The $1.8 billion agency sent a tremor through the industry with talk of bringing a post-analysis buying standard to radio for greater accountability. The standard could hold spot radio responsible for make-goods in much the same way TV is if viewership guarantees are made and audiences aren't delivered.
Radio ad revenue last year hit $10.7 billion, of which $1.9 billion was national spot time. Unlike TV, audience guarantees aren't commonly made in radio. Most agencies average two or more quarters to determine an audience estimate and negotiate accordingly.
"There is no question as to whether we will be implementing it; the question is how, with what methodology," said Bob Igiel, exec VP-director of broadcast buying and programming at Y&R.
He said a decision should be made within six months. The New York agency has formed a task force of researchers from other sources, such as Arbitron Co., sales rep companies like Interep Radio Store, broadcasters and others to study just how to implement post-analysis of the buys. The group is expected to meet two or three times by mid-May with the next planned mid-June.
Meanwhile, Arbitron, the primary radio ratings measurer, and the American Association of Advertising Agencies will convene their own meeting May 5 to address the issue.
Other ad agencies aren't yet publicly behind the idea. Opponents include Howard Nass, senior VP-spot broadcast director at Ogilvy & Mather, and Stu Gray, head of the media research board at the Four A's as well as senior VP-media research director at BBDO Worldwide.
New software from Donovan Data Systems and others, providing quick and easy analysis of ratings, is largely at the heart of the issue. Arbitron has already faced ongoing criticism of survey error margins and small sample sizes, which have led many agencies to cope with ratings "wobble" by averaging two or three survey periods for their buys.
A groundswell of opposition has surfaced from stations. Several of the country's largest station groups have denounced the proposal, some refusing to make guarantees.
Radio, industry executives say, is about formatting and promotion, whereas TV does much less promotion and is about programming.
"Our stations are vehemently opposed to it," said Bob Neil, exec VP-radio, Cox Broadcasting. "The major group owners I've talked to are probably not going to accept" business that requires guarantees. Mr. Igiel said that there would be no "official" guarantees.
Others who have spoken out against posting include Mel Karmazin, president-CEO of Infinity Broadcasting; Jeff Smulyan, CEO, Emmis Broadcasting; Bill Clark, chairman, Shamrock Broadcasting; and Wayne Vriesman, VP-radio, Tribune Broadcasting.
"Arbitron's data do not support the kind of minute detail to be broken down into individual hours," Mr. Neil said. "It was not intended to be used that way."
In the meantime, Y&R isn't requesting post-analysis from stations, Mr. Igiel said, with some exceptions in the San Francisco office.
Mr. Igiel added that he thinks posting will actually increase radio's revenues.
"Every medium has grown that is accountable," he said. "Accountability is not a dirty word. It's a wonderful way to justify investment.'