Nielsen, which has until now only been involved in radio ratings overseas is entering the game in 2009 with some high profile partnerships. Both Cumulus Media and Clear Channel Communications have announced that they will begin using Nielsen in a number of small- to mid-sized markets.
Until now, Nielsen has been known primarily for delivering television ratings, although outside the U.S. they have been involved with measuring radio ratings for some time. This move will be putting the company into direct competition with Arbitron, who so far has had a hammerlock on the stateside market.
Both Cumulus and Clear Channel will continue to utilize Arbitron in their larger markets, at least for now.
David B. Wilkerson has a great piece on MarketWatch concerning this announcement, in which he explains Nielsen’s approach:
Nielsen’s radio service will use address-based sampling to recruit sample households, rather than listed phone numbers, which had been the usual method.
The advantage of address-based sampling is that it will cover the 34% of U.S. households not always covered by current sampling procedures, including homes where the residents only use a cell phone, or where landline numbers are unlisted.
The Nielsen radio-ratings system also includes a “significant investment” in oversampling, and other ways to improve response rates among hard-to-reach demographics, such as young listeners and minorities.
An “e-diary” option for 2010 designed to have more appeal to younger listeners that are more accustomed to participating in online surveys.
It will bear watching to see if this announcement exacerbates the decline of Arbitron stocks, which have been steadily slipping for awhile now. [Stock Chart Here] The debut of Nielsen’s new system signals a new area of competition for the embattled Arbitron, and with the reputation that Nielsen has built over the decades from their work with TV. I am willing to bet it becomes more and more of an issue for them as time passes.
This should be an interesting year coming up, especially once we reach the third quarter of 2009 when the Nielsen markets go live. Since advertising rates are based on the audience share reported by these rating systems, it is of paramount importance to the industry to be able to report accurate data. With a significant portion of advertisers wary due to the erratic and down trending nature of the current economy, being able to assure them that their message is being heard is key to bringing in that revenue.
I get the distinct feeling that as time goes by we shall see a growing clash between Arbitron and Nielsen as Nielsen grows it efforts stateside. According to Mr. Wilkerson’s article, Arbitron has already stated that they have several new measures in the works in addition to the Portable People Meter.