which it has a goal of 1,500 users by the second quarter of 2002, Mr. Smith said. When the sample expands, Arbitron will begin to release overall tuning and listening data. Subsequent releases will include specific information on shows, stations, cable networks and dayparts for the first time. The number of participating media outlets should grow in the second phase of the trial-from 22 to 32 cable networks, from eight to nine TV stations and from 38 to 45 radio stations.
Arbitron has not released specific costs for the trial, nor has it projected costs per market. At the moment, there is no cost to encode.