Navigauge, just three years into the radio ratings business, could turn America's listener research marketplace -- currently dominated by Arbitron -- upside down.

The Atlanta-headquartered newcomer has developed a new in-car service that measures radio listening and location. Its videocassette-size gizmo uses a combination of global positioning satellite technology and continuous electronic tracking of station-hopping.

This compares with Arbitron's current paper diary methodology which, according to Nass-Hitzig Media principal Howard Nass, leaves much to be desired as it relies on consumers' recollections, uses small samples and has low cooperation rates.

"That has to be fixed," says Nass, noting that advertisers are predicted to spend more than $20 billion (€16.23bn; £10.98bn) on radio this year.

Arbitron is not unaware of the problem and is currently developing portable people meter-style technology for radio audience measurement. But given the robust opposition from vested broadcast interests encountered by Nielsen Media Research, there is no reason to suppose that Arbitron will have an easier ride.

Meantime, Navigauge scents opportunity in the current state of radio measurement technology. "For a long time, the radio industry itself has lamented the fact that it gets a large percentage of consumers' media consumption but a disproportionately small share of advertising revenue," notes the company's ceo Tim Cobb. "That's based on the fact that they cannot articulate to advertisers the value that they are delivering."

James Boyle, managing director and broadcast analyst at Wachovia Capital Markets, agrees. "Even before advertisers and their agencies became increasingly obsessed over return on investment in the last year or so, there was always a concern over 'am I getting what I'm buying?'" he said.

Navigauge has conducted trials with marketers like Coca-Cola and McDonald's, who helped fund an Atlanta pilot scheme that installed the tracking device in over 500 cars and trucks. The new system hopes to be operational in the ten largest US markets by early 2006, and in the top twenty markets by the end of the same year.

According to Cobb, the second-by-second analysis of listening and location makes Navigauge worthy of investigation. "We're not going to bash Arbitron," he says [before doing exactly that] "because I think they do a good job with the information they have, given the way they collect it. But when we've done a comparison of a diary to actual behavior, the results are radically different."

Data sourced from: New York Times; additional content by WARC staff