Nielsen, capitalizing on radio frustrations with Arbitron, will introduce a syndicated service to measure 50 small and mid-sized radio markets ranked 100 and higher in Spring 2009.  Cumulus and Clear Channel have already signed up for the new service. The new service will be tested this December with full measurement in March/ April with data release in August 2009.

The new service will uses a sticker diary and offers an Internet based “EDiary” as an alternative to paper data collection.   The sticker diary, a regular paper diary with a list of stations printed on adhesive stickers, is used by Nielsen in other countries for radio measurement. “The panelist just peels off the sticker and puts it on the diary,” says Nielsen spokeperson Gary Holmes.  “This helps improve response rates.”

The EDiary will be offered as an online alternative to the paper diary in 2010 to make the task more appealing to younger demos. “We will be offering all respondents an EDiary, which is an online version of the pen and paper instrument” says Lorraine Hadfield, Nielsen’s Managing Director of International Audience Measurement who will head up the U.S. radio survey. “We know that certain demographics are more comfortable online and this will give respondents an option.” Hadfield, who previously managed Nielsen’s outdoor research operations and currently runs Nielsen’s global radio business, will have separate operational support for the new initiative.

Once Partners, Then Frenemies, now…?

Arbitron and Nielsen were PPM partners in a joint venture until 2006 when Nielsen pulled out of the venture after tests in Philadelphia and Houston. Although Nielsen cited research shortcomings as a justification for the breakup, they have since teamed up with IMMI as an alternative source for out-of-home TV viewing data, jilting Arbitron’s well tested and partially MRC approved active encoding technology for IMMI’s un-vetted passive smart-phone service. Nielsen and IMMI quietly suspended their business last week citing the weak economy.

It’s always been blood sport among radio clients to boast how much they hate Arbitron, and having Nielsen enter the arena is tantamount to turning a Radio Advertising Bureau conference into a reality show. “Any and all competition is a good thing,” says one top 25 markets operations manager. “Arbitron is telling us our rates may go up 50% with PPM in September 2009.  Nielsen will have instant credibility with the agencies, where a smaller firm might have taken years to be currency,” he says.

Nielsen says no further details are available at this time about the EDiary. Arbitron might be able to offer Nielsen a few pointers, having tested electronic diaries extensively and concluding that response rates were worse than with paper diaries. Arbitron subsequently pulled the plug on further testing.

Competition is good but it doesn’t always create better research. “It’s lunacy that the pioneers of metered measurement are claiming that a diary  — even if it is an electronic diary — is a better way to measure radio,” says one veteran TV and radio researcher. Although EDiaries might be less expensive, Arbitron’s PPM — adding on to Nielsen’s household and local people meter experience — proved that consumers can’t be trusted to accurately recall content to which they have been exposed. Although ethnic broadcasters are frustrated with the lower AQH numbers delivered by the PPM, they secretly must be pleased that electronic measurement shows higher cume audiences for urban stations. All of this implies that consumers are likely to use the diary to “vote” for their favorite stations — overstating average listening — while electronic measurement uncovers additional listeners the diary doesn’t report leading to higher unduplicated audiences.

Nielsen says the initiative is a challenge by Cumulus and Clear Channel to the “status quo to [create] new ways to measure this enduring medium.” A Nielsen email to software system providers and partners says

After extensive discussions and thorough internal consideration, we decided Nielsen could meet their needs by leveraging our international experience in radio measurement and integrating it with our broad background in measurement science. Indeed, given our expertise measuring radio globally, we already have significant systems, infrastructure and personnel in place to hit the ground running on this new service.

Cumulus, which signed a long term contract with Arbitron several years ago guaranteeing improvements in Arbitron’s small market diary service, sent out an RFP in April seeking alternative vendors after Arbitron decided to pay contract penalties instead of providing the promised improvements. Arbitron has been responding but it might be too late and too late to appease Cumulus.

At last July’s Arbitron Radio Advisory Council session, Arbitron President Steve Morris noted “rising client frustration with sample quality.” Arbitron Research VP Dr. Ed Cohen spoke to the council about efforts to improve young adult proportionality by improving participation of the 16 percent U.S. respondents who only have cell phone-only respondents, whom Cohen cited as a principal reason that young person representation has fallen over the past four years.

One Step Up — Two Steps Back?

There’s also a bit of irony in the Nielsen announcement. As part of the TV ratings’ monopoly’s A2/M2 initiative, they have committed to doing away with paper-based measurement using a “mailable meter” instead. So it’s a little weird that Nielsen is turning to a technology that does a poor job capturing TV viewing to measure radio listening. In the long run, this may even help Arbitron, letting them withdraw from low margin diary measurement markets to focus on more lucrative PPM and top 100 radio markets. Nielsen’s 50 market strategy includes markets ranked 104 through 206.

Radio executives welcome the competition while still being cautious about Nielsen’s retro-data collection technology.  “A one-time-a-year, two-month survey takes radio back to the 1960s and 1970s,” Arbitron former VP Bob Michaels told AllAccess. “During the ’60’s and ’70s, radio stations would ‘hype’ the one-month, once-a-year survey with crazy contesting and giveaways.” Radio Arbitrends and quarterly measurement lessened that impact when those tools were introduced in the early 1980’s.

There’s also concern that going less from Nielsen will be better than more from Arbitron. “Stations used to be in a book for 24 weeks — now you will only have eight weeks,” says Chuck DuCoty, COO of NRG Media and former chairman of Arbitron’s Radio Advisory Council. “Will this be acceptable to agencies? At a time when agencies are demanding more accountability, is this a positive step for the radio industry?”

Sources: Nielsen, RBR, MediaPost, Radio and Records, Arbitron, Cumulus, CabRadio blog, AllAccess