3 What Cuts Through in Arbitron

What Cuts Through in Arbitron? 2008 edition

Observations from a former radio consultant

September 25, 2008

§ There is a reason I am a FORMER consultant § Some of these ideas come from others »The good stuff is mine »The bad stuff is someone else’s fault § I have often been totally wrong § I reserve the right to change my mind when it suits me § I am biased…I work for Arbitron now!

Forward looking statements: Statements made in this presentation that are not historical in nature, particularly regarding expected performance in 2008 and future years, are forward-looking statements. These forward-looking statements are based on our current expectations and assumptions, and involve various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Important factors known by the company that could cause such material differences include those referenced or discussed from time to time in our filings with the SEC, including those referenced under the heading “ITEM 1A –Risk Factors”in our Annual Report on Form 10-K for the year ended December 31, 2007 and elsewhere, and any subsequent periodic or current reports filed by us with the SEC. In addition, any forward-looking statements contained in this presentation represent our estimates only as of the date hereof and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

2 ©2008 Arbitron Inc. WhWhaatt CCuuttss ThThrroougughh iinn AArrbbiittrroon?n? WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n? nn PPPrrrooogragragrammmmmmeeerrrsss hhhaaaveveve aaa veveverrryyy hhhardardard jjjob!ob!ob! nn YYYooouuu nnneeeeeeddd tttooo cccuuuttt ttthhhrrrooouuuggghhh pppeeerrrccceeeppptttuuuaaallllllyyy aaannnddd hhhaaaveveve ttthhhaaattt tttrararannnssslllaaattteee iiinnntttooo rrraaatttininingggsss rrreeesssululultststs

WWhhaatt yyouou dodo PPeerrcceeppttiionon AArrbbiittronron rresesuulltsts nn AAA lllooottt cccaaannn gggeeettt lllooosssttt iiinnn tttrararannnssslllaaatttiiiooon!n!n! What’s Different Now?

§ With PPM some say, “Passive measurement means it’s no longer a perception game” »Technically PPM doesn’t require people to remember to write down their listening § Think about the bigger picture…your listener’s perception of your station is largely what motivates them to tune in to begin with § This still works…

What you do Perception Arbitron results

5 ©2008 Arbitron Inc. WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n? nn IIInnn rrreeeaaalll eeessstttaaattteee,,, ttthhheee aaannnssswwweeerrr iiisss lllooocccaaatttiiiooonnn,,, lllooocccaaatttiiiooonnn,,, lllooocccaaatttiiiononon nn IIInnn radradradiiiooo,,, ttthhheee aaannnssswwweeerrr iiisss uuusssuuuaaallllllyyy pppooosssiiitttiiiooonnn,,, pppooosssiiitttiiiooonnn,,, pppooosssiiitttiiiononon nn AAA clclcleeearararlllyyy dddeeefffiiinnneeeddd aaannnddd uniuniuniqqquuueee pppooosssiiitttiiiooonnn cccaaannn cccuuurrreee mmmooosssttt rararatttininingggsss wwwoooeseses WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n? nn PPPooosssiiitttiiiooonnn mmmeeeaaannnsss aaannnssswwweeerrrinininggg ttthhheeessseee qqquuueeessstttiiiooonnns:s:s: ØØ CCCananan lililistststeeennneeerrrsss iiidddeeennntttiiifffyyy wwwhahahattt ttthhheee ssstttaaatttiiiooonnn iiisss """kkknnnowowownnn fffooor?r?r?””” ØØ DoDoDoeeesss ttthhheee stststaaatttiiiooonnn hahahavvveee aaa llleeeaaadddeeerrrssshhhiiippp pppooosssiiitttiiiooonnn iiinnn ttthhheee mmmiiinnnddd ooofff ttthhheee lililistststeeennneeer?r?r? ØØ DoDoDo llliiistststeeennneeerrrsss kkknnnooowww wwwhhhooo ttthhheee stststaaatttiiiooonnn iiisss fffooor?r?r? ØØ DoDoDo yoyoyoururur lililistststeeennneeerrrsss kkknnnowowow hhhowowow tttooo uuussseee ttthhheee stststaaatttiiiooon?n?n? WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n? nn RRRaaatttininingggsss sssuuucccccceeessssss iiisss uuusssuuuaaallllllyyy dddeeefffininineeeddd bybyby ØØ GGeettttiinngg aanndd ddeeffiinniinngg yyoouurr ppososiittiionon ØØ EExxeeccuuttiioonn == tthhee ssuumm ooff tthhee lilittttllee tthhiinnggss ddoonnee rriigghtht WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n? nn RRRaaatttininingggsss sssuuucccccceeessssss iiisss uuusssuuuaaallllllyyy dddeeefffininineeeddd bybyby ØØ GGeettttiinngg aanndd ddeeffiinniinngg yyoouurr ppososiittiionon ØØ EExxeeccuuttiioonn == tthhee ssuumm ooff tthhee lilittttllee tthhiinnggss ddoonnee rriigghtht

2 ExExeeccuuttionion 6%6% sshhaarere 4 PoPossiittionion What’s Different Now?

§ PPM means share compression »Less distance between the top ranked station and the fifth ranked station § In general PPM ratings are lower than Diary so…

1 Execution 4% Share Position 3

10 ©2008 Arbitron Inc. WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n? nn CCCoooncncnceeennntttrararatttiiiooonnn ooofff fffooorrrccceee aaannnddd nnnarrarrarrooowww fffooocccuuusss ØØ BBee 6600%%++ ooff ssoommeetthhiingng ØØ YYoouu ccanan’’tt keekeepp bbootthh ffeeeett oonn ooppppoosisittee sisiddeess ooff tthhee rriivveerr babannkk wwiitthhoouutt ggeettttiinngg wwetet nn """WarWarWarninninninggg""" ØØ BBeewwaarree ooff bbeeccoommiinngg ttoooo nnaarrrrowow ffoorr yyoouurr mmaarrketket……YYoouu nneeeedd eennoouugghh ccuummee ttoo wwinin WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n? nn MMMooosssttt ssstttaaatttiiiooonnnsss nnneeeeeeddd aaa cccrrriiittticicicaaalll mmmaaassssss ooofff cucucummmeee tttooo bebebe vvviiiaaabbblelele –– TThhisis nnuummbbeerr vvaarriieess bbyy mmaarrketket –– EExcxceeptptiioonnss:: SSmmooootthh JJaazzz,z, EEtthhnniic,c, SSppoorrttss,, eettc.c. ccaann hhaavvee llowoweerr ccuummee dduuee ttoo hhiigghheerr TTSLSL ffrroomm aa nnaarrrrowoweerr ttaarrggetet nn PPPinininpppoooiiinnnttt ttthhheee cucucummmeee ooofff ttthhheee vvviiiaaabbbllleee ssstttaaatttiiiooonnnsss ininin yyyooouuurrr mmmarararkkketetet TSL CumeGrid Cume

Share T i m e S pent PPM Philadelphia TSL CumeGrid

June 2008 PPM Daily Cume 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 0:45 1.8% 2.3% 2.7% 3.2% 3.6% 4.1% 4.5% 5.0% 5.4%

0:50 2.0% 2.5% 3.0% 3.5% 4.1% 4.6% 5.1% 5.6% 6.1%

WYSP-FM 2.7 WUSL-FM 3.1 WRDW-FM 4.1 0:55 2.2% 2.8% 3.4% 3.9% 4.5% 5.0% 5.6% 6.2% 6.7%

1:00 2.4% 3.0% 3.6% 4.2% 4.8% 5.4% 6.0% 6.6% 7.2%

WRFF-FM 3.6 KYW-AM 6.3 1:05 2.6% 3.3% 4.0% 4.6% 5.3% 5.9% 6.6% 7.3% 7.9%

WMGK-FM 4.9 WBEB-FM 7.9 1:10 2.8% 3.6% 4.3% 5.0% 5.7% 6.4% 7.1% 7.8% 8.5%

WXTU-FM 3.7 WPHT-AM 4.1 WMMR-FM 5.3 WOGL-FM 6.6 1:15 3.0% 3.8% 4.5% 5.3% 6.0% 6.8% 7.5% 8.3% 9.0%

WRNB-FM 3.0

D a i ly T ime Spe nt 1:20 3.2% 4.0% 4.8% 5.7% 6.5% 7.3% 8.1% 8.9% 9.7%

1:25 3.4% 4.3% 5.1% 6.0% 6.8% 7.7% 8.6% 9.4% 10.3%

1:30 3.6% 4.5% 5.4% 6.3% 7.2% 8.1% 9.0% 9.9% 10.9%

1:35 3.8% 4.8% 5.8% 6.7% 7.7% 8.6% 9.6% 10.5% 11.5%

WDAS-FM 6.2 1:40 4.0% 5.0% 6.0% 7.0% 8.1% 9.1% 10.1% 11.1% 12.1%

1:45 4.2% 5.3% 6.3% 7.4% 8.4% 9.5% 10.6% 11.6% 12.7% PPM Philadelphia TSL CumeGrid

June 2008 PPM Daily Cume 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 0:45 1.8% 2.3% 2.7% 3.2% 3.6% 4.1% 4.5% 5.0% 5.4% TSL/Cumetoo 0:50 2.0% 2.5% 3.0% 3.5% 4.1% 4.6% 5.1% 5.6% 6.1%

WYSP-FM 2.7 WUSL-FM 3.1 WRDW-FM 4.1 0:55 sm2.2%all to 2dri.8% ve big3.4% 3.9% 4.5% 5.0% 5.6% 6.2% 6.7%

1:00 2.4% ratings3.0% 3.6% 4.2% 4.8% 5.4% 6.0% 6.6% 7.2%

WRFF-FM 3.6 KYW-AM 6.3 1:05 2.6% 3.3% 4.0% 4.6% 5.3% 5.9% 6.6% 7.3% 7.9%

WMGK-FM 4.9 WBEB-FM 7.9 1:10 2.8% 3.6% 4.3% 5.0% 5.7% 6.4% 7.1% 7.8% 8.5%

WXTU-FM 3.7 WPHT-AM 4.1 WMMR-FM 5.3 WOGL-FM 6.6 1:15 3.0% 3.8% 4.5% 5.3% 6.0% 6.8% 7.5% 8.3% 9.0%

WRNB-FM 3.0

D a i ly T ime Spe nt 1:20 3.2% 4.0% 4.8% 5.7% 6.5% 7.3% 8.1% 8.9% 9.7%

1:25 3.4%Targe4.3%ted (lo5.1%wer 6.0% 6.8% 7.7% 8.6% 9.4% 10.3% Happy Land 1:30 cu3.6%me) 4w.5% ith grea5.4% ter6.3% 7.2% 8.1% 9.0% 9.9% 10.9% 1:35 3.8%pass4.io8% n (T5SL).8% 6.7% 7.7% 8.6% 9.6% 10.5% 11.5% WDAS-FM 6.2 1:40 4.0% 5.0% 6.0% 7.0% 8.1% 9.1% 10.1% 11.1% 12.1%

1:45 4.2% 5.3% 6.3% 7.4% 8.4% 9.5% 10.6% 11.6% 12.7% What is Critical Mass for Cume?

June 2008 PPM Daily Cume 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 0:45 1.8% 2.3% 2.7% 3.2% 3.6% 4.1% 4.5% 5.0% 5.4%

0:50 2.0% 2.5% 3.0% 3.5% 4.1% 4.6% 5.1% 5.6% 6.1%

WYSP-FM 2.7 WUSL-FM 3.1 WRDW-FM 4.1 0:55 2.2% 2.8% 3.4% 3.9% 4.5% 5.0% 5.6% 6.2% 6.7%

1:00 2.4% 3.0% 3.6% 4.2% 4.8% 5.4% 6.0% 6.6% 7.2%

WRFF-FM 3.6 KYW-AM 6.3 1:05 2.6% 3.3% 4.0% 4.6% 5.3% 5.9% 6.6% 7.3% 7.9%

WMGK-FM 4.9 WBEB-FM 7.9 1:10 2.8% 3.6% 4.3% 5.0% 5.7% 6.4% 7.1% 7.8% 8.5%

WXTU-FM 3.7 WPHT-AM 4.1 WMMR-FM 5.3 WOGL-FM 6.6 1:15 3.0% 3.8% 4.5% 5.3% 6.0% 6.8% 7.5% 8.3% 9.0%

WRNB-FM 3.0 D a i ly T ime Spe nt 1:20 3.2% 4.0% 4.8% 5.7% 6.5%All s7.t3%ations8.1% with 8.9% 9.7% 1:25 3.4% 4.3% 5.1% 6.0% 6.8% 5%+7.7% sha8.6%re 9.4% 10.3% 1:30 3.6% 4.5% 5.4% 6.3% 7.2% ha8v.1%e app9.0%rox 9.9% 10.9%

1:35 3.8% 4.8% 5.8% 6.7% 3507.7% ,0008.6% daily9.6% cume10.5% 11.5% WDAS-FM 6.2 1:40 4.0% 5.0% 6.0% 7.0% 8.1% 9.1% 10.1% 11.1% 12.1%

1:45 4.2% 5.3% 6.3% 7.4% 8.4% 9.5% 10.6% 11.6% 12.7% WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n? nn CCCuuummmeee aaannnddd TTTSSSLLL pppooottteeennntttiiiaaalll iiimmmpppaaacccttteeeddd bbby:y:y: ØØTTThhheee sssiiizzzeee ooofff ttthhheee hhhooollleee fffooorrr yyyooouuurrr fffooorrrmmmatatat ØØTTThhheee nununummmbbbeeerrr aaannnddd qqquuualialialitytyty ooofff cccooommmpppeeetttiiitttooorsrsrs ØØYYYooouuurrr aaabbbiiilililitytyty tttooo pppooosssiiitttiiiooonnn ttthhheee ssstttaaatttiiiononon ØØYYYooouuurrr eeexxxeeecccuuutttiiiononon ØØAAAdddvvveeerrrtttiiisssiiinnnggg aaannnddd ppprrrooommmoootttiiiononon WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n? nn CCCuuurrrlylyly’’’sssLLLawawaw

““TThhee sseeccrreett ooff liliffee isis ababoouutt oonnee TThhiingng…”…” WWWhhhaaattt CCCuuutttsss TTThhhrrrooouuuggghhh iiinnn ArArArbbbitritritrooon?n?n?

ØØ CCCuuurrrlylyly’’’sssLLLawawaw ØØPPiinnppoioinntt oonene kekeyy ssttrraatteeggiicc ississueue ffoorr tthehe ssttaattionion ØØ AAccttiivveellyy pposiosittioionn yyoouurr ssttaattiioonn iinn tthehe mmiinndd ooff tthehe ccuussttoommeerr ((oovveerr aanndd oovveerr aaggaiain)n) ØØ RReeccooggnniizzee tthhaatt iitt ttaakekess ttiimmee ttoo ccuutt tthhrroouughgh What’s Different Now?

Ø“Recognize that it takes time to cut through”

Ø Changes come through very quickly in PPM

1.8

1.6

1.4

1.2

0.8

0.6

0.4

0.2

April wAeekpr i1l weAepkr i2l wAeekpr i2l wAeekpr il3 weekMay 4 weekMay 1 weekMay 2 weekMay 3 wJeeunke 4 wJeekun e1 wJeekune 2 wJeuekn e3 weekJul y4 weJeukl y1 weeJukl y2 week 3 March wMeekarch 1 wMeekarch 2 wMeaerckh 3 week 4

Page 21 PPM Rapidly Shows the Impact of Format Change on 100.1 FM in LA

From R&B KRBV-FM “V-100”to AAAA KSWD-FM “the Sound” 1.8 Share of Persons 12+ Other 1.6

1.4 Format change 1.2 from Urban to Rock on April 8 #1 1

0.8

0.6

0.4

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0 3 / 6 08 4 / 3 08 5 / 1 08 5 / 8 08 3 / 1 08 3 / 2 0 08 3 / 2 7 08 4 / 1 0 08 4 / 1 7 08 4 / 2 08 5 / 1 08 5 / 2 08 J u n e PPM, LA Metro, April 2008 preliminary data, Mon-Sun 6AM-MID, Other Persons 12+ Share

ØØ DDDononon’’’ttt ooovvveeerrr rrreeeaaacccttt tttooo gggiiivvveeennn mmmooonnnttthhhsss ooorrr qqquuuaaarrrttteeerrrlllyyy booboobooksksks üüüTTThhhiiinknknk lllooonnnggg ttteeerrrmmm... RRRaaatttininingggsss ararareee eeessstttiiimmmaaattteeesss aaannnddd ttthhheeeyyy cccaaannn bbbooouuuncncnce!e!e! üüüTTThhheee “““tttwwwooo aaannnddd tttwwwooo rrruuulelele””” What’s Different Now?

ØThere are no extrapsin PPM Ø Weekly reports have same sample size as monthlies ØResults come faster (weekly and monthly) so you can see impact sooner ØRatings bounce less

ØØ TTThhheeeyyy ooofffttteeennn hhhavavaveee dididimmmiiinnnisisishhhiiinnnggg rereretttuuurrrnsnsns

ØØ TaTaTaccctttiiicccsss ooofffttteeennn mmmaaassskkk bbbiggiggiggererer ssstttrrraaattteeegggiiiccc issississuuueseses What’s Different Now?

§ “Gains from tactics often mask bigger strategic issues”

§ The granularity of PPM can entice (too much) tactical marketing and (not enough) strategic marketing

26 ©2008 Arbitron Inc. From Mark Ramsey’s 7 Habits of Highly Successful Ratings § “Tactical is the new Black” »Results may be temporary... »But will be measurable... »Investment will be accountable § Strategic »Reminds listeners that we’re there »Reinforces the Brand Benefit »Tells Listeners “what we are and what we do” – Rarely a “Call-to-Action” – “If we don’t do it we might lose listeners”

27 ©2008 Arbitron Inc. www.mercurymediaresearch.com Mark Ramsey’s 7 Habits of Highly Successful Ratings 1. Recall Matters 2. Ride the High Tide 3. The “One”Rule 4. When your Direct Mail drops, the Game is On 5. “Tactical”is the New Black 6. Events Drive Ratings -Up or Down 7. Fulfill Expectations

§ What Happens When Features Come On? »Analysis of 15 features on Philly music stations – Only a few features break through perceptually – Many features cause high tune-out – Well-known, positively-evaluated features have the most positive behavioral impact – Successful features result in audience growth over weeks and months

§ The PPM DNA of Rush Limbaugh »PPM and content analysis of 10 days of Rush – Each hour starts with high anticipation, then immediate, significant audience loss – Shares are higher when Rush has neutral or negative attitude – The third hour of the show has lower share than the first two hours –The proportion of unclassified, “random”content increases in the third hour – Relatively few listen to a whole hour, let alone the whole show

§ What Happens When New Music Gets Played? »Impact of new songs on a Country radio station – New songs from Established artists perform better than new songs from New artists – Up tempo music performs better than slower music. – Male artists perform better than female artists, particularly when comparing New male artists to New female artists. – The range of impact is +8% to a -5%.

§ Real PPM Panelists Tell All »One-on-one interviews with roughly 30 listeners shortly after they leave the PPM panel – Includes video and audio recordings of panelists’comments »The PPM experience – Panelists feel “special”and like having their opinions heard – Panelists carry their meters and are committed to doing so – Very positive perception of PPM and dealing with Arbitron »Three types of listening – Intentional listening: 31% of cume; 77% of listening time – Incidental listening: 19% of cume; 18% of listening time – Invisible listening: 50% of cume; 5% of listening time

• The industry mistakenly believes radio loses much of its audience when commercials run

• On average, radio holds on to more than 92% of its lead-in audience during commercial breaks

• Audience does not drop significantly between the third, fourth, fifth and sixth minutes of a commercial break Every Minute Counts

§ Diary was forgiving…impact of poor execution or marginal content could be diluted § PPM counts every minute including all the good content AND all the bad stuff Doug Abernethy, § Take stock of EVERYTHING that goes Regional Vice out President Radio One

34 ©2008 Arbitron Inc. Thoughts on Appointment Listening § “People tune out quickly, but tune-in gradually,” Larry Rosin, Edison Media Research` »Are your features truly “appointment worthy?” – Are they strong enough to cause listeners to alter their schedules so they don’t miss it? »Do’s and DON’Ts – DO become more selective about what you highlight – DON’T over-react by cutting all “stationality”

www.dmrinteractive.com

§ MOST of what drive ratings success is the same with PPM »Perception still counts! »P1s are more important than ever § Some important changes »EVERY minute counts »It’s a much faster world – Less time waiting to see if changes show up in the ratings – Management will expect quicker reaction times § Beware of becoming addicted to tactics… positioning is still the key to long term success