Will Nielsen’s Acquisition of Arbitron Benefit our Industry?

| December 20, 2012

By Fred Lundgren
KCAA Radio, Loma Linda, California
CEO

lundgrenfredLOMA LINDA, CA — The inaccuracy of Arbitron surveys have been a pet peeve of mine for many years.  So, when The Nielsen Company announced the purchase of Arbitron, I decided to celebrate the event with a little punditry.  Initially, the announcement made me think of this quote by Winston Churchill…

“The only recorded instance in history of a rat swimming towards a sinking ship.”

Since I’ve only been aboard metaphorical sinking ships, I’m in no position to verify or refute the Prime Minister’s assertion, however, the analogy somehow seems appropriate…but seriously folks, let’s hope Nielsen will change the heretofore exclusionary methodology of Arbitron.  Moreover, let’s hope Nielsen’s acquisition will lead to comprehensive listener surveys across all platforms, which will add value to our industry, rather than further draining resources from traditional media already stagnated by the economy and over consolidation.

The current Arbitron survey model reminds me of a mafia protection racket that funnels ad revenue through complacent ad agencies to the stations that can afford to pay them and to others who can’t afford NOT to pay them.  The media industry deserves better surveys than either Arbitron or Nielsen currently provide. It seems obvious that without reliable and defensible cross-platform surveys, the majority all terrestrial radio and TV stations could eventually go the way of local Savings and Loan banks.

In my opinion, Arbitron’s S.W.A.G.* approach to ratings has been more of a disservice than a service to the industry, because non-subscribing stations like KCAA are de-listed or worse, shown to have zero listeners.

I submit KCAA’s audience as exhibit (A): According to Arbitron, nobody listens to KCAA.  Are we to believe that KCAA has no listeners to any of 50+ locally produced weekly programs on subjects ranging from a Vegan lifestyle to Marijuana legalization?  According to Arbitron, no one listens to any broadcaster on KCAA, not even Roseanne Barr, Joyce Riley, Don Imus, Dave Ramsey, Alex Jones or Ed Schultz.

KCAA’s situation is no different than thousands of other radio stations across the nation. We are living proof that our technology and services have evolved much faster than Arbitron’s “arbitrary” survey models.  Curiously, this did not stop Nielsen from buying the company for 1.26 billion dollars at a stock price far above the market.  We can only surmise what Arbitron would be worth… if only it delivered accurate results.

So, what should a modern and fully comprehensive survey model include?  Any honest and legitimate survey should add the actual terrestrial AM, FM, satellite or TV and cable audience to the online audience which includes all audio and video streaming and podcasting audiences. Every listener or viewer must be counted!  Those numbers would be apportioned by conventional demographics and zip codes.  Finally, the system should be priced so affordably that every media company in America will stand in line to subscribe.

This is not impossible. Every automobile in America contains a computer with memory storage and ports. Almost all homes are wired for POTS and the number of cell phones in use in America exceeds the total population by several tens of millions. These are all potential opt in data mines.

Consider this idea. Nielsen could team up with thousands of companies across the country that would provide discount coupons to listeners and viewers in exchange for their time to fill out surveys. In turn, stations could air spots for these companies to pay for the coupons. This system can be expanded out to millions of listener and viewer surveys. There are so many ways to gather accurate and timely listener and viewer information these days that it boggles the mind.

Will Nielsen develop such a system?  Will Nielsen develop any system that can possibly justify the estimated 6 billion dollars that will flow into their coffers next year?  Will their services add more value to the media industry than they take in fees?

Six billion in projected annual revenue should give Nielsen enough resources to develop a fully comprehensive multi-platform survey system, but I won’t bet my license on it.

*S.W.A.G.- Scientific Wild Assed Guess

tbugkFred Lundgren is CEO of KCAA Radio in Loma Linda, California.  He can be phoned at 281 599 9800 or emailed at ceotwo@comcast.net

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Category: Opinions