A couple of years ago Nielsen Media Research’s grip on the Radio Ratings contract with Australia’s commercial sector was under serious threat. There were at least three major players, lead by the US giant Arbitron fighting hard to wrest the long-standing agreement with CRA away from the incumbent. Their main weapon was shiny new electronic devices commonly known as “people meters” that promised to revolutionise Radio ratings.

The new-fangled electronic gadgets in the form of watches or pagers promised a new level of immediacy and accuracy as their proponents set about discrediting the old diary system as out-dated and wildly inaccurate.

Yet, Commercial Radio Australia decided to stick with what they knew, shunning the untested. CRA CEO, Joan Warner, backed by many of her members, urged caution and was reluctant to spend millions on something that could backfire. Turns out she was right.

In the US, the experience with people meters is so bad that some of Arbitron’s investors have taken out a class action, suing it for misleading them. See earlier story.

Now Nieslen Co, the supplier of TV ratings in the US but which has yet to gain a foothold in Radio against rival Arbitron, last Tuesday picked up several markets from disgruntled Arbitron customers; Clear Channel and Cumulus Media Inc. Ouch!

According to CNNMoney.com, Arbitron shares dropped 22.1% that afternoon.