Tag Archives: Radio

Internet Radio Ads Net High Response Rates

Targetspot has updated its yearly study of Internet radio listeners. The newly released information was first presented at RAIN Summit West by Targetspot CEO Eyal Goldwerger. Today, the company made the whitepaper more widely available on its website.

The benchmark study, done by Parks Associates and with the support of the Interactive Advertising Bureau, was first released at last year’s RAIN Summit West. Results of this year’s update show increased listening, particularly to mobile devices, along with increased social activity and response to audio ads.

The findings are all good – the audience is growing, taking Internet radio with them on mobile devices and sharing it with friends on social platforms. Listeners are interacting with their stations, and that’s having a very positive impact on advertising as well. Ad recall and response rates increased 11% since last year, with 58% recalling having seen or heard an Internet Radio ad within the last 30 days compared to 52% in 2011. Of those listeners, 44% responded to an Internet Radio ad in one way or another compared to 40% in 2011, a 10% increase versus last year.

Pandora Panderings in the News

It’s been a strong news week for Pandora, which is not unusual – the service has a great strategy for maintaining visibility in the media. That’s good for their brand and all of Internet radio by-the-way.

They recently released some new data from a study done by The Media Audit surveying 54,000 people in Los Angeles about their radio listening affinities. As reported in the LA Times, “Pandora beat out local stations such as KIIS-FM, KNX-AM4, KROQ-FM5 and KOST-FM in the survey of 54,000 adults who were asked in the biennial phone poll, in October, what stations they had listened to in the previous week.” In fact, “The research group estimated that 1.9-million people in Los Angeles listened to Pandora between September and October of 2011. The No. 2 station, KIIS-FM, garnered 1.4-million listeners in the same time frame, according to the survey.”

This caused the Huffington Post to headline an article with the proclamation that Pandora is the Number One Radio Station in LA. I’m sure the folks at Pandora were very happy about that.

Meanwhile, Inside Radio, a publication owned by Clear Channel which owns Pandora competitor iHeartRadio, was busy covering a story about more research on Pandora’s listeners. Mark Kassoff and Company, a radio programming research company, surveyed 1,177 Pandora listeners, asking them just what they like so much about the service. Their  conclusion? Pandora listeners are control freaks. And that’s the headline that Inside Radio chose for their coverage of the info.

Now, despite the headline, the Kassoff data is actually pretty good – revealing to those that read past the opening sentence that people like the personalizable options that Pandora gives to listeners. Kassoff goes on to examine in his survey the ways that Pandora and FM are different, and encourage broadcasters to focus on those differences. Which is a great conclusion for his study..

Pandora, Spotify Discuss Ad Dollars at RAIN Summit West

Robin Flynn of SNL Kagan hosted a panel discussion called “Charting Digital Audio Ad Dollars” at RAIN Summit West on April 15th. Advertising is on the upsurge, she concludes, and cpms are solid.

Mitchell, Van de Wyer and Kritzman on stage at RAIN Summit West

Pandora SVP of ad sales Steven Kritzman, Katz Online President Brian Benedik, Spotify VP of ad sales Jon Mitchell and Alexis Van de Wyer, President of Adswizz, Inc. were the panelists contributing to the panel hosted by Flynn.

There is a healthy interest in advertising on Internet radio, and the cpms are getting stronger. Contributing to the interest is Internet radio’s ability to deliver key groups such as 18-34 year olds, Hispanics and upper income groups. Advertisers from many leading categories are now active in Internet radio, including finance and entertainment along with auto, restaurant and retail. Mitchell said that Spotify has 1,400 different advertisers.

Nonetheless, audio ads continue to be under monetized. Campaigns that include video in the mix with audio will produce a higher cpm overall, but targeted local campaigns are also pulling higher cpms. Benedik estimated that while generally network radio CPMs are $4 to $6, he said that geo-targeted campaigns can boost CPMs to $6 to $12.

Local advertising is gaining interest on Internet radio, led by the precise targeting abilities of Pandora. Thanks to listener registration, platforms like Pandora and Spotify can target by listener demographics, geographics, or taste in music. Benedik is looking for local revenues from political campaigns this year to be healthy.

The group acknowledged that monetizing audio effectively remains a challenge. Flynn notes: “Given that 70% of Pandora’s listeners listen on a mobile device, Kritzman said, the company is working hard to better monetize those listeners. Pandora execs have recently said the company’s RPMs, or revenue per 1,000 listening hours, are $60 to $70 for its desktop Internet business versus $20 for the mobile side, but mobile is expected to catch up.”

Innovating the Radio Industry Online

Last week in an interview with CNET, Michael Robertson talked about how his TiVo-for-radio service DAR.fm is good for the radio industry. DAR.fm lets subscribers record shows from a listing of 5000 stations and 20,000 programs. Those shows are then streamed or downloaded to a personalized list of devices.

Robertson’s goal is to build a better distribution platform to keep radio relevant. No stranger to the idea of ruffling a few feathers, Robertson is well known to the industry as the guy that built MP3.com and got sued by all the major record labels for copyright infringement. He later sold the service to Vivendi Universal for $385 million. 

Now Robertson’s pursuing his vision with DAR.fm, focusing on the intersection of technology and the radio industry. “It’s going to be fascinating to see what happens in the radio business over the next three to five years,” Robertson said last week in an interview with CNET. “This is a car accident waiting to happen. You have traditional broadcast radio, Sirius XM (satellite radio), and the Internet start-ups such as Pandora. They are all approaching the audio business with different assets, different royalty structures, and they’re going to realize that they’re all in the same business. They think of themselves as separate right now but everything is going IP.”

On April 15th RAIN Summit West will take place in Las Vegas and host an entire day of interesting conversations about topics like this. Michael Robertson will participate on a panel called The Streaming Music Landscape. Other interesting panels include Innovating the News/Talk Format Online, Personalizable Radio, Charting Digital Audio Ad Dollars, and others. You can get a look at the complete agenda here. See you there!

Radio’s Growing Online Revenues at a Double Digit Pace

Local radio stations grew online revenue at a 15% pace in 2011. Total industry online revenues were $439 million, according to a new report by BIA Kelsey. 

According to BIA Kelsey, radio’s ability to create and sell local content, combined with the ability to cross promote on and off air, has “has given broadcast stations the opportunity to expand their position in their local markets from solely an over-the-air media source to a local media company that can provide access to local audiences in different, effective ways for their advertiser clients.”

In fact, local content assets, sold by a trained local sales team, are the combined forces that will enable local radio stations to grow online revenue to $767 million by 2016. BIA Kelsey predicts a steady 11.8% growth rate 2012 – 2016.

 

Time For Radio To Go Digital

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HD Radio has made no progress in the last couple of years in terms of raising awareness, according to a recent study by Mark Kassof and Company. In fact, according to the report, “Awareness has actually declined. In ’08, 67% had at least ‘heard of’ HD RADIO; now, 54% do. And consumers’ understanding (and misunderstanding) of HD is virtually identical to what we found three-plus years ago.”

While people who have heard of it seem to understand what it is – that understanding seems to come mostly from the “HD” which – thanks to tv technology, is easily understood as high definition. Very few understand that it is much more than that, more channels and choice, music tagging, traffic and other innovations.

Bob Struble, President and CEO of Ibiquity, the HD Radio company, recently noted that AM/FM radio was the only analog technology on display at this year’s Consumer Electronics Show. He was distressed to note that “AM/FM radio[was] the only analog technology remaining at CES, everything else [was]digital.”

Struble notes that many other industries have already advanced to digital. “Broadcast and cable television, mobile phones, audio and video physical media, … all were analog, now are digital.” Digital technology provides a better customer experience, and that has spurred competition. Automakers were on display in force, thanks to the exciting developments with a digital dashboard.

The reason awareness of HD Radio is so low is because so few broadcasters have invested, adopted and promoted it. Thinking their position on AM/FM dials was secure, they never felt the urgency to spend a lot of money improving the quality of their offering. As connected devices in dashboards become more ubiquitous, radio’s final bastion will be challenged.

Pandora’s Local Market Clout

Pandora released audience data today showing that they have grown their audience by 50% or more in top markets across the country in the past year. Releasing data that compares January’s audience stats with “holiday 2011” stats, Pandora now claims to have a 1.0 rating with Adults 18-34 in top markets across the country. 

The report uses audience information provided by Pandora and analyzed by Edison Research using methodology that resembles that used by Arbitron, however, they make no specific comparisons to Arbitron’s reports or other stations in their press release. Releasing audience data in this form enables advertisers and agencies to assimilate Pandora’s audience reach with traditional broadcast radio stations’ reach. This assimilation of data and direct comparison to broadcast audience data is precisely the kind of thing that some broadcasters are trying to prevent.

It’s a powerful statement about Pandora’s popularity that they are able to deliver a 1.0 rating in all of the top ten markets in the US with Adults 18-34. You can read the press release here.

 

Arbitron’s Internet Radio Measurement Headache

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In 2003 I started a company called Net Radio Sales that was designed, in large part, to offer a sales solution to streaming broadcast radio stations. Later that year I met with an Arbitron executive to discuss their decision to shut down server based streaming measurement and shift to census based measurement through comScore. I told Arbitron that broadcasters in particular would suffer from that because their streaming audiences were small and local, and would never show up on a national panel. At the time, Arbitron told me that they had two clients  (AOL and Yahoo) who were pushing them to move to panel based measurement, and since they were the only two paying clients, the decision had been made. They shuttered Measurecast and moved to estimating streaming audiences based on comScore panel behavior. In case you don’t know the rest, a few years later they abandoned that game as well.

I’ll bet Arbitron wishes they had stayed in server based streaming measurement way back then, because what they had was a platform that measured everyone – streaming broadcast and online only stations, all together. Which brings us to the topic of the day. Now, Arbitron has a bunch of clients who want things done a certain way. Again. This time it’s their broadcast radio clients, and they want Arbitron to measure streaming broadcast stations and online only stations separately. Not just separately but differently, so that the ratings cannot be easily combined.

It’s a problem for Arbitron because their broadcast radio clients pay them a lot of money and they don’t want to alienate them. Those clients want Arbitron to measure their streams – in such a way that they can roll up their broadcast and streaming audiences into one and sell that total audience to advertisers. And they don’t want to be compared to online stations.

And then we have Pandora. Pandora has a large audience – large enough that they can now claim to have more listeners in many markets than some broadcast stations. And they are claiming that – by working with research firm Edison Research, who has helped them crunch numbers and make comparisons. Using standard calculations that are not proprietary.

Under pressure from its clients, Arbitron recently sent out a letter intended to dissuade buyers from using the data that Pandora, with the help of Edison, has been releasing, stating: “We strongly advise clients to avoid comparing self-reported audience estimates from Internet music services to Arbitron radio audience estimates…” They offer several reasons why it’s a bad idea, including claiming that there’s no way to know if anyone is really listening. Really. The most overused objection to radio, the objection that every salesperson in the world learned to overcome in Radio 101? I just really think it’s the pot calling the kettle black on that one. {Editor’s note: unfortunately, the letter has been deleted from the news site where it was posted}.

But on to the thing that really concerns me. Arbitron says comparisons between broadcast streams and online streams can’t be made because there is a vast difference between “one to one” and “one to many” streaming audiences. They’ve created an imaginary line to justify measuring the two categories separately and differently. Supposedly, because “one to many” audiences are all exposed to the message simultaneously while “one to one” listeners are exposed to the message during their unique sessions, the data is different and cannot be assimilated.

Huh?

“This is an absolutely meaningless distinction”  says Kurt Hanson, Publisher of RAIN: Radio and Internet Newsletter and Founder of AccuRadio, an online station. “Case in point: If Samuel Adams wants to deliver  one million impressions of a commercial to listeners in the 4pm hour next Friday (to use a simplified example), they can either buy (A) a couple dozen top AM/FM radio stations, in which case the WAAA listeners will hear it at 4:08pm, the WBBB listeners will hear it at 4:10pm, the WCCC listeners will hear it at 4:13pm, and so forth, or (B) they can buy their desired demographic slice of the audience of a brand like Pandora, in which case some listeners will hear it at 4:01pm, some will hear it at 4:02pm, and so forth.  In BOTH scenarios, not all of the target consumers are hearing the spot at the same exact moment!  That’s never been important to the advertiser.  Both scenarios are precisely the same, in terms if effect, for Samuel Adams.”

I asked one of the smartest agency folks I know – Natalie Swed Stone, US Director, National Radio Investment, OMD, what she thought. She pointed me to her write up for RBR, which she wrote a few weeks ago, and I highlight this quote: “The research has to follow the investment patterns. The more uniform the data, the easier it will be–but marketers and agencies will continue to buy what they want and use best available research to evaluate and estimate behavior.” In other words, research firms should offer data based on the ways that buyers want to buy. If the research does not do that, buyers will do what they have to.

Network radio has been adding up time shifted audiences(that are not hearing the message simultaneously) for decades. It’s completely acceptable to represent a network audience’s AQH as the sum of the AQH’s of audiences across the country listening to a program on hundreds of stations at different times. Arbitron’s RADAR product does this. “When we buy national schedules—they can air on different stations at different times—within the prescribed daypart…” Swed Stone told me, “in TV, the currency is currently live plus 3 days (DVR) etc  and the currency is the same –even if a person plays back the program 3 days later –it is included in the overall rating.”

To check my thinking on this topic, I spent a lot of time calling and emailing digitally savvy radio people, asking them about this issue. None of my broadcast sources would go on the record, but they uniformly told me that this is a spin game. No one thought the “one to one” and “one to many” distinction holds any water at all. “It’s not intellectually sound.” I was told.

Arbitron is caught in a tough situation. As a research firm, they’re obligated to create products that are fair and objective. But some of their clients don’t want them to do that in a uniform platform. The listening landscape is rapidly evolving into a space that includes new audio platforms. Ultimately, advertisers and listeners will decide the landscape – listeners will listen to what they want to hear and advertisers will spend to reach them.

The audio landscape has never been more diverse and interesting. Pandora, with its enormously popular platform is bringing new advertisers into the space, and this could be a big win for the industry. Grow the pie! Adapting to new dynamics would be time better spent that shoveling sand against the tide..

Pandora Reports First Profits

Pandora reported its first profits last week of $638,000 on revenues of $75 million for its third quarter of this year. This beats most analyst’s expectations and dashes last year’s losses for the same period of $1.77 million.

Pandora streamed 2.1 billion hours of programmimg -twice the numbers of last year same quarter. According to Chief Executive Officer Joe Kennedy, About half of Pandora’s $66 million in third-quarter advertising sales came from mobile users, a “triple-digit” increase from a year ago.

“Rapid growth of 104% year-over-year in listener hours and record Internet radio market share growth to 66% illustrates the strong demand for personalized radio,” stated Joe Kennedy, Chairman, President & CEO of Pandora. “Our growing scale and powerful, multi-product advertising platform is enabling Pandora to increasingly penetrate areas that were once solely served by terrestrial radio. Our momentum in transforming the radio industry is stronger than ever.”

For third quarter of fiscal 2012, total revenue was $75.0 million, a 99% year-over-year increase. Advertising revenue was $66.0 million, a 102% year-over-year increase. Subscription and other revenue was $9.0 million, an 80% year-over-year increase.

This news came a week after the Radio Advertising Bureau released third quarter revenues reporting $190 million in digital revenues for US based radio broadcasters in addition to modest growth in spot revenues.

Pandora Wants a Piece of the Political Ad Pie

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In their typically savvy way, Pandora has implemented a strategy for taking political ad dollars. Taking the listener registration information that they already have on every listener, they have created a turnkey way for political candidates’ campaigns to deliver their messages to custom voter zones. The service also offers rich media attributes, enabling campaigns to utilize display and video components in addition to audio.

Once again, Pandora is aggressively going after broadcast radio dollars with this strategy. Chief Revenue Officer John Trimble said, “With the 2012 political campaign season in full swing, advertisers realize that personalized, internet radio is a powerful platform to reach a desired set of voters. Pandora’s new targeting features maximize effectiveness of ad spend that has historically been wasted reaching voters outside of election districts. Political, national and local advertisers all benefit from our scale, precision targeting and personalization to reach a passionate and engaged audience on Pandora.”

Pandora gathers zip code data at account registration and a back-end system maps that information into specific regions, making it easier for a campaign to maximize effectiveness. These new features add on to the previously available targeting parameters of age, gender, zip code, time of day, music genre, seeded artist, interaction, mobile and first impression.

Political ad spending has been climbing for years and – thanks to the elimination of campaign spending caps – will be higher than ever for 2012. In 2008, the last presidential election year, political ad spending was $2 billion, last year, without a presidential election it reached $2.3 billion.

While Pandora can offer a nicely targeted ad campaign within precise voter zones, one thing candidates will not get from Pandora is the FCC mandated political rate card. Radio broadcasters are required under FCC regulations to provide all political candidates with a fixed rate at the lowest available rate on their stations. Pandora and other Internet radio stations are not beholden to such rules.

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