Issue 43
October 2005

Invasion of the
Portable People Meters

Revolutionary Media Ratings System Coming Soon

A device the size of a pager is making seismic waves across the advertising industry, and has the potential to dramatically change the way we measure all media. Coined the Portable People Meter (PPM), it could very well define a whole new approach to media ratings and tracking consumer behaviors.

PPM Basics
Although new to the U.S. market, Portable People Meters are already in commercial use in Canada, Belgium and Singapore. Arbitron, best known as the industry arbiter of radio station ratings, is leading the charge in this country with its own patented version.

The PPM is a small passive device that measures a person’s exposure to encoded audio broadcast signals. It is designed to be worn by people as they go about their daily lives being exposed to various programming and advertising messages, and then ported overnight in a transmitter where its data is uploaded to a central computerized repository for analysis.

Originally conceived for tracking radio and television broadcasts, the device is now capable of measuring virtually any digital media containing audio tracks, whether delivered via traditional broadcast outlets, out-of-home media or the Internet (it recently became podcasting-enabled, for example). It even measures “time-shifted” viewing and listening done with digital video recorders (DVRs) and digital audio recorders (DARs), enabling marketers to track evolving media habits in today’s TiVo and iPod-driven world.

Dear Arbitron Diary
The PPM is being tested as the replacement for Arbitron’s long-standing — and sometimes controversial — paper-based radio ratings measurement system, derived from the written diaries of participants in which they document their station listening habits over a three-month period.

Already the PPM method of measurement is proving to generate some very different results when compared to the standard ratings methodology. For example, an early PPM pilot in Philadelphia uncovered significant differences between what radio station listeners recorded in their diaries versus what was detected by the PPMs they wore, revealing that the participants were exposed to twice as many stations as they confessed to in their diaries.

The PPM Impact
Earlier this summer Forrester Research released the results of a study on PPMs and their anticipated economic impact in the radio industry. Both advertisers and agencies were included in the study, which was commissioned by The Radio Advertising Bureau. It found that not only is there frustration with the current ratings system, but that the radio industry could stand to gain $414 million more in revenue a year — a three percent increase — if PPMs replace the paper diary method.

Conversely, if the paper diary method were to continue, then annual revenue would likely decrease by $282 million, indicating that the current way of measuring radio ratings won’t necessarily be missed and is ready for replacement.

Radio Today, The Rest Tomorrow
Beyond radio, though, PPMs hold the potential to knock out the gold standard of television ratings — Nielsen — a feat that would certainly send shockwaves through the television industry, given that virtually the entire $60 billion TV advertising cost structure is predicated on the Nielsen rating model.

Arbitron’s PPM developers don’t plan to stop there, however. They are experimenting with global positioning system capabilities that would determine when someone wearing a PPM drives by a billboard or walks by a store. And if that weren’t enough, they are also attempting to incorporate radio frequency identification (RFID) into the mix, which would allow a PPM to track someone’s interaction with a printed item — a magazine, a newspaper, even a brochure.

And at that point, the invasion of the Portable People Meters will pretty much be complete, leaving no advertising medium untouched by its tracking receptors.

“Houston, We Have Lift-off”
As of this printing, there are 2,100 Houstonians moving around the greater Houston area with PPMs on their belts and in their purses, as participants in Arbitron’s second field study and largest pilot to date. In preparation for the program, the company convinced all of Houston’s 16 television stations, cable networks and most of the radio outlets to cooperate (the exceptions: Cox Radio and Radio One) along with retailers Kroger, Best Buy, Gap, and Old Navy, each of which have embedded audio signals in their in-store broadcasting systems.

The first round of Houston PPM field data has just been released, with updates on the program to continue through the winter of 2006. To learn more about the Houston program and its early results, visit www.arbitron.com.

Keeping the Hype in Check

PPM's are just one of the latest technological innovations being hyped at the moment. To put it all in perspective, Gartner recently released its 2005 Hype Cycle for Emerging Technologies, designed to help determine which trends and developments are currently worth learning more about and/or adopting, and which are not yet ripe for consideration.

Here are a few of those emerging technologies you should be paying close attention to now:

Podcasting — Gartner predicts that podcasting (radio and other digital programs delivered to your PC or iPod) will soon cause a massive shift in radio — and ultimately TV — content delivery.

Peer-to-Peer Voice Over IP (VoIP) — Although P2P VoIP applications are still under development, they hold the potential in the near future to enhance workgroup collaboration, multimedia applications, and low-cost communications.

Really Simple Syndication (RSS) — This recent web innovation is simple to implement and integrate into established software applications, making it ready for prime time.

Corporate Blogging — Gartner predicts that this form of blogging is ready for rollout by mainstream firms as a means of projecting marketing messages, tracking competitive intelligence, delivering customer support and recruiting employees.

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