Arbitron and Nielsen in Trouble

Forbes reports that broadcasters are displeased with Arbitron's falling response rate as people filter out unsolicited calls and telemarketers. Arbitron still relies on a diary system, filled out by hand by members of the public, who are paid $2 a week for the pleasure. And they wonder why the response rate is falling?

    radio broadcasters are furious with Arbitron, the New York City-based radio ratings service whose research determines the fate of much of the $20 billion that is spent on radio advertising.

    After randomly selecting thousands of households in a radio market and sending written notification, Arbitron (nyse: ARB - news - people ), then calls each house to get consent before sending out diaries for each person over the age of 12. Presuming they agree, the diary keepers spend a week recording the radio stations they listen to and at what times.

    But fewer and fewer people are picking up the phone when Arbitron calls. That, in turn, means fewer diaries are filled out. Since peaking at 42.7% in 1995, response rates have fallen to 34.5% as of last fall. With fewer diaries backing up the ratings, the radio broadcasters who live or die on the ratings are wondering how good they are in the first place.

    ....Arbitron acknowledges that the response rates are a problem and that it's working on several possible solutions. Among them, "promised incentive," which is research-speak for paying folks more money once they complete their diaries instead of at the beginning. As it is, the money is already pretty chintzy: $2 per person, in crisp one dollar bills, with the unpaid promise that you're helping to program radio stations in your area. The new back-end incentive pays $10, but not until you finish the diary and send it in.

    Continued on the next page Page 1 — Page 2

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