Cumulus Takes a Stand

Cumulus is not renewing its contract with Arbitron for its stations in markets 100 and below. As a result, Cumulus is calling for a request for proposals (RFP) for an Audience Measurement Solution for Small and Medium Sized Markets. The second largest broadcaster in the US is acknowledging that Arbitron isn't getting the job done and has decided it will lead the charge for change. In a report posted by AllAccess, Cumulus says "As the underwriter of this effort, we will take the leadership role in solution design and vendor selection." Apparently Clear Channel is supporting this move by Cumulus. How exactly, has not yet been reported. Arbitron has had what seems to be a monopoly on the radio ratings market since 1991 when it's major competitor, Birch Radio, ceased operations. Arbitron indirectly bought Birch Radio out, by contracting with Birch Radio's parent company VNU to market the Scarborough report. Since then, there have been small companies that have sprouted up in the radio ratings game, but none have been able to truly provide competition to Arbitron. One most notedly is Solutions Broadcast, which I think may benefit from this develoment.

Correct me if I am wrong here, but doesn't Arbitron provide it's "research" for free to advertising agencies? How is it that the radio industry got scammed into paying for this research? There is a conflict for Arbitron when stations (or groups) each make their own deal to buy the information. There must be a simple formula that Arbitron follows: whoever pays more, gets more listeners. So now there are disgruntled radio executives because they are paying a premium and not "winning" in every market! Even if Arbitron was completely transparent, it is still wrong that radio pay for research that the advertising agencies need to satisfy their client's request.

The best way for the radio industry to see a fair representation is for the ad agencies to pick up the tab for the research. They are the one's that actually use the information. Sure the argument may be that it is the radio stations that benefit. But who truly benefits in the end, is actually the advertisers. It is information that the ad agencies require in order to perform the task they have been paid to do by their clients, the advertisers. They place their ad dollars on the radio stations that have the largest segment of the demo they want, which in turn drives listeners to the advertisers. Radio is merely one conduit businesses use to drive traffic to their stores.

Let's look at a scenario that creates an inaccurate measurement of the market, which in turn hurts the advertiser. Under current Arbitron rules, if someone at a radio station shares the book with a non-subscriber, and Arbitron finds out, that station gets embargoed. Essentially they don't get counted in the next book (or even longer). How is that an accurate measurement of the market? How can an ad agency properly represent its clients (the advertisers) when the book is not truly representative of the market? I'm surprised the DOJ has not looked into how this game is played!

We have to ask, why are radio stations willing to spend millions of dollars for such flawed reporting? And, why is it okay to buy bad, miscalculated information, (and use it) while cutting back on staff just so you can pay for such garbage? Radio stations themselves should not be selling on "numbers", but on the product they deliver. If a radio station is going to use the Arbitron ratings system as a crutch to get business, the broken limb will not heal. And businesses should not be buying a station just because it has the "most" listeners, it should buy a station based on the fact that the radio station can provide a response based on the frequency (number of times) the ad placed will run! That's a whole different topic altogether.

While I do understand that my sole, and lonely opinion does not matter, I do applaud Cumulus for taking the first steps to find a better more affordable audience measurement system. However, I believe the industry as a whole would benefit more by dumping their Arbitron subscriptions, and hire back local talent with the money saved! Let the ad agencies take the responsibility to pay for the research and thus get an unbiased measurement of the market. If the agencies don't want to pay for the research, let them create real relationships with the radio stations directly to service the needs of the advertisers. Create better partnerships for longer term strategies and growth for everyone. Cut the real fat, put the meat back.