The mistake could have cost Red FM hundreds of thousands of euro in lost advertising revenue over the last two years.
The station’s chief executive Fiona Darcy confirmed yesterday that its legal advisers are working on the case against Ipsos MRBI. The company is subcontracted to carry out the JNLR surveys of radio listenership.
The company then uses specialist computer software to extrapolate a radio station’s reach of its target audience.
The information is used by advertising agencies to plan advertising campaigns and place adverts in selected media, including radio.
But a glitch in the software mistakenly indicated that a significant proportion of Red FM’s 15 to 35-year age group target audience were actually tuning in to a rival station, 103FM, which broadcasts mainly in the county.
Ms Darcy said the mistake “grossly underestimated” her station’s ability to target specific listeners.
The glitch suggested the reach was 25% of the target audience when the actual figure is almost twice that at 48%.
The glitch has been corrected within the last two weeks.
But Red FM, which is part-owned by Thomas Crosbie Holdings, the owner of The Irish Examiner, is claiming it suffered financially as a result.
The discrepancy, which Ms Darcy said was ongoing since November 2007, was uncovered by Independent Radio Sales (IRS), which was carrying out research into listenership trends among under-35s.
IRS represents most independent radio stations and sells their advertising space to the main agencies.
In an email to advertising agencies last week, Ipsos MRBI said that its software tools ‘‘may produce incorrect calculations’’.
‘‘While there are no errors in the core JNLR published data, the error caused by the Mediastar software resulted in the misrepresentation of listenership levels for the Cork stations and the IRS combined stations,” the research company said.
UTV, which owns 96FM and 103FM in Cork, was also affected by the error but it considers the issue to be minor.
Red FM broadcasts on 104FM-106FM across Cork city and county.