Sunday, March 11, 2007

Beat The Clock: Why the PPM is Good For Radio

As most of you know by now, Arbitron has rolled out its Portable People Meter in Houston and Philadelphia, and we should begin to see numbers soon that will be argued about by all. The technology is sound (literally), the system design is well thought out, and I think it will hold up to any technical objections raised. On the other hand, at least one critic has suggested that there is a difference between a person being in a room with a sound and actively listening to the sound. Certainly the PPM eliminates the errors inherent in relying on people to fill out diaries consistently and accurately, but it doesn't close the loop into a listeners' brain. However, broadcast advertising rates are currently based on the number of potential listeners comprising an audience, not impressions actually received. In that regard, the PPM changes nothing.

While the above discussion proceeds, let me suggest at least two ways that the PPM will benefit radio, and, ultimately, all broadcast media. The first is to help close the advertising order/payment cycle. Broadcast advertising is one of the last industries to embrace supply-chain automation technology, in part because it's so hard to build a closed-loop system. By getting radio stations used to encoding program material, one can imagine that, eventually, ads can be encoded and detected. This will drive better accuracy in delivery and clearance, and shorten the time to create affidavits, which in turn should shorten a station's receivables cycle. In addition, better schedule performance will reduce the number of make-goods a station has to carry on its balance sheet - this makes bean-counters happy, and potentially frees up cash for other uses.

While the PPM can ultimately make the business types happy, the Radio Refugee likes it because it can smash the Arbitron-induced dogma that holds quarter-hours sacred. This dogma, a logical outcome of gaming the Arbitron methodology, has resulted in every station in a market (yea, every station in the country, or at least the Arbitron MSAs) sticking to basically the same programming clock.

Arbitron's PPM has the potential to smash this clock. The FCC still requires its hourly ID, but other than that, programmers will be free to experiment with new (or perhaps old but forgotten) approaches to captivating audiences, knowing that their success is not dependent on what happens in the first five minutes of each quarter hour.

I don't expect every station to abandon its clock - there are valid programming reasons for predictability in certain formats, especially news/weather/traffic. But I fully expect that someone in a PPM market with a music-oriented format could find a way to take advantage of the PPM's always-on nature to give listeners more than the same old stop-set, ad pod shuffle we've come to take as gospel. Furthermore, adventurous programmers can being to take cues from their television brethren and experiment with ads that go beyond :30s and :60s (see for some of my specific proposals in this area).

In summary, Arbitron's PPM has that rare potential to be a true win-win, with side effects that offer long-term improvements to the general state of the broadcasting business and art.

End note: Many people mis-refer to the Portable People Meter as the Personal People Meter, and I can't hear that without thinking of Sheb Wooley...