Copyright 2004 The Washington Post
The Washington Post
April 29, 2004 Thursday
Final Edition
SECTION: Howard Extra; T14
LENGTH: 1540 words
HEADLINE: Arbitron's Hope for Better Ratings; Pager-Like Device Would Replace Listener 'Diaries'
BYLINE: Richard Sine, Special to The Washington Post
BODY:
"I know that half the money I spend on advertising is wasted. The problem is, I don't know which half."
The saying, one of the most famous in the advertising industry, is usually attributed to a British soap magnate who died in 1925. But it likely still applies today.
Advertisers have proved to be relentlessly innovative in getting their message in front of the modern consumer, whether it's on the road, on the phone or on the Internet. But technologies for audience measurement are stuck in the 1950s, giving advertisers little clue whether their billions are well spent or wasted.
Arbitron, the radio ratings leader, is hoping to change all that with new technology in development at its Columbia research labs. The company hopes its Portable People Meter will greatly increase the reliability of television and radio ratings. The meter someday could even track purchases, answering the ultimate question for marketers: Does an ad really prompt someone to make a purchase?
"Billions of dollars are transacted around ratings," said Thom Mocarsky, vice president of communications for Arbitron. "People know the strengths and weaknesses [of current ratings methods]. We're preparing to change the paradigm completely."
Since 1992, Arbitron has poured more than $20 million into developing the meter. Still, the meter will not be released commercially in the United States for at least two more years, Mocarsky said. The decade-plus lead time suggests not only the challenges in getting the technology right, but also in getting advertisers, broadcasters and even a former competitor on board with the new method.
Arbitron, which reported $273 million in revenue in 2003, is headquartered in New York, but nearly half of its 1,700 full- and part-time workers worldwide are at the company's three-building Columbia campus on Patuxent Woods Drive, just off Route 32.
The meter is a pager-like device designed to be worn throughout the day. It records electronic messages that can be embedded in any audio signal but that are imperceptible to the human ear.
The embedded message can include the name of a broadcaster, the name of a show or an advertisement, the time of day or other information. At night the wearer puts the pager into a holster, which then transmits that day's information to Arbitron over a phone line. The technology, developed by Arbitron and defense contractor Martin Marietta, now part of Lockheed Martin Co., stems from submarine warfare research. The embedded message is inaudible because it is just slightly quieter than the tones of the broadcast and is of nearly the same frequency.
Currently, Arbitron collects audience information through logs, or "diaries," filled out by a random sampling of people in each broadcast market. Arbitron's TV counterpart, Nielsen Media Research, uses a combination of diaries and television set-top monitors. Both technologies date to the 1950s.
Research has shown the diaries to be unreliable because many survey respondents, particularly young people, are too forgetful, busy or even embarrassed to faithfully document everything they watch or hear. The meters, however, don't require the wearer to take any action to record what is being seen or heard.
"People are less interested in filling out surveys," said Ed Cohen, who directs survey research at Arbitron's Columbia offices.
The challenge of tracking media consumption has increased with the explosion of the number of media devices people use, experts say. A typical household has several TVs, radios and phones, not to mention a videocassette recorder, personal digital assistant, digital video recorder and newspaper and magazine subscriptions. People will see or hear ads on most or all of them.
It's impractical to try to attach a monitor to every device, Mocarsky said. Arbitron engineers in the early 1990s realized they needed a technology that could follow the consumer.
Unlike Nielsen's set-top boxes, the pagers will record programs that are watched or heard outside the home, Arbitron says. They will also accurately identify the origin of recorded programs, increasingly important with the rise of digital video recorders such as TiVo.
If the meter delivers on its promises, it will allow advertisers to target consumers as never before, some ad executives say. That's because Arbitron will be able to make connections between TV and radio audiences, discovering, for example, if country-music radio listeners are more likely to watch CNN or ESPN. Advertisers can use this information to broaden their reach or increase the frequency of their messages while minimizing costs.
"Depending on what we want to accomplish, it will provide a better insight on how to use the media," said Pat Wallwork, media director of the Albuquerque ad firm McKee Wallwork Henderson. "It's an exciting technology."
The more detailed audience profile will increasingly be useful as marketers place ads in a wider variety of media in a single ad campaign. With each medium getting a smaller share of audience attention, advertisers are more inclined to try a variety of strategies to get the message out.
"It's important [to find better measurements] because the media landscape is so fragmented," said Robyn Schroeder, spokeswoman for Procter & Gamble, which spent more than $4.3 billion in marketing last year. "There's no marketing or media metrics that have been able to keep pace with us and the marketing innovations we've been making."
Even if Arbitron perfects the technology behind the Portable People Meters, there's no guarantee they will become the new standard in ratings measurement. That will require the cooperation of broadcasters, who would have to install equipment provided by Arbitron that embeds the code that the pagers read. Likewise, broadcasters and advertising agencies that buy Arbitron's ratings must be convinced that the system is reliable -- and worth the extra anticipated cost -- since they use the ratings to determine advertising rates.
That is proving an uphill battle. Cox Radio Inc., the nation's third largest chain of radio stations, has bowed out of a test marketing planned for Houston later this year. Cox Radio Chief Executive Robert F. Neil called the meter technology "outdated" in an age of wireless and Internet technologies. He questioned whether people would faithfully wear the meters and whether the devices would catch certain kinds of radio listening, such as listening on headsets.
Neil also complains that the meter would be more expensive for Arbitron subscribers: "We're not going to pay double for research that's worse than it is now," he said.
Mocarsky acknowledged the meters will cost more than the diary system, but how much more will depend on how they are deployed.
Another hurdle lies in convincing Nielsen of the viability of the meters. Nielsen helped fund the meters' development with the thought that they could be used to measure television as well as radio. In 2000 the two companies entered into an agreement allowing Nielsen to join Arbitron in deploying the technology in the United States.
But Nielsen has not taken up the option. Meanwhile, Nielsen is plowing ahead with plans to improve the technology of the set-top boxes it uses in local television markets. Although Arbitron executives say they could deploy the meters without Nielsen's help, some observers are skeptical that would be economically feasible.
"They have to convince Nielsen it's a technology that's worth moving forward," said James Webster, a Northwestern University ratings expert who has been an industry consultant. "My sense is the economics of this will make it hard to put out in the field if the only thing it's doing is measuring radio listening."
Another potential hurdle is that broadcasters might get upset if the new ratings show their share decreasing, even if the new ratings are more accurate. Test marketing of Nielsen's new set-top boxes in New York showed ratings declined for some minority-oriented programs. A coalition of broadcasters, led by Rupert Murdoch's News Corp., and some minority groups, campaigned against the company's latest set-top boxes, and Nielsen delayed the boxes' deployment.
"There can be political issues that are hard to predict," Webster said.
Yet another challenge facing Arbitron is that the meters only measure whether someone is exposed to a sound -- not if they are paying attention to it. Meanwhile, studies show an increasing trend toward people using several media devices at once, for example watching television while reading a magazine or surfing the Internet.
Nonetheless, Arbitron is pressing ahead with further applications for the meters. Codes could be embedded in movies or video games. Magazines or newspapers may be embedded with chips that the meter could detect. The meters could track purchasing behavior by "listening" to the Muzak played at stores or reading chips embedded in packages.
Ultimately, the goal is to target consumers with messages that would appeal to them personally, said Linda Dupree, a vice president of product development at Arbitron.
"It's closer to the integrated view that advertisers are seeking. We really want to help the consumer, get them the information they really want."
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