What's radio up to in 2014?
If most of the speakers at RadioInk Convergence are right, the critical problem for the industry is that radio is stuck in cars, and the key challenge will be moving radio from cars to phones.
Many of the speakers tried to map the problem for the audience. And one thinks they have solved it.
But first, the awful truth:
Terrestrial radio is losing audience at the rate of 6% per year, while total audio audiences are growing, 16% per year, in fact, on mobile devices alone. As a Clear Channel Executive pointed out, 70% of all online radio listening is already on mobile devices.
And while radio execs have poo-pooed Pandora's claim of a 9% share of the audio audience as "self-reported," Larry Rosin, Co-founder and president of Edison research said his best informed guess is even higher, at 12% of all "share of ear."
In fact, he said, Pandora audience is now three times the size of the total online radio audience, with 44% of its reach at the expense of AM/FM stations. Ouch.
So as long as radio is trapped in cars, the future looks bleak.
The mainstream approach is via apps and streaming. Following audiences from cars into streaming platforms and bundling the two audiences has become a standard practice at Clear Channel and many forward-thinking stations. But other station owners and managers at the conference complained bitterly that streaming is an unsustainable as a model in its current form.
The whining may sound familiar to print folks who already followed audiences into cheap, tiny online display ads. But for radio the pill is much more bitter to swallow, and some are threatening to cough it back up.
Streaming transfers broadcast dollars to digital pennies, not just dimes. The reality is that so far streaming costs are so high that ads are much lower in margin ("no margin" one station manager pouted) than other kinds of digital ads.
And everybody pays. Streaming eats up consumers data plans, clogs bandwidth and hands the money and control over to telecommunications companies.
Keynote speaker, Jeff Smulyan, CEO of Emmis Communications, said, basically, streaming won't be the future and that radio stations should join in the NextRadio venture, which activates a chip pre-installed in Android smart phones to receive FM broacast.
But other speakers pointed out that station owners should focus on content rather than distribution. The problem, in other words, is the product. Local personalities, and interactive music apps that include skipability and additional song slection options are the path to hold audiences they said.
Speaker and celebrity podcaster, Adam Corolla, is a case in point. After being laid off from his radio show, Corolla managed to transfer his audience to a podcast and achieve more than a million viewers and social media fans, which he now has releveraged into hosting a national cable show "To Catch a Contractor."
The man has talent. He suggests radio look for local talent such as comedians with big social followings.
Meanwhile I wound up making the case - along with fellow speakers, Alexander Kates, Global Head of the Digital Marketing Insitute, and Bryan Kramer, CEO of PureMatter - that developing social and digital chops is important first to increasing revenues, not just cannibalizing them.
And that the much maligned streaming is still critical to providing the big broadcast audiences that power integrated campaigns.
That's me, below, showing examples of three integrated ad campaigns created by radio stations. for the Top Ad Awards.
They included winning Top Ad ad created by radio station WMEE, a campaign that leveraged a Federated Media's total streaming audience of 1 million to power $500,000 to $1,000,000 in new sales for a local remodeler.
As one speaker put it, "A big idea trumps CPM every time."
A portion of the campaign also included digital services, a vast new market for radio folks like Federated who pursue it. The client paid $11,000 for the website and SEM, and another $50,000 for the radio-powered lead generation campaign. With first year sales from the program tracking $1 million, he is not complaining about the price.
Show me the money? I just did.
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