| Type | Public |
|---|---|
| Traded as | NYSE: ARB |
| Industry | Media market (research) |
| Founded | Washington, D.C. (1949) |
| Headquarters | Columbia, Maryland |
| Area served | United States |
| Key people | Bill Kerr CEO |
| Products | ratings data |
| Revenue | US$395M (FY 2010)[1] |
| Operating income | US$65.7M (FY 2010)[1] |
| Net income | US$44.4M (FY 2010)[1] |
| Total assets | US$229M (FY 2010)[2] |
| Total equity | US$77.6M (FY 2010)[2] |
| Employees | 1,300 |
| Website | www.arbitron.com |
Arbitron is a consumer research company in the United States that collects listener data on radio audiences. It was founded as American Research Bureau (ARB) by Jim Seiler in 1949 and became national by merging with L.A. based Coffin, Cooper and Clay in the early 1950s. The company's initial business was the collection of broadcast television ratings.
The company changed its name to Arbitron in the mid 1960s, the namesake of the Arbitron System - a centralized statistical computer with leased lines to viewers' homes to monitor their activity. Deployed in New York, it gave instant ratings data on what people were watching. A reporting board would light up to indicate what home was listening to what broadcast.
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Arbitron's syndicated radio ratings service collects data by selecting a random sample of a population throughout the U.S., primarily in 294 metropolitan areas, using a paper diary service two to four times a year and Portable People Meter (PPM) electronic audience measurement service 365 days a year.
The term commonly used in the radio industry for these ratings is Arbitron book, a carryover from the era when ratings were published in a soft-cover report that was mailed to clients. More specifically, in the diary-measured markets these reports were called the Spring book, Summer book, Fall book, and Winter book. Between these "books," Arbitron releases interim monthly reports called Arbitrends, which contain data from the previous three months known as "rolling average" reports. The two interim reports would be known, for example, as "Spring, Phase I" and "Spring Phase II.
Arbitron recruits diary survey respondents to note their listening habits in a seven-day paper diary and mail it back to Arbitron. The respondents are paid a small cash incentive for their participation. Turnaround time for release of data from the end of the survey period is approximately three weeks.
After collection, the data is marketed to radio broadcasters, radio networks, cable companies, advertisers, advertising agencies, out-of-home advertising companies and the online radio industry.[3] Major ratings products include cume (the cumulative number of unique listeners over a period), average quarter hour (AQH Share - the average number of people listening in a given 15-minute period), time spent listening, (TSL), and market breakdowns by age, gender and race/ethnic demographic. It is important to understand that the "cume" only counts a listener once, whereas the AQH is a product of "cume" and time spent listening. For example, if you looked into a room and saw Fred and Jane, then 15 minutes later saw Fred with Sara. The "cume" would be 3 (Fred, Jane, Sara) and the AQH would be 2 (an average of two people in the room in a given 15 minute period).
Responding to requests from its customers — radio broadcasters, ad agencies and advertisers — that expressed their interest in the collection of more accurate ratings data, Arbitron introduced the Portable People Meter (PPM) service in 2007.
The PPM is a wearable portable device much like a pager or cell phone, that electronically gathers inaudible codes that identify the source of a broadcast, such as a radio station. Arbitron recruits and compensates a cross section of consumers to wear the meter for an average of one year and up to two years. The audience estimates generated from each monthly survey is used as the buy/sell currency for radio stations and advertisers/agencies.
As of December 2009, the PPM is currently measured in thirty-three markets including: Houston, Philadelphia, New York, Atlanta, Detroit, Long Island, Middlesex-Somerset-Union, Chicago, Los Angeles, Riverside-San Bernardino, San Francisco, Jacksonville, Baltimore, and San Jose. By 2010, 48 markets are being measured using the PPM. [4]