SQAD Launches Initiative to Ease Radio Station PPM Transition

Accurate daypart, demo CPP & CPM data critical in electronic-rating price setting

SQAD, Inc., the de facto standard in broadcast spot and network media cost-reporting and forecasting, today announced an expanded outreach program to provide radio station managers and sales directors with the market-specific Cost Per Point data needed to weather Arbitron’s paper-diary-to-PPM (Portable People Meter) ratings sea change.

“The major decision radio station executives must make when their market transitions from paper diaries to PPM is whether or not to adjust their advertising rates to reflect ratings increases or declines caused more by changes in methodology than audience preferences,” SQAD CEO Neil Klar said. “Our new education and training program is designed to show them how to obtain maximum benefits from SQAD’s transaction-based reporting and forecast data under Arbitron’s new model.

“Prior to PPM implementation, the vast majority of SQAD’s subscribers were advertising and media-buying agencies, which rely on our monthly reports — which include 26 demographics and seven dayparts covering the current quarter and forecasts for the next four quarters — to draw up budgets and negotiate contracts,” Klar noted. “Post PPM, however, many radio stations have discovered they need access to the same demographic and cost data as the agencies to effectively price their product.

“Realizing that SQAD is the best source for that information, they’ve been coming to us and asking how to best use our data to attain bargaining-table parity with buyers.”

Klar attributes much of this intensified “need to know” to a seeming paradox in the PPM transition data and the conversion process needed to rationalize it.

“Listener levels in the initial PPM cities are up, but station ratings are down,” he said. Smaller stations that almost never appeared in the paper diaries are now getting rated, and the total audience during various dayparts is considerably larger than previously reported.”

According to Initiative Media Executive Vice President and Director of Futures and Technology, Janice Finkel-Greene, SQAD’s Spot Radio data’s CPP and CPM estimates enable radio station executives to more accurately determine “where daypart and

demographic price points in their local market are right now, where their station is in relation to that market, and where they’d like it to be.

“After PPM a lot of stations are finding new value in timeslots, such as weekends, that they never paid much attention to, time slots where they may have been giving spots away,” Finkel-Greene said. “Not having any background or in-house experience in setting rates and budgeting for those segments can be a significant handicap in negotiating to sell them. Having SQAD’s current price-per-point data and forecasts will empower them to compete for these evolving opportunities more effectively.”

Katz Media Group Executive Vice President for Strategic Planning & Information Technology Services Gerry Boehme adds that many station executives will be “looking at SQAD and trending SQAD to determine if and how costs are changing in relation to rating-point adjustments in PPM.

“SQAD allows people to look at CPP and CPM trends within a market over time, and also compare those results with patterns in other markets. That should help determine how much the introduction of PPM affects pricing within a market,” he noted. “Considering how ratings produced by PPM differ from the prior levels produced by the diary, we can also get a sense of changes in spot-unit rates.

“For example, if the average rating for a spot is lower in PPM than diary, then we’d be looking for SQAD to show an equivalent gain in cost per point to indicate that the cost of the average spot has been maintained,” Boehme added.

“Basically Arbitron says that PPM is, in effect, a new measuring stick with unique values that can’t be compared directly to the old measurements without converting the apples and oranges into the same type of fruit,” Marketing Made Simple CEO and SQAD Marketing Consultant Christine Mueller stated. “They also say that the results advertisers get in terms of store traffic, units sold, and brand recognition will be the same regardless of the measurement system. Which is fine and reasonable, but extremely difficult for a radio station executive to sell to a client without accurate cost data to back it up.

“Perhaps the most important of the many things SQAD Spot Radio gives station managers in markets transitioning to PPM is incontrovertible evidence — evidence compiled from actual radio-buy contracts covering more than 40 percent of the local radio market — of the relationship between prices and the new ratings math.”

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For more information on employing SQAD Radio data to better understand and react to the dynamic changes in Arbitron’s radio-rating methodology, visit http://www.SQAD.com/products/spotRadio_PPM.jsp or contact a SQAD representative for additional training and interpretive materials.

About SQAD

Formed almost 30 years ago, SQAD is the industry’s foremost media-cost forecasting source for national TV (NetCosts – network TV, cable and syndication), spot TV, Hispanic spot TV, spot radio, and the Internet.

Working with actual buys extracted from confidential transactions electronically submitted by agencies and media buying services, SQAD uses proprietary models and algorithms to report current market movements and future price estimates based on information from 16 rolling quarters.

Serving over 1,500 clients, SQAD is privately held and headquartered in Tarrytown, NY.


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