PPM Economic Impact Study.

The Radio Advertising Bureau (RAB) released The Economic Impact Study of the Portable People Meter (PPM) on the Radio Industry.

Presented this morning at a press conference in New York City, the study was commissioned by a special committee of the RAB-PPM Task Force and conducted by Forrester Research. The project was spearheaded by consultant David Pearlman, President, Pearlman Advisors, and was funded by Arbitron.

The research confirms that employment of the PPM will make a sizeable difference in Radio spending with the potential for substantial revenue growth. A fully deployed PPM platform could mean annual net Radio revenues that are $696 million higher than with the current diary method. Conversely, continued use of the existing diary method could mean a decline in Radio dollars.

“We talked to nearly 500 advertising decision makers who gave us a clear ratings roadmap as we hit a critical currency crossroad in Radio,“ said Pearlman. “One in four indicated that they would change their spending patterns with the implementation of a ratings system that is better and more reliable than the diary.”

The study also demonstrates that if the current PPM test results on daypart consumption continue with a drop in Morning Drive listening, there will be a shift in spending. “Revenues will chase ratings no matter what the time or marketplace,” Pearlman explained. “According to our sample, there would be a drop in Morning Drive spending, but the dollar difference would be made up proportionately across all of the other dayparts. There will also be more Radio revenues directed to PPM markets versus those still utilizing a diary measurement methodology.”

“The results of the study verify that advertisers and agencies are eager to embrace electronic measurement,” observed Gary Fries, President and Chief Executive Officer, RAB. “Moreover, it is apparent that there is a risk of loss of advertising dollars for media that do not advance to a more reliable – and better – measurement platform. Our industry needs to review these findings very carefully to determine our future direction with a full understanding of both the perils and opportunities that electronic measurement holds.”

To view study CLICK below:

http://www.rab.com/ppmStudy/ppmStart.htm#