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Selling Marketing Services Opens Digital Goldmine For Radio. With rapid advances in digital tools and platforms, small and medium size businesses (SMBs) are shifting a portion of their marketing budgets from media to marketing services. The trend represents a sizable opportunity for the growing number of radio broadcasters that have opened separate divisions devoted to offering digital marketing services to local clients. SMBs will spend $51.5 billion on local digital marketing in 2015, according to BIA/Kelsey. That’s a nice chunk of change for shops like Entercom’s SmartReach Digital and Hubbard Radio’s 2060 Digital to target, along with the more than one third of radio managers surveyed by Borrell Associates early this year that said their stations were either setting up a digital agency, planning to set one up soon, or already had one. Now new data from BIA/Kelsey shows SMBs are at the very early stages of adopting sophisticated marketing tools. One area seeing a lot of action is in building customer lists, something many radio stations are adept at. While 80% of SMBs surveyed by BIA/Kelsey use some sort of customer lists, businesses are becoming “more digitally sophisticated” in capturing information about their customers, BIA/Kelsey director of research Steve Marshall said on a webinar. That’s opened up an opportunity for digital marketing specialists to help local businesses move from customer lists into customer relationship management systems, which are currently used by only 20% of SMBs. Another area where SMBs are looking for guidance is online ad targeting. Only one-third of SMB advertisers “frequently” use targeting features in digital advertising, even though most of them have the technical capability to do so.
How Local Marketing Dollars Are Shifting. Fresh data from BIA/Kelsey’s Local Commerce Monitor tracking shows a split in how small and medium-sized businesses (SMBs) spend their marketing dollars. What the firm defines as core SMBs, those that spend $25,000 or less a year on media advertising, are spending less on media. Meanwhile, so-called “plus spenders” with larger ad budgets are mostly keeping their media spending levels intact. BIA/Kelsey director of research Steve Marshall suggests the “plus spenders” have such large budgets that they’re able to get “professional help and powerful tools,” resulting in exceptionally good results from their media spending. “Even though they’re using digital heavily, they’re plowing those savings into additional media advertising,” Marshall said. The implication for media companies, Marshall said, is that competition will increase for “plus spenders,” giving them more leverage with their media partners. “There will be a technology arms race among vendors to deliver better and more powerful tools to the high end market,” Marshall said.
Pre-’72 Royalty Lawsuits Expand to New York. Lawsuits filed by the owners of pre-1972 sound recordings against radio’s three largest companies have spread from California to New York. ABS Entertainment, which owns the rights to recordings made by Al Green, Ann Peebles and other artists, has sued iHeartMedia, CBS Radio and Cumulus Media in United States District Court for the Southern District of New York claiming they haven’t obtained performance rights licenses or paid performance royalties for those and other older recordings. The Class Action Complaints are similar to ones ABS filed in California less than two weeks ago. The latest litigation follows favorable court rulings in both states over legal action taken by The Turtles against Sirius XM Radio based on similar grounds. The major record labels followed with their own suit against the satellite broadcaster, which settled with
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the labels for $210 million. Robert Allen, one of the attorneys who represented The Turtles, is the lead plaintiff lawyer for ABS, according to The Hollywood Reporter. The ABS lawsuits argue that New York common law protects pre-‘72 recordings from unauthorized performance. They claim that New York courts have recognized the “critical, important public policy interests in providing strong state law protection for sound recordings” and that New York’s protections for sound recordings are “complete, providing exclusive ownership and rights in Pre-72 Recordings that are not limited in any way.” The new complaints put radio in the pre-‘72 crosshairs in two of the nation’s largest states. But the litigation may be put on hold, according to the Reporter, pending a Second Circuit Court of Appeals decision on whether pre-’72 sound recording owners have public performance rights under state law.
FCC Schedules Vote On Updated Contest Rules. The Federal Communications Commission has scheduled a vote for an order that would update its 40-year old contest regulations to give radio and TV stations the option of posting contest rules online, instead of broadcasting them. Chairman Tom Wheeler has put “Modernizing Contest Rules” on the tentative agenda for the September open Commission meeting scheduled for Thursday, September 17. Wheeler earlier circulated the order among the commissioners. Championed by commissioner Michael O’Rielly, the 2014 proposed rulemaking to bring the rules into the digital age already has unanimous commission support. Broadcasters will no doubt be anxious to learn the specifics of the Report and Order. The National Association of Broadcasters has asked the Commission to not require air personalities to mention the station website each time they talk up a contest, since that can happen multiple times per hour, and trigger the requirement—according to NAB estimates—hundreds of times per week. A better solution, according to the NAB, would be to require broadcasters to periodically announce the URL. Broadcasters have also pushed for stations needing to only mention a home page rather than a lengthy URL string that few would remember.
UBS: Ad Spending Grew 7.3% In July. In a positive sign for the media industry, ad spending is trending upward. According to a new report from UBS, media ad spending grew a “robust” 7.3% in July 2015, compared to July 2014, a positive swing after several months of decelerated ad spending. Digital media ad spending grew 31% in July, compared to a year ago. That’s its fastest growth rate in more than a year and demonstrates media buyer enthusiasm for online and mobile advertising. TV, in contrast, experienced a 1.5% dip in ad spending in July, compared to a year ago, although it is the smallest decline in recent months and comes after a 7% decline in June. UBS notes that July was the 13th month in a row of TV losing share of agency spending with TV now at a 50% share. Digital, in contrast, grew to a 34% share last month, its largest year-over-year gain. Within digital advertising, UBS notes that more advertisers are shifting dollars to social and video, and spending less on direct-sold display and search ads. Among pure play digital categories, Internet radio ad spending grew 36.3% in July to a 2.7% share of spending.
Competitive Info: TV Losing Ad Dollars. July marked the first time retailers and consumer electronics manufacturers spent more money on digital advertising than on television, according to the UBS report on July media ad spending. While the telecom and food categories are spending more on digital, UBS notes television held on to its share of automotive and financial services advertising. Overall, July produced mixed results for advertising spending among the top 10 categories, with five increasing spending and the remainder trimming their budgets. In July, automotive, pharmaceuticals, restaurants, telecom and media/entertainment all upped their media allocations compared to July 2014, while beauty, consumer electronics, food, financial services and retail spent less than a year ago.
CBS Radio, ESPN Join Podcast Upfronts. CBS Radio and ESPN will participate in the Interactive Advertising Bureau’s first podcast upfronts next month in New York. The two companies are among the first commercial radio broadcasters to commit to the event, which also includes podcast networks, measurement services and pubcasters NPR and news/talk WNYC-FM, New York (93.9). Each of the participants will get 20 minutes to preview their latest programming for advertisers and media buyers.
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Among other offerings, CBS is expected to tout “The Taz Show: Body Slams & Beyond,” the freshly launched daily sports and entertainment talk show hosted by former pro-wrestling champion Taz that lives on its play.it platform. The audience for play.it increased 30% since January, CBS Local Digital Media president Ezra Kucharz told Reuters. Podcasting is getting the Upfront treatment as usage of on-demand audio is on the rise. More than 46 million Americans download at least one podcast per month, according to numbers released in June by Edison Research. Ad spending for digital radio, which includes streaming music services and podcasting, is forecast to climb 28% to $2.75 billion in 2015, according to eMarketer. Podcasts account for small double-digit millions of that, according to eMarketer analyst Paul Verna. “It’s a blip on the radar... but it’s becoming a bigger blip,” he told Reuters. Propelled in part by the runaway success of NPR’s “Serial,” marketers are attracted to the passionate, engaged, affluent nature of podcast audiences. Cost-per-thousands are estimated by podcast network Midroll Media to be in the $15 to $30 range.
Florida LPFM Pushes Back Against Beasley. A Tampa-area low power FM has asked the FCC to dismiss a complaint made by Beasley Media Group that claimed the station isn’t living up to its obligation to operate in a way that advances an education program. Beasley, which owns Spanish CHR “92.5 Maxima FM” WYUU in the market, requested that 100-watt WVVF-LP, licensed to Town N’ Country, FL, be ordered to suspend operations until it can provide the live poetry, daily cultural programs, community calendar and other features it promised in its application for a construction permit. In its response, WVVF-LP licensee Hispanic Arts of Tampa (HAT) said there is “no law or Commission precedent” to support Beasley’s request that the station’s operational authority be suspended until all of its programming elements are available for broadcast. It also asked the Commission to find that Beasley has “with full intent, attempted to manipulate the Commission’s processes” to eliminate a competitor and drain its “limited resources” by filing a “baseless complaint.” Beasley’s complaint stated that the station primarily aired music and promoted itself as a “Latin Classic Hits”-formatted station that competes with commercial stations in the Tampa market. HAT defended its branding and positioning as necessities to stand out in a crowded marketplace, noting that PBS stations “utilize strong branding and positioning.” Claiming to operate on “a shoe-string budget,” HAT said it intends to add news and weather in October, followed later by poetry and story reading as the station grows. “It is illogical and unreasonable to expect a low budget, low power FM station to sign-on the air with all of its intended program elements in place,” HAT said.
NYMRAD Sees New York Commuters As ‘Captive Audience.’ Of the 4.5 million people who commute to work in New York City, a majority take public transportation. But more than one million of these commuters drive to work, and of them, one third spend over 45 minutes getting to work every day. According to New York Market Radio (NYMRAD), that gives brands “huge opportunities to use radio to reach a captive audience.” The crowd that drives into the city for work is slightly older, per NYMRAD, with a median age of 45 compared to 39 for those who take public transportation. They’re wealthier (median salary of $50,487 vs. $41,656) and predominantly male (62.2%). “Brands thus have a prime opportunity to target this predominantly male audience,” the trade group says in its quarterly State of the Market report. The report also debunks the myth that with such a high concentration of public transportation users, radio isn’t an effective way to reach New Yorkers. NYMRAD notes that radio reaches 90% of New Yorkers weekly, who spend an average of 9 hours and 45 minutes per week with the medium, making radio’s reach larger than any daily or Sunday newspaper in the market. With a quarter of the New York population Black and 28.7% Hispanic, it makes the case that radio is one of the best channels to target these groups. Hispanics and Blacks are more likely than the general population to respond to campaign exposure (Hispanics are 22% more likely, 19% for Blacks).
KC’s KRBZ Generates Buzz With Billboard Campaign. “Be Kind.” That simple mantra is the response from “96.5 The Buzz” KRBZ, Kansas City to “homophobic” billboards that have appeared around the market. The Entercom modern rocker is raising funds via Kickstarter to erect its own billboards promoting tolerance and inclusiveness. After just a few days, the station’s “Love Longer” initiative quickly surpassed its goal of $7,000 and has raised upwards of $16,000. “Hopefully this will serve as
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a reminder to everyone that our city isn’t full of ignorant people and we should treat each other kindly,” the station’s Kickstarter page explains. KRBZ says its billboard will mirror stickers the station hands out featuring the message “Be Kind” over a rainbow flag background. So far, about 900 individuals have contributed to the crowdfunding effort, and the station plans to print their first names on the billboard. Social media is playing a major part, with KRBZ’s Facebook and Twitter pages promoting the campaign and pointing viewers to the Kickstarter page. The station refers to its loyal social media following as its “Buzz Family” — which has its own hashtag #buzzfamily — and is rallying those fans to support the effort. The campaign is receiving widespread media coverage, including a Huffington Post story that said, “Kudos to 96.5 The Buzz for using its influence in KC to spread love and kindness, not negativity and hate.”
Beasley Breaks Talk Radio Mold With New Vegas Morning Show. Looking to inject some fresh energy into morning drive, Beasley Media’s “News Talk 720” KDWN, Las Vegas is calling up two hosts who break the usual talk radio mold. The station’s new “Live in Las Vegas” show, airing from 6am-9am, features host Dave Carney, a former pro football exec, hockey announcer and sports radio veteran, with former “Jack FM” personality Chad Forester, who also has been a morning producer, operations manager and sports anchor. Their breadth of experiences come together for a “diverse, lively” – and lighter – news/talk show, according to program director John Shafer. The hosts will mix “insight, wisdom and witty remarks, with large doses of comic relief, mixed with controversial commentary on issues ranging from sports to politics to breaking news,” Shafer said in a statement. Carney’s voice will be well-known to many Las Vegas listeners. Since 2007, he has hosted or co-hosted several shows in the market, including an ESPN Radio show, “The Jim Fassel Show,” with former New York Giants head coach Jim Fassel. Carney is also the voice of the Las Vegas Wranglers pro hockey team. For his part, Forster has worked a number of jobs in the Las Vegas area, including most recently as operations manager and morning sports anchor for CBS Radio’s news/talk KXNT-FM (100.5). Previously, when KXNT was a Jack FM station, Forster served as assistant program director, writer and station personality “Chad the Intern.” For his part, Forster says he is “looking forward to bringing Las Vegas a funny, and interesting look into the news.”
New Orleans Says Hello to New Rock. For the second time in less than a week, a group has sacrificed sports on FM to plug a market void for modern rock. This time it’s Cumulus Media in New Orleans, which cashed out “106.1 the Ticket” WMTI yesterday to launch “106.1 the underground alternative.” The new station gives acts like Walk The Moon, Foo Fighters, The Black Keys, Fall Out Boy, Imagine Dragons, Muse and Mumford & Sons a new home on the dial in the Big Easy, which is dominated by a trio of top-rated urban stations. “We plan to give the French Quarter, the Delta and beyond a unique alternative experience 24/7,” Troy Hanson, corporate programming/rock formats for Cumulus, said in a press release. The station promises “106 minutes of New Rock for New Orleans every day.” “If there is any city that deserves a great Alt brand, it is New Orleans,” Cumulus SVP Jeff Brown said. “Fans of Alternative Rock are fiercely loyal, incredibly engaged, and in the age of acquisition.” The flip follows Entercom’s breakup of the sports simulcast at its Miami cluster on Friday to launch modern rock “104.3 The Shark.”
Emmis-New York Unveils ‘Gospel Explosion’ Lineup. Emmis-New York has announced the lineup for the Gospel Explosion concert that caps off its annual two-day Circle of Sisters expo for women of color. Tasha Cobbs, Tina Campbell, Casey J., Brian Courtney Wilson, Karen Clarke Sheard, and Anthony Brown & group therapy will perform October 18th at New York’s Jacob Javits Center. The ticketed two-day expo ($20 in advance, $25 day of show) has become a tent pole event for urban AC WBLS (107.5), rhythmic CHR “Hot 97” WQHT and gospel WLIB (1190). Drawing crowds of around 50,000, it’s intended to bring women of color together to celebrate one another’s businesses, discuss relationships, health trends and financial advice, and catch-up on the latest fashion styles. Emmis fills the convention center with vendors, panels and breakout sessions discussing a range of topics from marriage advice from celebrity couples to best social media practices for children to understanding health insurance. The stations broadcast live from the event. Saturday night culminates in an R&B concert at the Theatre at Madison Square Garden, while Sunday concludes with the Gospel Explosion at the Jacob Javits Center.
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Five Questions With… Paul Brenner On the heels of commitments from AT&T and T-Mobile to activate FM chips in smartphones on their networks, NextRadio is seeing years of planning and effort become scalable, sellable business opportunities for its local radio partners. NextRadio president Paul Brenner spoke to Inside Radio about the company’s recent wins, interactive advertising, and how NextRadio is helping transform terrestrial radio from a legacy media into a technology player.
IR: Coming off the AT&T and T-Mobile commitments, how are you using the momentum to sway other carriers to activate NextRadio?
We have completely eliminated the myth that this is too difficult and too expensive to do. We are able to say: “If you just cooperate, this is not hard to accomplish and your benefits are bigger than your risk.” Carriers really do believe that the radio industry may actually be working together. It is easier to make business deals when you put a model in front of them that seems more legitimate. Through the www.freeradioonmyphone.org website, which was what the spot campaign promoted, we had 57,000 T-Mobile customers that wanted us to let them know when NextRadio was coming to their carrier. We used radio first, and then social media tools, in a more progressive way to get someone like [T-Mobile CEO] John Legere to pay attention. That was enough for it to matter to him.
IR: What will it take to get other carriers — namely Verizon — on board? What about Apple?The last big one probably doesn’t want to be the last big one. We just have to keep pressing. They are the most political of all the carriers, as far as regulatory goes. But, if the industry continues to build content and support this through marketing, I have a hard time believing we’re not in a pretty deep discussion within six months. The best way to get Apple is to help ourselves. The more stations that are participating in album art and interactivity, the more Apple is going to pay attention because it is going to be a better product. That’s really all Apple cares about. They want to know: Does it work the same for a listener and user in New York as it does in Bozeman, MT? Are they getting the same experience? We have to help them replicate that kind of consistency.
IR: You’re working on trial ad campaigns to demonstrate Next Radio’s interactivity. How are the tests going?They are going fantastically. Doing one with Allstate, another with a record label and we have a few more lined up. What they’re learning is equivalent to what the set top box or the internet have done for them. Do you have any idea what that means to a marketer? They just bought radio on a cost per point basis but the results you showed are performance by daypart, demographic, city, conversion to integration, call to action. You’ve now shown them what their audience did when they heard the commercial. That is a complete game-changer for the way our industry is perceived. They’re still staying in radio. This shouldn’t freak anyone out. It is actually the opposite of that. Now, it is: “I should put more money in because I can use it as way to make marketing decisions and validate what I’ve tried.” It makes them smarter. It would be like radio keeping their $17.5 billion in advertising revenue and now dipping over to the $12 billion mobile ad space and it is all native and not streaming.
IR: How is NextRadio helping improve radio’s perception?Huffington Post said Next Radio is an innovation every artist and musician should care about. PC Magazine said we are creating the next big thing for the consumer. Advertising agencies are calling us and waiting for scale. Record labels think we have created something completely unique out of the power of radio. All these constituencies still view us, local radio, as very important in their lives. Now, they can see how it naturally translates to their smartphone. As an industry, you want to grow listening again, you want revenue to come back. You want people to feel like we’re not a legacy industry, we want to be viewed as a tech industry. That’s really the only way you can reinvigorate investment and get people paying attention to you.
IR: So how is industry participation and support shaping up? Groups have definitely come around with the announcements of AT&T and T-Mobile. There are 11,000 radio stations in America and we have about 2,000 providing content that is interactive. Those 2,000 stations represent the largest markets and highest percentage of population. Clearly, there is room for growth. There is room for medium and small broadcasters, especially with the price we’ve built with the NAB at $35 a month. The most common issue is not price, it is resources. They have a lot of things they try and they have very few people to do it. We keep making it easier for them.
What’s Next? Find out how many NextRadio-enabled phones are expected to be in the market by year-end, the revenue impact and why listening sessions are longer, only at InsideRadio.com
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