A few weeks ago I was driving in my car listening to NPR during a pledge drive. As I listened to the announcer hawk mugs and even special solar/crank powered radios in exchange for signing up for a monthly “pledge” and heard him referring to donors as members, I realized that public radio is actually selling subscriptions, but calling it something else.
As we know, NPR is an audio service supported by its members (as well as some other revenue sources). In 2011, which was the most recent year I could find info for – NPR received an average weekly donation of just under ten bucks per listener per week. (That’s the total $ amount of pledges divided by listeners and weeks.)
While Pandora One and Spotify struggle to get users to pay less than $10 a month for their service, NPR manages just fine, netting 4 times that per listener.
Why is NPR is so successful at getting listeners to pay for programming? For one thing, they don’t call them subscription fees. Instead, they call them pledges – a far more honorable term, and they make every listener who donates a member, and send them a hat or a mug. It’s a clever marketing approach!
What else are they doing that online audio subscription services can do as well? Well, for one, they hold annoying on-air pledge drives, where they stop the programming, not for a few short commercials, but for highly intrusive on-air begging by personalities. It’s really obnoxious, and it works. Listeners respond.
Other tactics that NPR uses to extract donations – err, I mean pledges – from its listeners include bribery (as in the mug, hat, or solar powered radio mentioned above), flattery (our listeners like you are so smart), making listeners feel guilty, and – this is the best one – threatening to continue the on-air fundraising tirade unless everyone calls in with pledges right away.
So what can subscription services learn from NPR? I think the membership approach is a good one – remember the old American Express campaign “Membership has its privileges?” Creating a strong brand that people want to associate themselves with, and then selling that association – that seems to be a formula that works for public radio and a strategy subscription services may want to go to school on…
Earlier this week, RAINNews reported that an FM station in Boston – WKLB – is running spots for iTunes Radio. The spots are live reads, done by radio station personalities, and they sound like this.
When asked, the station, owned by Greater Media, issued some statement that kind of sounded like: “if you can’t beat ’em, join ’em.” This doesn’t seem like an especially well thought out strategy for a company that owns a bunch of nicely branded radio stations with loyal listeners. Apparently, the requirements for the ad campaign from iTunes Radio included guaranteeing first in a commercial stop-set placement, and live reads (also known as endorsements) by radio station personalities.
The first time I listened to the live ad, I could barely believe my ears. I played it for my husband (who is not in the industry), and he couldn’t believe it either. A radio station personality literally encouraging its listeners to listen to something else, going on and on about how great it is!
Years ago, I worked at WTIC AM in Hartford, one of the best AM radio stations in the country. At one point, that radio station’s morning show with Bob Steele had a 60 share of the market. When I worked there, Steele was retired, and we ONLY had about a 20 share in morning drive. We charged a lot of money for those spots, and live reads went for a huge premium, because we understood the value of them. Live endorsements by radio station personalities are very effective. So I’m guessing that iTunes is paying a lot for these spots.
Yesterday Edison Research and Triton Digital did an initial webinar release of their Infinite Dial update. iTunes Radio makes its debut in the study, having launched just last fall. And they’re off to an impressive start, with 8% of persons 12+ in the US saying they listened in the past month.
And that’s before broadcast personalities started telling their audiences how swell it is…
It’s press release week – err, I mean CES week – in our industry this week, a time when lots of folks gather in Vegas for the Consumer Electronics Show, and announce innovative products and projects. I don’t mean to belittle the announcements, some of which sound very promising. But it’s kind of a shame that it all has to be condensed into one week.
In any event, two announcements in particular caught my attention yesterday. First, an announcement by AdsWizz and Aha by Harman, who have partnered to deliver ads. Aha has a strong foothold in the automotive market – in some 50 car models by 14 manufacturers. The AdsWizz piece enables audience targeting based not only on the usual age/gender demographics, but also including location, make and model of the car.
Pandora‘s announcement yesterday concerned similar innovations – rolling out in-car audio advertising that enables advertisers to target listeners who are listening in their cars. Ford, BP, State Farm and Taco Bell are national brands that are targeting Pandora listeners in their cars. More than 4 million unique users have activated Pandora through a native integration in a car.
Streaming audio services continue to refine their ability to deliver ads to consumers with precision, enhancing advertiser impressions by doing so. Increased targetability creates increased value for the advertiser by boosting an ad’s return on investment, and that’s a great place for our industry to focus innovative energy..
Digital revenue is the bright spot for radio according to the newest revenue data out late last Friday from the Radio Advertising Bureau. Digital revenues grew 16% over last year’s second quarter and are up 13% for the year. Serious attrition continues for network dollars which are down 4% for 2Q and the year. Digital is now poised to overtake network’s share of radio’s revenue pie.
The big elephant in the room is spot radio, which was only flat for the quarter but is still off 1% for the year. Of course this is not a good trend in the face of a modestly recovering economy. Ad revenues continue to shift to online and mobile media, as evidenced by the growth of radio’s digital revenues.
In a move that is likely a reaction to news like this, Clear Channel, which owns Katz Radio, the sales firm that controls the lion’s share of national spot revenues, has just signed on with IPG, one of the largest ad agencies, to build an automatic buying platform for radio inventory. According to Mediapost, “The initiative, which was developed by Interpublic’s Mediabrands unit, is dubbed the Magna Consortium, and is part of the agency holding company’s mission to automate 50% of its media-buying by 2016.”
Jacobs Media has updated its annual Tech Survey, which is a study of the media habits of core radio users. It’s a study that has 9 years under its belt now, so it’s a great chance to take a look at trends.
In the big picture of how media stack up in terms of usage, there’s been a pretty big shift, with people using AM/FM an hour or more a day dropping below 90% into fourth place behind TV since the release of last year’s results. AM/FM fell 3% in a year, which is a shift that is hard to ignore. Meanwhile, usage of Internet radio weekly or more jumped 7% year to year to 45%. Last year’s survey results assigned 18% of Internet radio’s 38% to Pandora, but this year’s results don’t offer specifics on Pandora’s share.
One of the salient takeaways from this study is that listeners are connecting with radio across a more diverse set of technologies. Jacobs Media President Fred Jacobs says it’s about “radio’s ability to uniquely connect with consumers on their preferred platform.” This survey of radio users is telling us loud and clear that they want to be able to access content across a diverse offering of media and devices.
RAIN Summits, the premiere educational and networking events for the Internet radio and online audio industry, have announced the agenda for RAIN Summit Europe on May 23 in Brussels. The largest gathering of its kind in Europe, RAIN Summit Europe’s speaker list features a diverse list of web radio professionals from most countries and provides an excellent opportunity for the industry to share expertise.
RAIN Summit Europe will take place at the award-winning Hotel Bloom! in Brussels. The pan-European conference will be a day-long event, including thought provoking panels and presentations, insightful speakers, and engaging networking opportunities. Executives from many different European countries will share thoughts and ideas on the future of radio in the digital world.
RAIN Summit Europe will feature a list of speakers who are experts on various aspects of the field of streaming radio. Featured speakers at the conference in May include:
- David Deslandes, Deezer, France
- Simon Gooch, SBS Radio Sweden/Radio Play, Sweden
- James Cridland, Media UK, United Kingdom
- Ali Abhary, Spectrum Medya, Turkey
- Kjartan Slette, WiMP, Norway
- Christian Schalt, KISS FM/Radio Service Berlin, Germany
- Jan-Willem Brüggenwirth, 538Group, Netherlands
- Jean Pierre Cassaing, Havas Media, France
- Alain Reyes, NRJ Audio, France
- Joel Ronez, Radio France, France
- Steve Whilton, Last.fm, United Kingdom
- Caroline Grazé, NRJ, Germany
- Lubor Zoufal, Lagardère Active ČR, Czech Republic
- Paula Cordeiro, RTP, Universidade Tecnica de Lisboa, Portugal
“This agenda features an excellent complement of speakers from across Europe for a full day of panels, presentations and networking that endeavors to advance the business prospects for online audio,” said Jennifer Lane, President of RAIN Summits.
“In Europe today, Internet radio is an extremely vibrant and fast-growing media segment, with many of the top AM/FM broadcasters actively participating in the category along with a number of innovative entrepreneurs,” said Kurt Hanson, Publisher of RAIN: Radio and Internet Newsletter. “Last year’s RAIN Summit Europe, in Berlin, attracted a very high caliber of both speakers and attendees. This year, we’re excited to bring RAIN Summit Europe to the business capital of Europe, Brussels, and our agenda is shaping up to be our best yet!”
For more information on the agenda and speakers, visit the RAIN Summit Europe website
News that Nielsen will purchase Arbitron is good news for online radio services like Pandora. Nielsen, which measures many media segments, already has a strong foothold in digital and cross platform measurement, not only in the US but globally. Yesterday’s announcement that they will purchase Arbitron was quickly followed by statements that they will measure online radio services like Pandora as well.
I call this excellent news. Arbitron, which has dallied in Internet radio measurement several times in the past, recently denied Pandora a place at the table when they sought to be measured alongside broadcast radio counterparts. Pressure from those broadcasters, who spend a lot of money with Arbitron, certainly appeared to be one of the reasons that the company decided to measure streaming only as an adjunct to broadcasts. That decision enraged advertising agencies as well as online only services.
I think Nielsen’s entry into radio and digital audio measurement would be an excellent thing for the marketplace. Their multi-media measurement platform and global footprint likely mean that broadcasters won’t be able to flex their muscle to influence company decisions that are better made with a broad perspective. Nielsen is a company that understands that today’s advertisers need measurement tools that can enable accurate media placement across many platforms and technologies. Folding radio into that mix can benefit radio as advertisers are able to view it as an important part of a larger multi media landscape.
In the states where the races for the presidential election were the closest, radio advertising made the difference. According to an article in Politico last week, both candidates used radio to target specific segments of the population, with Obama spending quite a bit more than Romney. The article, which is also very nicely summarized by Fred Jacobs in his blog, notes that the campaigns saw radio as a way to reach voters who were not extremely political and might not be tuning into polls on a daily basis. As well, radio ads were a strategy for reaching busy younger adult women who spend lots of time in the car tuning in.
A nifty infographic that TuneIn, the Internet radio portal, sent me shows that voters likely to favor Obama were indeed listening to radio. Radio was a key strategy for the campaigns in swing states, with the Obama campaign airing a series of tailored radio ads for eight key states, targeting Paul Ryan, including specific ads relevant for Virginia, Colorado, Florida and Nevada starting in August, and Romney using swing-state radio ads to knock President Obama over his ” bayonets and horses” quip during the final presidential debate.
TuneIn looked specifically at how many listeners were tuning into political talk programming during the month of October and found more listening to liberal (so-called) democratic programming. Indeed, their data, which they sent me on Monday, largely predicted the outcome in most of the key swing states…
Triton Digital and Alan Burns and Associates recently released a new study Radio Tomorrow which focuses on listener attitudes and behavior with a focus on future prospects for the medium. It’s a dense study with a lot of interesting questions in it. For example,
25% of those asked stream music on a smartphone daily from AM/FM, Pandora and other sources, and the number climbs to almost 40% weekly. Pandora alone claims 11% daily and 15% weekly in terms of people using it, per the study.
Some of the news in the study is predictable: young people listen to radio less, want more control of their stations.
Some of it is less so – for example, the study found that 44% of listeners would be more likely to buy a phone if it had an FM chip in it. And of the nearly 20% who have internet access in their cars, many still listen to AM/FM (70%).
When asked if there is a medium that feels like a friend, 50% named RADIO. And they find radio ads more trustworthy and less annoying.
If you haven’t taken a look at this study you should. There’s meaningful takeaways for anyone programming a station, online or not…