Radio measurement tool under fire from minority stations

But that poses a problem for the stations with the most loyal audiences. Talk radio, Christian broadcasters and Hispanic broadcasters saw a 10-15 percent drop in listeners. Urban stations saw a 25 percent decrease.

Of course, a decline in audience size negatively impacts advertising revenues. So the PPM Coalition formed to lobby against the new measurement method.

The coalition includes the National Association of Black-Owned Broadcasters, Spanish Radio Association, Association of Hispanic Advertising Agencies, and five radio group owners: Border Media, Entravision, Univision, SBS and Inner City Broadcasting.

The coalition has been lobbying Congress and the FCC to force Arbitron to improve the size and quality of its sample groups. They say not enough minorities are represented in the samples and that Arbitron doesn't do enough to make sure minorities stay in the program.

Last year, the FCC sought comments on whether it should open an investigation of PPM and in May started a formal inquiry, asking if the technology actually undercounts minorities and how the system could be improved.

In June, Towns launched a congressional investigation of PPM technology. In September, after serving a subpoena to the Media Ratings Council for documents regaring the oversight of PPM, he released findings that showed PPM was not accredited in all markets. He also found that Arbitron did not make sufficient effort to use bi-lingual interviews to recruit Spanish-speaking listeners to the its sample panels.

Jessica Pantanini, incoming chairwoman of the Association of Hispanic Advertising Agencies, who is testifying this morning, said she has no problem with the device itself. But Arbitron needs to address the problems with its samples, she said.

"If you've got a single form of measurement in a market and have an issue with sample size and quality, that affects ratings," she told Hillicon Valley. "Then stations can't justify their advertising prices because they can't prove size and breadth of the audience. And then advertising agencies can't quantify those audiences and can't recommend those stations to clients."

"For some clients," she continued, "that means they aren't going to continue to invest in the medium or the market or demographic at all."

Alton Adoms, chief marketing officer for Arbitron, who is also testifying this morning, said stations can use the data to restructure programming line-ups to better attract listeners.

He said broadcasters and regulators should focus on the "bigger challenges," such as the tight economy and high debt loads, "not the fact that PPM has brought light to darkness on audience numbers."

PPM is now used in 25 major markets (with a panel size of 70,000) and will be in 33 by the end of the year. Arbitron aims to eventually use the devices in 49 markets. The devices also pick up online stations. Someday, the firm envisions a cellphone application that can track radio station frequencies.

As Web audience measurement gets more and more sophisticated, "advertisers are expecting a different level of accountability," Adams said. "Radio needs a way to get its fair share" of advertising revenue.

Pantanini acknowledged Arbitron has addressed some issues, but "it just not cognizant of the impact this is having on our segment of the industry," she said.

Pointing to Texas and California, which have large Hispanic populations, she said "To not have a methodology that addresses these demographics just seems absolutely irresponsible."

At 10 a.m. you can find a live webcast of the hearing here.