Re: Another Open Letter To Arbitron

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: : Open Letter To Arbitron : : Industry Confidence Concerns : : Here's a full text copy of the letter in case you can't open PDFs: : : June 20, 2008 : Mr. Steve Morris : Mr. Pierre Bouvard : Mr. Owen Charlebois : The Arbitron Company : 142 West 57 Street th : New York, NY 10019 : : Gentlemen, : : : On November 26 of last year you decided to delay commercialization of the PPM radio th : ratings service in nine markets. Steve Morris� comment at the time was �We remain : confident in the audience estimates that the Portable People Meter service is producing. : � : However, over the past three weeks, feedback from our customers, the Media Rating : Council and other constituencies has led us to conclude that the radio industry would be : better served if we were to delay further commercialization of the PPM in order to : address their issues.� : : Last week you announced the PPM currency rollout will resume as of the September : 2008 - along with a strategy of continuous improvement. As paying customers and those : who rely upon the credibility of the information to transact billions of dollars worth of : business we feel an obligation to provide you this industry confidence update. Speaking : as the vast majority of the industry our confidence in the system has not been fully : restored as of this writing. This letter provides detail on what is required for us to move : towards having the same confidence in the data that you expressed in November. : : We understand the need for and remain ardent supporters of having a high quality : elechicagomedia.orgonic ratings measurement tool for the radio industry. But, what Arbitron has : produced to date does not meet our expectations of a high quality measurement tool. : Therefore, we anticipate your expedient resolution of the items.outlined on the following : pages. : : : Clear Channel Radio Cox Radio Cumulus Media : : Inner City Broadcast Holdings Radio One Inc. Saga Communications Inc. : : : : 1. 18-54 sample size /sample size guarantee : : Status: : Your providing a �sample guarantee� at 80% of the markets sample target effective : with the third month of currency, backed by a financial rebate. There�s also a plan to : move some of the current 55+ sample into 18-54 � no hard date for implementation. : : Industry expectation: : 100% delivery of 18-54 target beginning with the first month of currency, including : the sample guarantee with a financial rebate. : : Justification: : 18-54 age cells are used for the vast majority of radio�s buy/sell transactions. We : expected to get 100% of the sample size when we bought PPM; as more markets roll- : out this issue will become even more critical in smaller markets since Arbitron�s : starting sample targets decrease. : : : 2. 18-34 sample sizes (All demos including ethnic) : : Status: : You�ve set benchmarks (not financially backed guarantees) for sample target : delivery. These include 70% in a market�s first year of measurement and 80% in year : two. Adults, Men and Women are covered � as well as Black and Hispanics in : markets where they exceed 10% of the population. �Other� 18-34 is also covered if : Black or Hispanic exceeds 10%. : : Industry expectation: : A much steeper improvement ramp; leading to 100% delivery in the form of sample : guarantees backed by financial rebates, not benchmarks. This would include all : demographic groups as described above. The following sample target guarantees : make more sense to the industry: : 6 months 80% : 1 year 85% : 18 months 90% : 2 years 100% : : Justification: : We expected full sample size delivery when we signed up for PPM � and had a right : to. Getting 80% of that number two years into the deal is unacceptable. Failure to : fully meet these targets makes it difficult, if not impossible to evaluate a stations : success or use the data to transact business. : : : 3. Childrens (age 6-11) measurement : : Status: : : Children 6-11 comprise approximately 10% of the meters in the PPM sample. We : have repeatedly requested these meters be re-allocated to persons over the age of 12. : Arbitron has been steadfast in its reluctance to do so citing �cost considerations, IT : issues, and interest from a number of customers in 6-11 year old data.� : : Industry expectation: : : All PPM markets that commercialize (ie first month of currency) after January 1, : 2009 will have panels that 1) consist only of Persons 12+ 2) are no smaller than the : currently scheduled sample target. In addition beginning January 1, 2009 6-11 year : old measurement will be phased out in existing PPM markets through panel turnover. : As households leave the panel in these markets they will be replaced by those that : provide meters only to persons 12+. : : Justification: : : When PPM sample size targets were calculated at approximately 33% of the markets : diary level, you converted a 12+ diary figure to a 6+ base in PPM � meaning we : didn�t get a full 33% conversion into 12+ PPM meters. Adding the 6-11 year old : meters back into a 12+ base will correct this, and expedite the building of 18-34 and : 18-54 sample sizes. Children 6-11 measurement is a remnant of your proposed joint : venture with Nielsen; the vast majority of the radio industry never asked for, never : wanted and still has no need for it. : : : : 4. MRC Accreditation for Radio First methodology prior to commercialization : : Current status: : : You�ve been consistent and resolute; no waiting for accreditation before making PPM : currency in all markets beyond Houston. We recognize this aligns with the MRC�s : Voluntary Code of Conduct. : : Industry expectation: : : Our expectation is that you will achieve MRC accreditation for the Radio First PPM : methodology on or before June 30, 2009. If accreditation is not received by the : deadline, the Houston �best practices� methodology will be installed in all markets : rolled out going forward. In addition, Arbitron will take the steps necessary to put the : current Houston methodology in all existing PPM markets at no additional cost to : all existing PPM subscribers. : : Justification: : : The industry is not asking for every market to gain accreditation prior to currency � : only that the Radio First PPM system gains accreditation ONE TIME before currency : implementation. Also, the diary and Houston PPM methodologies have accreditation; : all radio markets should be using an accredited product. This is a reasonable : expectation given the critical importance of the data to our underlying business and : the substantial increases in rates that accompanied the rollout of PPM. Finally, the : MRC code of conduct doesn�t require accreditation prior to currency, but does prefer : it - �The MRC prefers that a Participating Measurement Service seeking to replace : an accredited currency measurement product with a new currency measurement : product (both products provided by the same Participating Measurement Service) : uses best efforts to obtain accreditation of the new product prior to its : commercialization.� : : : : : cc: Ed Christian : Lew Dickey : John Hogan : Alfred Liggins : Bob Neil : Charles Warfield : :

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