Nielsen buys Arbitron for $1 billion
posted at 1:12 pm on December 19, 2012 by Mary Katharine Ham
For the past several decades, Nielsen has measured TV ratings and Arbitron, radio. The ratings they produce dictate ad costs and whether programs get canceled. As technologies improved, both companies have switched from a system of paper diary-keeping to a combination of paper diaries and electronic devices. Radio ratings have always been harder to capture than TV ratings.
Nielsen can easily stick a device on a household’s TVs or remotes (they do both) to see what its owners are watching, but recording what a person hears on the radio requires they wear a device on them. The Portable People Meter, as it’s called, picks up ambient radio signals whether you’re in the mall or your car, but it has the downside of making you look like you’re wearing a beeper. They’re expensive, so Arbitron ended up with a rather small and unchanging sample for a lot of its radio ratings.
I wonder if the acquisition by Nielsen will allow them to put more PPPs in the field and improve monitoring of online streaming and the like. From the press release:
“U.S. consumers spend almost 2 hours a day with radio. It is and will continue to be a vibrant and important advertising medium,” said Nielsen Chief Executive Officer David Calhoun. “Arbitron will help Nielsen better solve for unmeasured areas of media consumption, including streaming audio and out-of-home. The high level of engagement with radio and TV among rapidly growing multicultural audiences makes this central to Nielsen’s priorities.”
With Arbitron assets, Nielsen intends to further expand its “Watch” segment’s audience measurement across screens and forms of listening. “These integrated, innovative capabilities will enable broader measurement of consumer media behavior in more markets around the world,” said Steve Hasker, Nielsen President of Global Media Products and Advertiser Solutions. “We will also bring local clients greater visibility to empower more precise advertising placement and campaign effectiveness.”
“Radio reaches more than 92 percent of all American teens and adults because they love to listen to music, talk, news and information while at home, at work and in their cars,” said William T. Kerr, President and Chief Executive Officer of Arbitron. “By combining Nielsen’s global capabilities and scale with Arbitron’s unique radio measurement and listening information, advertisers and media clients will have better insights into consumer behavior and the return on marketing investments.”
I’ve had an interest in how the ratings work since long before I got into radio and TV. I was a Nielsen family (yes, they exist!) for two years in the early 2000s, and I was drunk with power. When I was on the radio, I learned about the PPP. Frankly, it’s amazing how relatively sloppy ratings systems have always been given how much money and media they influence. As technology gets better and we start streaming and downloading almost everything in easily measurable chunks, the data will get better. And, given Big Data’s influence on this election, Nielsen’s improving data will be allowing candidates to connect your teen-vampire show addiction with the political messaging that works for you.
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