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Arbitron is a radio audience research company in the United Statesmarker which collects listener data on radio audiences similar to that collected by Nielsen Media Research on television audiences. It was founded as American Research Bureau by Jim Seiler in 1949 and became bi-coastal by merging with L.A. based Coffin, Cooper and Clay in the early 1950s. ARB's initial business was the collection of television broadcast ratings exclusively.

ARB changed its name to Arbitron in the mid 1960s. The name came from the Arbitron System that was one of ARB's products; a central 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.

Methods

Survey

Arbitron collects data by selecting a random sample of a population in roughly 100 metros throughout the United States four times a year. An additional 200 markets are surveyed in the Spring and Fall. People in the sample are asked to maintain a written diary describing each radio program listened to. Each selected household agreeing to participate is provided a diary for each member aged 12 and older for one week, beginning on Thursday and ending the following Wednesday. At the end of the week, the completed diaries are returned to Arbitron by post.

A new random sample is selected to participate each week. Arbitron's surveys are broken down into four key ratings periods, roughly corresponding with the seasons and bearing their names. The term commonly used in the radio industry for these quarterly ratings is Arbitron book, or more specifically, the Spring book, '"Summer book", 'Fall book, and "Winter book".. Arbitron also releases monthly information twice between the release of each book. These ratings, called Arbitrends, commonly referred to as "trends", are labeled Phase I and Phase II. The Arbitrends, despite being mid-term indicators, reflect the entire three-month block leading up to them. Arbitron surveys listener habits from six a.m. to midnight from Monday through Sunday , 48 weeks per year. There is given a one week break following the Spring book, and an additional three weeks break following Fall book. 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. Major ratings products include cume (the cumulative number of unique listeners over a period), average quarter hour (AQH - the average number of people listening every 15 minutes), time spent listening, (TSL), and market breakdowns by demographic. Its important to understand that the CUME only counts a listener once, whereas the AQH can count the same person multiple times, this is how to determine the TSL. 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)

The seasonal books' 12+ ratings, a measurement of the overall number of people 12 and over listening to a particular station, are available as a free service for noncommercial use in most markets, except in cases where radio companies request an embargo. More detailed data, such as demographics and Arbitrends, are available only by paid subscription.

Portable People Meter

With the interest in the collection of more accurate ratings data, Arbitron has introduced the Portable People Meter (PPM). 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 meters for 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. The PPM is the currency in Houstonmarker, Philadelphiamarker, New Yorkmarker, Atlantamarker, Detroitmarker, Long Islandmarker, Middlesexmarker-Somersetmarker-Unionmarker, Chicagomarker, Los Angelesmarker, Riversidemarker-San Bernardinomarker, San Franciscomarker and San Josemarker. By 2010, 50 markets will be measured using the PPM. [44814] In 2006, Arbitron sued competitors International Demographics and Ipsos concerning 3 patents related to technology used by the Portable People Meter.

Financial Performance

Top 10 of the Market Research Sector 2006

>
Rank Company Sales in 2006
(million USD)
Growth in %
1 Nielsen Company 3,696.0 2.6
2 IMS Health Inc. 1,958.6 8.9
3 Taylor Nelson Sofres 1,851.1 2.5
4 Kantar Group 1,401.4 4.1
5 GfK AG 1,397.3 5.4
6 Ipsos 1,077.0 6.5
7 Synovate 739.6 9.5
8 IRI 665.0 6.6
9 Westat 425.8 0.8
10 Arbitron 329.3 5.9


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