From Borrell: Much More Than #4

No doubt you've seen the trade press on a webinar last week anchored by researcher Gordon Borrell celebrating the 20th anniversary of the appearance of the first banner ad.

The prognostication presentation came as a result of a survey of 2,102 Small and Medium Business managers conducted in August & September 2014 combined with an analysis of Borrell’s database of marketing expenditures covering 3,000 U.S. counties.

Borrell wanted to know:

• Is the Golden Age of Advertising coming to an end? 
• What will the media company and ad agency of the future look like?

In spite of the fact that the "big" reason for the study had only a little to do with analog media and much more to understanding the priorities of SMB operators as it relates to digital marketing budgets, there is no denying that Gordon and his team predicted along the way:

• Half of the 15,433 radio stations currently on the air will cease to exist. 
• “It will be the weakest stations we believe that will disappear, reemerging in the form of promotions.” 
• "Local advertising as we know it disappears, but it reemerges in the form of promotions,”
• New dashboard technology will cause long-term listening erosion for FM/AM radio. 
• “Inevitability” of radio-enabled smartphones.
•  “All of these businesses out there have the medium at their disposal to go direct to consumers.”
• Sales reps won’t sell ads but help educate local businesses on how to create and perform promotions.
• 95% of advertising will be bought and sold programmatically by 2024

Since A&O&B friends Mark Ramsey and Tracy Johnson have already written prescient thought-pieces on what we need to do about #4, I'd like to focus on another very positive radio story contained in Borrell's data:  24% more of these SMB executives credit radio with providing them with new customers than television does!

“Radio tends to have a very strong beat on promotions.  All of these businesses out there have the medium at their disposal to go direct to consumers.”  -- Gordon Borrell

My take: allowing media buyers to convince us to move away from direct local, regional and national selling person to person toward numbers-based programming buying will devalue radio.  

In the short run, it may save up to 30% of gross revenues by lowering cost of sales, but if radio polishes its immediate bottom line while failing to invest in face-to-face presentations of our ROI strengths vis a vis all other competing media, it won't even take ten years for Borrell's pessimistic prognostications to become self-fulfilling.

A full analysis of the results can be found in “2014 Digital Marketing Services Outlook” on the Borrell website.

Watching The Radio

Think about this:

The motor home that has been MY house for the past seven months as I explore North America from coast to coast and border to border has cable TV and can also be fitted with DISH and/or DirectTV.

Those were the options I considered last summer when I left my residence and started the journey and at the time I was aware of, but had never actually used digital television.  Now, I find myself using nothing else (and it's free!).

For example, for the last five days I've been camping near New Orleans for the Mardi Gras celebrations.

By simply cranking up my antenna, I receive more than local 40 channels and since they're all digital, the picture is as clear as any as I get to know each area I visit.

Last week, I watched WZZK/Birmingham's never-boring Rick and Bubba for several days on my digital TV on a Southern Alabama TV station's "side channel."

If you live anywhere in "The South" and want to really hear the values connecting people, Rick and Bubba do that in engaging and entertaining ways. 

Their show website makes it look like they think the majority of their "watchers" stream video on computers or mobile devices and, for now, perhaps that's right.

However, last week, this digital TV watcher "experienced" their show on the very same playing field as GMA, Today and CBS This Morning.

I just looked at the future for radio morning shows - alliances with local TV, thanks to the visionaries headquartered at Summit Media, Birmingham!

A Little Promotion From Radio To Our Music Biz Friends

Each week, music promoters reach out to radio.  They call, email, visit in person, all designed to remind us that their artist or song is on the upswing.

This week's Billboard Magazine contains a powerful reminder that it's time for radio to reverse the transaction to be sure that music business decision-makers aren't taking us for granted as they contemplate what sells music for them.

Last year we ranked #18 on their list of priorities and now we're down to ranking #35.

Gulp!

Hey, music biz:  I guess it's true that you always hurt the one you love!  And, THAT hurts.

Fortunately, thanks to the Country Music Association, I have a few stats to point to that hopefully will return radio to a higher rank on the annual "moves music now" survey next time it's updated (click on each graphic to enlarge it):


 
 

Thanks, CMA!  It's so wonderful to have a few FACTS at our fingertips to remind our music business friends that they still need to be where the music buyers and fans are.

Those people still rank radio #1 as THEIR platform which still moves their country music now.

I Know How Local NPR, Glenn Beck, ESPN and Rush Affiliates Feel

While it's terrific to see a nationally-syndicated host active on the net, pulling his fans into his video content, I wish there was a way to do it through local affiliate websites and make sure that these network shows aren't replacing the relationship that still provides the bulk of their paychecks and gives them the reach with a direct connection to their listeners which replaces a consistent source of monitization with an unknown and less certain one.

If a national personality's online initiatives ultimately make their listeners stop using "radio" to hear, see, converse with them, what business are they in?

Radio Journalism VS PR

When two different trade media cover exactly the same story on the same day, that's not "news," that's reprinting press releases.

There's certainly nothing wrong with a competitor sending out PR each time they close a deal. Both Sirius and XM did it a decade ago. They also bought placement in movies and TV shows, all of which drove a growing impression back then that satellite radio was going to replace terrestrial radio among local business leaders.

"Local radio" is still standing and still wins the battle 10+ to one.

This is not to say that analog radio shouldn't worry about Pandora and all the emerging new media.

It's just to encourage you to tell your success stories in PR as well, while acknowledging that our value proposition on offer to both listeners and media buyers is under attack from new places.

So, what else is new?

Thanks to new media, we have two or three times the inventory to sell that we once did given all the platforms at our disposal.

1. Be sure that our clients get more than the results that expected by being better, more engagingly effective than any competing media's creative.

2. Give listeners more of what they come to us for and less of what they don't. Of course, doing so will mean that traditional "over the air" revenues will be flat to down unless we're able to aggressively raise rates, which in this economy and new media age is an immense challenge.

3. A more sustainable business model is to lower commercial loads "over the air" - making our analog products more listenable - and replace that revenue with money from all possible non-traditional sources.

Long term success requires long term thinking, and courage.

Change? Or, Small Change?

Today's headlines:

• John Gehron Proclaims “4th Golden Age of Radio”

• Stephan Sloan says “there are now more streams than listeners online.”

• U.S. Homes With TV Sets Drops for First Time in 20 Years
  
  
• Howard Stern & Oprah Help Sirius Radio Make Major Dough
  
  
• Is Sirius XM's Future Bearish or Bullish From the Two Dollar Mark?

Mel Karmazin math from yesterday's analyst call: “Sirius currently has nine percent of all listening and 15% of the total U.S. radio revenue. Thousands of stations dividing up 79%” of total radio revenue, hundreds (internet streamers) dividing up twelve percent of listening).

• Music Week's digital specialist Eamonn Forde tells the BBC this morning that record companies have given up album sales in exchange for the "opportunity" to establish a direct relationship with digital music buyers.

Lots of spin in the air today, eh? .. which makes it a great moment to enter a "no spin zone," The Corner Office:

It is easier for an organization to keep its established focus: the station manager who simply redoubles his or her efforts to make the budget for the quarter; the programmer who is totally absorbed in the specifics of PPM meter logs. It is not that these people are not hard workers or devoted to their jobs; in many cases, they are valuable employees. But one person’s “focus” is another’s “blindness to the change around them”. Radio as an industry has been slow to acknowledge and absorb the change implication of the digital revolution; many among us just wish it would go away and let us get back to business.

That’s where the agents of change can help; they can raise the larger issues that will determine our long term future. These issues include:

What real purpose do we serve for our listeners? For our advertisers?

What are the unique resources we bring to that job?

What are the values of our organization that guide our allocation of resources?

What is the process we use to get the job done for our listeners? For advertisers?

In our business, we seldom stop to ask those questions. First, they are sometimes just too hard to answer and second, we are running at a thousand miles an hour to get our normal business done. The urgent crowds out the truly important, the really strategic questions. It is admittedly easier to go back and switch-pitch the advertiser who didn’t buy our cluster on their last avail. But every day we fill with that frenetic activity, to the exclusion of the important strategic questions, is a day closer to risking irrelevance in a digitally connected world.

-- Greater Media Chairman & CEO Peter Smyth

The Productivity Paradox

Digital marketing expert and CBC reporter Todd Maffin produced this thought-provoking video "awareness test:"



After watching it, ask yourself what you need to do to get attention and be remembered in this new environment?

Can radio help listeners manage their technology?

Or, will it manage us?

Nielsen: Search Slips, Email and Social Networks Rule Mobile Web Uses

A new view of May's “What Americans Do Online” still shows Email to be, by far, the dominant sector in terms of mobile time, although this dominance shrinks by a few delta points to 38.5% from 41.6%. Search is another that nets out with a smaller share, although by less than a percentage point from 7.1% to 6.3%.

The share held by Social Networking remains very similar but News & Current Events comes out much stronger using the site-level analysis at a 7.2% share of time compared to 4.4% of time using the category-level analysis.

Share of time on Portals shows something more dramatic, with a change from 11.6% to 4.6% share of time, but this doesn’t mean that people are spending any less time on Portal sites, it's just that they are spending a lot more time now on email and social nets, checking out the buzz topics and their friends' status.

The Top 10 Reasons Why Radio Is Better Than The Mobile Web

10. It doesn't take minutes to buffer and load whenever you change stations.
9. When was the last time you tuned in to a radio station and got a "Not Found 404" message?
8. There are fewer grating color schemes on radio. Even on MTV.
7. The family never argues over which Web site to visit this morning.
6. A car radio has fewer buttons than a keyboard or a Blackberry.
5. Even the worst radio stations never excuse themselves with an "Under Construction" sign.
4. Shawn Parr, Lisa Dent or Bob Kingsley never slow down when a lot of people tune in.
3. You just can't find those cool network P.I. commercials on the Web.
2. Your iPod Nano with FM doesn't beep and whine when you hook up to your favorite radio station and can’t find a fast wireless connection and must try to log on with dial-up.
1. You can't seek and scan the Web from a couch with a beer in one hand and Doritos in the other.

Be Proud To Work In "A Supple And Durable Technology"

It’s not often radio gets any love from other media — especially the print media.

So it’s always worth pointing out when a newspaper journalist gets it right about radio, as Steve Lohr did this week in the New York Times (click to read it).

Calling radio “a classic evolutionary survivor,” Lohr notes the medium’s long history of competing and evolving against “new” and emerging technologies for decades.

Big thanks to Al Peterson for calling this pro-radio piece to our attention.

What Gord Did On His Summer Vacation

The staff at Jim Pattison Broadcast Group's Vancouver stations is very fortunate each Friday to receive an informative and insightful email from their Program Director Gord Eno, which he nicknames "The WJM."

This week's edition is so good (and for a change it's not about any secret strategies or tactics) I simply must share it with you:

With only the occasional slip I was able to stick to my goal of not listening to radio during my vacation. I did hear a station the first day but the the lack of focus and sloppy execution frustrated me so much that I wanted to hotline the radio station.

So I pledged to avoid radio for the next two weeks.

Difficult for me to do but, I offered myself a compromise by listening to Sirius in the rental car.

With hundreds of stations to offer we settled on four or five. I really couldn’t stay too long on the talk channels. Most of what was being offered was exaggerated opinions and over the top point of views. I found the hype to be insincere and the insulting.

Besides, I was looking for entertainment suitable for a vacation.

At first is it was the Broadway Musicals channel. When the announcers became boring and the repetition became too much I searched for something new and found three stand up comedy channels. The three channels went from safe to edgy to raunchy. Just like music scheduling the clips were rotating, some more than others. The really interesting clips were worth listening to a couple of times but the rest of the content was worth only hearing once. On the F-bomb channel it was easy to feel disconnected and a lot of switching to the other two comedy channels happened there.

Then, while scanning for something new I stopped on the Old Time Radio channel.

There it stayed for a couple of days.

Radio Mystery Theatre. Lux Radio Theatre. The Whisperer. The Jack Benny Show. The Thin Man. Our Miss Brooks. The Phil Harris-Alice Faye Show.

Listening to the various shows on Old Time Radio channel reminded me of the common thread that has lasted through decades of radio programming; it is all about the listeners.

The scripts, the performances, the storytelling, the characters in these old time radio shows were all playing directly to the audience. It was engaging. The words triggered images in my mind and I became a participant. It wasn’t just random audio, I was actively listening. I was involved.

Radio is the same today. You will be better than your competitors when you create engaging content that triggers participation and involves your listeners.

Don't Be A BOOF

In the field. In the trenches. Today’s programmer needs to come out from behind the computer, from behind the fire hose of PPM data and talk to the audience. More now than ever.

You hear a lot about “digital” and “change the way we are doing things.” Change leads to stress.

Even good change causes it. Stress can lead many experienced programmers and talent to develop the syndrome known as:

BOOF

Burned Out Old Farts.

Its not just a disease for experienced programmers. Even the youngest, most bright eyed and excited can suffer from the disease. Its a response from stress, worry, change, and fear.

At some stress point, the body and brain simply stop functioning and stop looking for new approaches.

How do you know if you might have it?

Lets look at possible symptoms:

• Doesn’t go to shows with his format’s artists anymore. Been there, done that
• You won’t find photos in the trades from them. Everyone knows them.
• Thinks blogging is something someone else does.
• Everyone knows them; but not really sure what they do now
• Last hung a banner at a station event sometime in the 90’s
• Never placed a Google Adwords or Facebook ad campaign
• May listen to his own station; but spends the majority of time buried in data or meetings
• Hired someone to build their own Facebook page or web site
• Do they have a web site?
• Most of his Facebook friends are old industry colleagues who are older than they are
• Can’t ID Matt Cutts, Matt Mullenweg, Matt Carter, Michel Fortin, John Carlton, or William Strauss
• Doesn’t have a Pandora account? Couldn’t tell you what Last.fm does?
• Couldn’t tell you the names of the top 20 influentials in his stations audience
• In charge, but makes others responsible when it hits the fan
• Hasn’t lost a ratings fight in a decade. Hasn’t been in one in two decades.
• Spends more time talking about what used to be; rather than what could be
• Last talked to a listener in person about the radio station in 1997
• Hasn’t been on the air for five years, but can tell talent how it should be
• Production? Really?
• Spends more time meeting about radio than listening to radio

A person affected with BOOF syndrome works harder on keeping his job, than doing his job. They are entrenched in the way it was and are praying they can last through the next IPO or two and still be working.

BOOF in your system can be overcome.

Emotion in the form of passion is your first defense.

Listening, learning, and reading from others is your second.

Are You Worth $10 A Month?

Seattle Times staff columnist Brier Dudley: The digital-media business has a new mascot:

Alexander Hamilton, the treasury secretary on the $10 bill. Hamilton sorted out the nation's financial policies during its chaotic early days. Entertainment companies are doing the same thing now that the digital revolution has happened — they're finding their footing and figuring out standard ways to make money. Their solution appears to be charging $10 a month for access to the most desirable content (click to read his column).

Google chief executive Eric Schmidt says that the experience of reading news will move to digital devices quite rapidly – and that it will involve personalized and local news which will be alert to your interests and existing knowledge. Speaking at the Activate 2010 summit held at the Guardian, Schmidt also warned that organizations should think of their mobile strategy ahead of their internet strategy – but that the two were intertwined so deeply that it was impossible to think of one without the other.

"The internet is the most disruptive technology in history, even more than something like electricity, because it replaces scarcity with abundance, so that any business built on scarcity is completely upturned as it arrives there," Schmidt said. "The next great success will be built even faster than Google, and the one after that even faster. It's just how it is."

TV news consultant Graeme Newell: "If you judge the success of your work by its share, you can continue to declare victory book after book, when the reality is that fewer and fewer people are using your product. Judging performance by share gets us off the hook. In the strange reality of share, it is okay that the number of people watching/listening to the show have seriously declined, as long as the guy across the street has a lower share than me. We ease our mind by telling ourselves that if all the competitors are declining, there is nothing that can be done. This measurement allows us to delude ourselves into thinking that losing slowly, is actually winning. It gives us an excuse not to improve, not to throw the bums out, not to transcend tired priorities. This channel performance measurement has sabotaged innovation. By skillfully concealing the number of customers in a statistical representation, we can turn a failure into a success. The metric serves the ego, not the bottom line. A bigger share of nothing is still nothing."

Think about this:

• Netflix and Rhapsody cost about $10 per month. Kindle books are mostly $10, although the software and online access to your Kindle library is free.
• A pioneer was TiVo, which charges people a little more than $10 a month for a service giving people more control over their TV consumption and ready access to a collection of shows.
• Apple is also onto the Hamilton thing. It nudged iTunes App prices up when the iPad arrived in April, with flagship-productivity apps costing $10 apiece. Apple is believed to be working on its own streaming-media service in the cloud, which probably won't cost much more than $10 per month.

What if your listeners were given the option of subscribing to your show/radio station commerical free for $10 a month? With commercials for $5?

Is what you do every day unique and special enough to be worth a Hamilton to enough listeners to build a business on?

To Make A Long Story Short...

"What's tried-and-true is that radio stations have incredible brands, and the listeners are shifting listening habits-albiet not dramatically-to access those brands through multiple channels." -- Triton Media's Neal Schore (in 4/19 "Radio Ink")

Change Isn't Hard After All

If change is difficult for you, or you want your listeners to change their habits/perceptions, read this new book:

"If people hate change, they have a funny way of showing it. Every iPhone sold serves as counter-evidence. So does every text message sent, every corporate merger finalized, every aluminum can recycled. And we haven’t even mentioned the biggest changes: Getting married. Having kids. (If people hate change, then having a kid is an awfully dumb decision.)

"It puzzled us--why do some huge changes, like marriage, come joyously, while some trivial changes, like submitting an expense report on time, meet fierce resistance?

"We found the answer in the research of some brilliant psychologists who’d discovered that people have two separate “systems” in their brains—a rational system and an emotional system. The rational system is a thoughtful, logical planner. The emotional system is, well, emotional—and impulsive and instinctual.

"When these two systems are in alignment, change can come quickly and easily (as when a dreamy-eyed couple gets married). When they’re not, change can be grueling (as anyone who has struggled with a diet can attest)."

In a nutshell: look for, or even better BE "the bright spot."

Kaiser: MP3 Players (41 minutes a day) #1 With Teens, Radio And Their Comupter #2 (32 Minutes Per Day)

The transformation of the cell phone into a media content delivery platform, and the widespread adoption of the iPod and other MP3 devices, have facilitated an explosion in media consumption among American youth. players.

A national survey by the Kaiser Family Foundation found that with technology allowing nearly 24-hour media access as children and teens go about their daily lives, the amount of time young people spend with entertainment media has risen dramatically, especially among minority youth.

Today, 8-18 year-olds devote an average of 7 hours and 38 minutes (7:38) to using entertainment media across a typical day (more than 53 hours a week). And because they spend so much of that time 'media multitasking' (using more than one medium at a time), they actually manage to pack a total of 10 hours and 45 minutes (10:45) worth of media content into those 7½ hours.

Generation M²: Media in the Lives of 8- to 18-Year-Olds is the third in a series of large-scale, nationally representative surveys by the Foundation about young people's media use. It includes data from all three waves of the study (1999, 2004, and 2009), and is among the largest and most comprehensive publicly available sources of information about media use among American youth.

Rethinking What We Do And How We Do Things Now Is An Imperative

Wall Street Journal writer Terry Teachout's "The New-Media Crisis of 1949," network radio's fate back then has some lessons for today:

* Network TV lost vast amounts of money in its early years. It was only because the existing ­radio networks were willing to subsidize TV that it survived—leaving CBS and NBC at the top of the heap in the '50s and '60s, just as they had been in the '30s and '40s. The old media of today have a similar chance to prosper tomorrow if they can survive the heavy financial losses that they're incurring while they develop workable new-media business models.

* Established radio performers such as Benny and Hope, who embraced TV on its own visually oriented terms, flourished well into the '60s. Everyone else—­including Fred Allen—vanished into the dumpster of entertainment history. The same fate awaits contemporary old-media figures unwilling to grapple with the challenge of the new media (including PPM), no matter how popular they may be today.

* Americans of all ages ­embraced TV unhesitatingly. They felt no loyalty to network radio, the medium that had entertained and informed them for a quarter-century. When something came along that they deemed superior, they switched off their radios without a second thought. That's the biggest lesson taught by the new-media crisis of 1949. Nostalgia, like guilt, is a rope that wears thin.

Radio ended up doing very well for the next half century after that by completely changing everything, based on how people were using it after TV took its at home audience away.

What does your listener still want from you? What problems can you solve for him/her? Many of the problems we specialized in solving yesterday are being solved now by other media, better and quicker, especially when it comes to information elements and the way we've done them for the last 50 years.

Good News

Thanks to Mary Beth Garber, President, Southern California Broadcasters Assn for doing the math!

Nielsen: Teen Media Habits Still Include Radio And Country Ranks #3

Nic Covey, director of insights for The Nielsen Company at the annual What Teens Want Conference:

Not totally lost to digital, radio is still the primary source of music consumption for 16% of teens and a secondary source for 21% of teens, globally.

Considering that teens may find themselves in older cars not yet equipped to play from their MP3 player and that radio still serves as an information source for local social happenings of extra relevance to teens, some degree of radio listenership should be expected. And while not the most popular source of audio consumption, radio preferences can still give us a broader perspective into the musical tastes of today’s teens.

In the U.S., a 2008 study by Scarborough Research showed that “Pop Contemporary Hit Radio” was the most popular format among older teens 18–20 (listened to by 40% of this segment), followed by Rhythmic Contemporary and Country.

While radio, records, 8-tracks, cassettes and CD players had their generations, this is the generation of the MP3 player. Already today, the MP3 player is the top method of music consumption for teens around the world. Thirty-nine percent of teens globally say it is their primary method of listening to music, followed not by CDs or radio, but the home computer, which is the primary source of music for 33% of teens globally. Forty-five percent of teens globally say they listen to five or more hours of music per week on their computer; 12% say they listen to 20 hours or more.

Click to read the report (pdf).

A Rational Take On The Performance Tax Battle

Jesse Walker writes:

"For decades, record companies have been begging radio stations to play their music. Sometimes they do more than beg: Few sorts of scandal reappear as reliably in the music business as a payola scandal, in which agents of the labels are caught bribing broadcasters to air their wares. In the Internet age, the AM and FM dials aren't as important to promoting music as they used to be, but they continue to play the preeminent role in the process. As Clive Davis, a dominant figure in the record industry since the '60s, told USA Today just this month, "Radio is still the leading force of determining what songs and artists break through." Now the Recording Industry Association of America and a coalition of other industry groups are backing a bill, the Performance Rights Act, that would require those same stations to pay a new fee for the right to air those records. An industry that is infamously willing to pay for airplay apparently wants to charge for airplay too."

Leave it to the libertarian publication (click to read the entire article) to place radio and the music business's Congressional battles in a very well-reasoned context.