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In Fall 2006, the Philadelphia radio metro completed its final diary measurement of radio listening. Arbitron’s Portable People Meters (PPM) became the new currency of measurement as of January-February 2007.

Since then, all of the Top 10 radio markets (the last being Boston in Fall 2008) ended their diary system in favor of PPM. By its projections, Arbitron will be measuring radio audience exclusively by PPM in all of the Top 50 markets by the end of 2010. Click here for a look at the rollout schedule.

PPM data has already been incorporated into Arbitron’s RADAR and Nationwide ratings services that measure radio listening on a national basis.

How accurate is this new system? I think it’s fair to give Arbitron credit for doing everything in its power to design the PPM system to yield a representative sample of audience habits – and then make the necessary changes when valid concerns were raised.

The first PPM survey released in New York made headlines as minority broadcasters saw their market share crumble, citing Arbitron’s failure to attain sufficient participation amongst listeners in the Black and Hispanic communities. It was hard to look at the new numbers and disagree. Arbitron has since taken steps to assure a truer sample size across all segments of the population.

But there was a disturbing trend that emerged in market after market that switched from diary to PPM. The average radio listener, formerly spending an average of roughly 20 hours per week with radio, was now only spending roughly 12 hours a week with the medium. Was it possible that this new technology “corrected” listening levels by reflecting a 40% drop in usage? Was this radio’s version of a Wall Street 2008?

Dig deeper and a couple of theories factor into the mix. Perhaps first and foremost is the effect of satellite radio. Sirius XM Radio finished 2008 with 19 million subscribers. And, to date, Sirius XM has elected not to transmit the signal that would enable Arbitron PPMs to recognize radio listenership to Sirius XM channels.

That means that 19 million adults who pay for the privilege of receiving Sirius XM radio are not having their time spent listening to satellite radio included in the overall industry measurement of audience. That means that roughly 8-9% of the Adults 18+ population are not having much (or possibly all) of their radio listenership captured by PPM devices and included in the overall time being spent listening to radio. It could further be argued that this segment of the population (which pays for a premium service) would be among the medium’s most heavy users.

Then, there’s the glitch of PPM devices capturing (and attributing) listening is unintended by the PPM wearer. On the pro side someone wearing a PPM who spends 20 minutes shopping in a retail store playing a radio station would now have that unintended time spent listening reported via PPM. And I’d argue that the PPM had done an excellent job of reporting valid listenership that would have otherwise gone unreported.

But then there’s the case of the PPM wearer sitting in a 50,000-seat baseball stadium where the guy in front of him is listening to the game on a portable radio. The PPM device could conceivably “hear” the encoded signal and report a three-hour listening event, when the actual PPM wearer didn’t hear a word of the actual radio broadcast.

No system will be perfect. But PPM does take the monumental challenge of tracking audience to this highly-mobile mass medium into the 21^st Century.

It’s already uncovered some interesting trends, such as debunking the myth that radio is primarily a “Morning Drive” medium. The new PPM system also now measures radio listenership for all persons aged 6+, expanding coverage to include the “Tweens” segment previously unmeasured in the diary system’s universe of Persons 12+.

And while some will be slow to embrace this new technology, PPM will be the industry standard by which advertisers and radio stations define their audience size and composition.

Read more at the Arbitron PPM Home Page.

The Arbitron Ratings Company is well on its way to transitioning audience measurement in America’s Top 50 radio markets from the diary system to Portable People Meters, commonly known as PPM.

Our agency was an early skeptic of the new system, as new flaws in the system and outcries from some broadcast groups called into question whether we, as an industry, were trading one troubled measurement system for another.

The former diary system relied on individuals, recruited by Arbitron, to track their daily listening habits by recording the times and stations to which they listened in a seven-day diary. Arbitron then collected and analyzed the data for each radio market, weighting the value of each diary to arrive at a market sample representative of the age, gender and racial mix of the actual marketplace.

The new PPM is a passive, electronic measurement system designed to automatically detect radio frequencies by picking up encoded audio signals. Panel participants wear a PPM device – about the size of a small cell phone - that automatically tracks consumer exposure to media and entertainment. Participants must wear their devices a specified number of hours each day to qualify for inclusion in the program.

In theory, PPM eliminates the human error factor inherent in the diary system.

Someone who listens to radio at work might have recorded listening to Radio Station X from 9 AM-5 PM, simply by writing down the radio station’s call letters and drawing a line from 9AM to 5 PM to signify eight hours of continuous listening.

That same office worker, wearing a PPM device, might have shown (during that same, hypothetical eight-hour period) five hours of listening to Station X, one hour tuned to Station Y, 15 minutes with Station Z and an hour and forty-five minutes with no radio listening.  Why the difference? Those eight diary hours of “listening” might have included time spent in meetings, telephone calls, bathroom breaks, the lunch hour and other times when the “listener” just wasn’t listening.

In this light, this new process to electronically capture exposure to radio signals gives a truer, more credible read on how a typical listener is exposed to radio.

But there are downsides to the technology. We’ll explore those in our next blog.