PPMs Will Boost Radio Adspend, Claims America's RAB

25 July 2005

If the US radio industry takes the plunge and accepts the use of Portable People Meters to measure radio audiences, it will likely benefit from an additional $696 million (€572.4m; £397.5m) in annual ad revenues.

So claims a recent study conducted for the Radio Advertising Bureau, although the same survey revealed that one-quarter of respondents and two-thirds of radio industry advertisers don't know their PPMs from their elbows.

Investigating the future plans of 484 marketers and agency execs, the study reveals that they would cut radio adspend by 2% a year if the current manual diary system of audience ratings measurement remains in place.

However, if a more accurate yardstick of consumer listening habits were used, annual adspend would rise by 3%.

Although few respondents have a detailed awareness of PPMs, RAB president Gary Fries believes "they know if they're comfortable with it or not" as a means of recording audience data.

The pocket-sized electronic device is worn on the belt and picks up inaudible codes in radio broadcasts to record the listening habits of US consumers.

Produced by market researcher Arbitron, which also funded the RAB survey, PPMs can be used to record data about the exposure of individuals to other audible media such as TV and cinema advertising.

Data sourced from AdAge (USA); additional content by WARC staff