Going Native

First, I want to get the sick joke that occurred to me when I saw Inside Radio's top story:   "Radio deploys digital to meet ‘native’ demand."

The moment local casino gaming was legal, radio was all over native advertising!

That out of the way, I have to say that I am skeptical of this "new trend" in advertising when it comes to radio.  Even the Wikipedia definition of it has been up since May ("this article may document a neologism in such a manner as to promote it. Please add more reliable sources to establish its current use and the impact the term has had on its field...") and I am still waiting for one of the proponents to comply in spite of many, many giddy articles and posts about its potential.

• The State of Native Advertising 2014 (a great info-graphic placing it in context)
• Native advertising is trolling us all
• New York Times' Native Ads Take Shape, Include a 'Full Content Studio'
• AdWeek: native advertising articles

Finally: "The Urban Legends of Native Advertising" makes these key points about this ad fad:   

1. It's not new.
2. Not any brand can do it.  You are not Nike.
3. Putting your logo front and center may kill the impact.

I am not ready to quote Tonto in response to anyone experimenting with new revenue concepts, but before radio sales execs go very far down the native path, I hope they compare this stealth new tactic to the much more effective multiplicity of tools already proven in our kit.

Country Money (Glass Half Full Edition)

The Inside Radio report this morning that country is radio's #4 billing format really got my mind churning, given that it has been four years since I tracked format conversion ratios in this space and at that time the format ranked #7 in a slightly different metric, converting ratings to revenue.

There was a time when news talk, with its 18 minutes per hour and country with an average of perhaps 12 commercial minutes per hour where the top two "power ratio" formats.  Back then, felt that was because country was able to sell its highly-engaged audience more effectively than other formats.
 Some of the loss of those old conversion ratios came as a result of clusters getting bigger and groups focusing more on "cluster shares" rather than just one station.  That, combined with country's growing mass audience over the last decade, has made our qualitative more like "the average" mainstream mass appeal radio station.

Nielsen's Radio Today 2013 tracks 1,857 country stations with a total cume audience of 66,025,700 and an AQH of 3,479,000!

Fewer sales reps are "country" (or any other format) specialists and the process of buying has become increasingly commoditized and less personal. 

This still works in the very smallest markets where we have many clients who still bill double their local audience share by doing personality endorsements, remote broadcasts and basically earning a premium by their proven ability to move product.  Well-trained sales people in these places like these can make surprising amounts of money and thus stay in those communities for a very long time, building more and more relationships of trust.

For example, the Country share in 2012 (from Radio Today 2013)
  PPM markets = 7.4
  Diary markets = 16.3
  Unrated markets (county by county) = 26.2
Those dollars outside the major markets that country bills spend just the same as the ones we fight for in the more compressed PPM metros.

Country is the one format at the top of the 2013 revenue ranker that hasn't fragmented into narrower pieces:  AC today has become at least three or four different formats, CHR has both pop and rhythmic, Rock has also splintered into a least four smaller pieces, Oldies has evolved to a completely different demo target, just to name a few.

The promise of consolidation was more format diversity and that does seem to have happened, but as BIA has tracked, that has not really grown revenues. 

Given the explosion of new media, I'd say that holding our own is quite an achievement since the media world of 2000 bears little resemblance to it in 2013.

Tell me what occurred to you after seeing the new numbers.

San Diego Jayebitrons Are In And AM-FM Radio Wins By Many Miles

Sometimes multiple data points all appear to converge, calling out for back-of-napkin research.  Your humble correspondent is delighted to do the math for you.

Blogger Jennifer Lane points to an "interesting new study by GroupM Next comparing broadcast and internet radio listeners. (GroupM Next is the “forward thinking, innovation unit” of GroupM, the largest conglomerate of Ad Agencies in the world. The unit studies consumer use of new platforms and provides insight to agencies on usage of such.) 

"The study reveals several positive facts about the Internet radio audience. The average age of an Internet radio listener is 34 years old versus the average age of a broadcast radio listener which is 47 years old. Since the average income was found to be similar in both groups, the Internet radio audience is more affluent given their substantially younger age.

"86% of Internet radio listeners listen to free services and have never paid to listen. They don’t mind ads, and don’t try to avoid them, and are twice as inclined to make a purchase after hearing an ad. In fact, 29% of Internet radio listeners have purchased something they heard advertises, versus 14% of broadcast radio listeners."

Today's Inside Radio reports on a Hivio San Diego presentation by Triton Digital chief strategy officer Patrick Reynolds who said the the entire San Diego market had Average Active Sessions of 5,126 people during the month of May.  The number was about twice that — around 9,500 — during the primetime 6am-8pm daypart.  

That is when I got the napkin out.

• Say that in an average quarter hour in San Diego roughly 15% of all people are listening to AM-FM radio.  That would be a napkin-calculated average persons of about 354,000.
• Assume that 90% of the total population of San Diego cumes a radio station at least once in an average week.  That would put the total cume persons using AM-FM radio in an average week at 2.1 million.

Five to ten thousand people vs 354,000, let alone 2.1 million????

Is there any wonder why terrestrial radio is only billing 5-7% of its total revenues from interactive?

No wonder online ad rates are so low.  No one's listening, if you believe my trusty napkin.

Hey, you "forward-thinking innovators:"  caveat emptor!
 

Triton Digital chief strategy officer Patrick Reynolds said the San Diego market had Average Active Sessions of 5,126 people during the month of May.  The number was about twice that — around 9,500 — during the primetime 6am-8pm daypart.   Two-thirds of the sessions were for Pandora, with the remaining third divvied up among all other webcasts, including FM/AM streams.  That portion of the pie is cut into extremely narrow slices — Triton says San Diego residents divided their listening up among 4,754 different stations, including many from outside the market. “They’re listening to a lot of local traditional radio stations online,” Reynolds noted, saying server log data shows stations from markets all over the country showing up.
Triton was also able to detect listening on 60 different devices, including smartphones, gaming consoles and desktop units like Sonos.  “It’s kind of complicated but you have to be in all the places that your people are if you want that audience,” Reynolds said.
He also noted that while about 80% of Pandora listening occurs on a mobile device, most radio groups pull in fewer than 50% of their users that way.  It’s why Reynolds thinks Pandora listening levels are so much higher than for everyone else.  “They’re where people are and they’re getting a big audience,” he said.
- See more at: http://www.insideradio.com/Article.asp?id=2667778&spid=32061#.UciFYYXtjJM

Triton Digital chief strategy officer Patrick Reynolds said the San Diego market had Average Active Sessions of 5,126 people during the month of May.  The number was about twice that — around 9,500 — during the primetime 6am-8pm daypart.   Two-thirds of the sessions were for Pandora, with the remaining third divvied up among all other webcasts, including FM/AM streams.  That portion of the pie is cut into extremely narrow slices — Triton says San Diego residents divided their listening up among 4,754 different stations, including many from outside the market. “They’re listening to a lot of local traditional radio stations online,” Reynolds noted, saying server log data shows stations from markets all over the country showing up.
Triton was also able to detect listening on 60 different devices, including smartphones, gaming consoles and desktop units like Sonos.  “It’s kind of complicated but you have to be in all the places that your people are if you want that audience,” Reynolds said.
He also noted that while about 80% of Pandora listening occurs on a mobile device, most radio groups pull in fewer than 50% of their users that way.  It’s why Reynolds thinks Pandora listening levels are so much higher than for everyone else.  “They’re where people are and they’re getting a big audience,” he said.
- See more at: http://www.insideradio.com/Article.asp?id=2667778&spid=32061#.UciFYYXtjJM

Country's Upper Demos Are More Loyal In PPM Too

Inside Radio's report this morning on what's called "the largest format study ever based on PPM data" now includes radio’s 30 largest markets, calculated from an average of the January-September 2010 surveys, which will be presented next week in Baltimore, demonstrates that the less ethnic the market, the better the cume of the average country station and the country format overall.

“Yes, you have to have a high cume, and more specifically a high P1 cume,” says Research Director, Inc. partner Charlie Sislen. “But you also need high TSL among P1s, even though they are only a small portion of your total audience.”

The fewer country stations in a market the better in that measure the average PPM-rated country station appears to do, especially in younger demos.

18-34's average station share indexes .92 of the 6+ share of 3.9, while the 18-34 country format share is. .95 of the country format share of 7.4. The average country station share in these 30 markets 18-49 and 25-54 is .95 of the 6+ share, respectively, and 35-64 the average station share is a one to one relationship with 6+. Country format indexes by demo are better 18-49 (.99) and 35-64 (1.03), and worse in the more competitive 25-54 demo (.97).

Two educated guesses from a non-statistician:

1. PPM tends to favor country stations with the broadest demo P-1 cume reach across all age groups and may punish ones with narrower targets on the young side.
2. Compressed shares of audience are probably not due to PPM technology per se, but look to me to be the result of small samples which can under-represent any station or format which doesn't have very similar shares in all geographies and age groups.

Woe to you if you have a weak signal or a station/format with polarized appeal or which does better in only some metro zip codes, demos or ethnicities.

Good for you if you dominate your format's listening profile. To the usage leader go the spoils.