Wednesday, December 19, 2012

Why Would Nielsen Buy Arbitron?

It was all over the business and media news yesterday that Nielsen, best known for its TV ratings service bought Arbitron, best known for its radio ratings service. Among people in the radio business, it was widely thought to be a Nielsen bet on the future prospects for terrestrial radio. It could be, but there is probably much more to it than that. There are other, better reasons for Nielsen to want Arbitron.

The key words in the above paragraph are "best known for" because Nielsen does a lot more than measure TV ratings and there is more to Arbitron than just the radio ratings business.
Arbitron Inc. (NYSE: ARB) is an international media and marketing research firm serving the media—radio, television, cable and out-of-home; the mobile industry as well as advertising agencies and advertisers around the world. Arbitron's businesses include: measuring network and local market radio audiences across the United States; surveying the retail, media and product patterns of U.S. consumers; providing mobile audience measurement and analytics in the United States, Europe, Asia and Australia, and developing application software used for analyzing media audience and marketing information data. The Company has developed the Portable People Meter ™ (PPM™) and the PPM 360™, new technologies for media and marketing research.
Nielsen is thought to need the out-of-home measurement capability that Arbitron has in it's PPM (Portable People Meter. 

Nielsen stock was up 4.4% yesterday and Arbitron's 23.6%

I worked in radio sales and management for over 20 years before shifting my career toward Internet-based media.