New Audience Measurement System? What about the PPM?

Recently the Wall Street Journal featured an up and coming media measurement technology created by research firm, Integrated Media Measurement Inc. (IMMI). Using cell phone based data collection, IMMI’s digital monitoring system measures audience exposure to multiple media platforms via codes embedded in the audible audio portion of the advertisement, including ads appearing in out-of-home TV, on-demand and time-shift viewing, radio, Internet, DVDs, audio CDs, theatrical films, entertainment venues, and mobile video and games. Upon review of the article, I immediately asked myself, “What does this mean for Arbitron’s Portable People Meter (PPM)?” and “Do these two services compete for the same market?”

For over 50 years, Arbitron has enjoyed a monopoly on audience measurement for the radio industry. However, with the advent of digital media, the advertising industry has been trying to figure out how to measure audience exposure to advertisements across multiple media platforms. To date, no such all-encompassing audience metric system exists. Arbitron’s PPM is a similar technology to IMMI’s new integrated media measurement system. The PPM is a pager-like device that consumers wear. The device detects inaudible codes embedded in the audio portion of the signal. Arbitron says the PPM can measure audience exposure to programs on radio, television, Internet streams, in-store music, and audio from entertainment venues. To date, the PPM only measures traditional radio listenership.

Arbitron first commercialized the PPM ratings in the Philadelphia market in March 2007. Currently, the PPM is being used in ten markets. IMMI’s media measurement system is currently measuring ad exposure in six markets.

While the PPM enjoys first-to-market status, Arbitron has faced many setbacks. For example, after the release of PPM ratings in Philadelphia, minority radio broadcast owners claimed the new measurement system under-samples minority radio listeners, in particular, African-Americans and Latinos. This delayed the PPM roll-out for subsequent markets. In addition, the NY State Attorney General is suing Arbitron, claiming false advertising and deceptive business practices. And the NY City Council is requesting an FCC investigation of the PPM because of the potential negative effects on diversity in media. Most importantly, the PPM to date has not delivered its promise of measuring media across multiple platforms.

Upon in-depth consideration of my initial questions “What does this mean for Arbitron’s PPM?” and “Do these two services compete for the same market?,” I must further explore the following questions:

Is IMMI’s new media measurement system poised to capitalize on the setbacks of the PPM?
Possibly. And here’s why:
1. Until Arbitron solves its existing problems, it’s unlikely the PPM will be used across all media platforms within the foreseeable future, as originally promised.
2. Currently, major broadcast networks - NBC Universal, ABC, and ESPN - as well as, media agency, Zenith Media support IMMI. IMMI has also formed a strategic partnership with Nielsen Media Research measuring out-of-home TV viewing.
3. IMMI provides an attractive incentive to its panelists- $50 a month or a free cell phone (which also serves as its data collection method). The PPM sample is offered “points” although it is unclear what the “points” are.
4. IMMI system does not require the panel to remember to wear the meter device instead the data is recorded via the panelists cell phone therefore solving the problem of under sampling errors faced by the PPM because who leaves home without their cell phone?

Does it matter that IMMI measures exposure to advertisements and the PPM measures programs?
Yes. IMMI’s new system measures ad exposure and links this information to consumer action. The PPM is unable to provide this level of audience engagement. As new digital technologies provide new opportunities for the consumer, advertisers are somewhat confused. Advertisers want to know if their ads are effective and the only way to know that is to know who’s listening to or watching a commercial.

Does it matter that IMMI collects data from the audible portion of the audio versus PPM’s inaudible portion of audio?
In order for the PPM to track media exposure, the programmer or distribution source (broadcaster, Internet station, advertiser) must encode its signal/program. IMMI technology requires no input from the broadcaster, distribution source, or advertiser because IMMI’s embedded cell phone software records the audio and codes it into digital signatures for further analysis. IMMI’s passive digital monitoring requires no input from the advertiser or content distributor.

So, I’ve come to realize that the two services are different yet have many similarities. It is doubtful that IMMI will become an industry standard for measuring audience exposure to advertisements due in large part because of the long-standing relationship Arbitron (and Nielsen) has with the media industry. Arbitron has also invested millions of dollars in the development of the PPM (of course at the expense of its clients) and is unlikely to go down without a fight. Until the PPM measures media across multiple platforms as it is was designed to do then strategic opportunities will be created for companies like IMMI. It is clear that if IMMI helps their clients make sense of media exposure and audience engagement in the digital age, while providing reliable audience data, then IMMI will serve as an essential research resource for major media companies and therefore weakening Arbitron's position in the market of measuring digital media.