Radio Direct Response: Direct Response Radio Advertising Agency | Blog Zone

An article in this week’s Advertising Age cites the meteoric growth of Pandora from 40 million to 75 million registered users in 2010.  Its popularity can be sourced not only to its ease of use, but to its ubiquitous placement in a staggering array of devices.

Pandora applications are now part of TV devices from Samsung, Sony and Roku, among others.  It’s available in tablets from BlackBerry and Barnes & Noble.  In-car apps place Pandora inside of selected BMWs, Fords and Toyotas.  There’s even a version of Pandora inside a WiFi enabled refrigerator from Samsung.

A recent survey by the Radio Advertising Bureau attributes only 4% of all radio listening to streaming radio.  Yet those numbers will only grow as technology proliferates and more and more people get comfortable with using services like Pandora.  Just witness the switch from cell phones to smart phones over the past five years.

Who’s listening?  People of all ages.  (Pandora users provide their ages when they register.)  Pandora sells advertising time to local advertisers, national brands and direct marketers, matching messages to the streams of those Pandora users who fit the advertiser’s target audience.  And while Pandora does offer a commercial-free version of its service (priced at $3 per month), more than 90% of Pandora users choose the free version which scatters a handful of ads across a typical programming hour.  Since listeners have chosen – and programmed – their stations, one could argue it’s far more likely that they’ll sit through a brief commercial interruption more willingly than they would on a commercial station where the next song might not be a favorite.

Radio Direct Response has been using Pandora successfully for a number of clients.  Pandora’s ability to target by age, gender and geography, has made it a powerful, pinpoint planning tool.  For example, an advertiser targeting Women 25-49 in Baltimore can deliver their message to women in that age group who reside in a hand-picked cluster of zip codes near a particular retail location. 

Pandora founder Tim Westergren cites Pandora’s access through smart phones as the key driver in its popularity.  Pandora’s chief revenue officer, John Trimble, identifies the company’s next priority as the need to build its local business presence, in effect, challenging local radio stations for local ad dollars. 

Given Pandora’s rise in popularity, this former “audio content provider” truly has morphed into a “radio company.”  Along with its competitors, Slacker, LastFM and others, this “create your own radio station” music service will undoubtedly remain part of our audio entertainment library and maintain a fixed position as part of “The New Radio.”

Ten years of crunching radio ratings for a national radio group taught me volumes about how to spin the numbers. 

If the ratings were bad?  Find a station that did worse!  And pore through every page to find all the ways to say “We’re Number One!”  Numbers can be misleading.

Recent articles in Variety and on the Super Audio CD web site would have you believe it’s all over for CDs.  “Album sales drop, digital sales soar,” raves one headline.  Another states that vinyl record sales are rising while CD sales are on the decline.  Disturbing trend?  Nope.  Just super spin.

For the first six months of 2010, CD sales dropped 17.9%, while vinyl LPs rose 9.1%.  In raw numbers?  CD sales of 110 million units smashed vinyl’s sales of 1.3 million units.  The percentage gains and losses are just dramatic headlines in the media spin zone.

Yes, but what about digital?  Digital albums rose 13.7%, while album sales (digital and physical) fell 11%.  Big news?  In raw numbers, digital and physical accounted for 154 million units sold, compared to 42 million units downloaded.

The same misleading spin happens all the time in media, as new platforms crow about their percentage increases while “old school media” (like radio) stays flat.  Well, when you go from 1% market penetration to 3% with something new, that’s a 200% increase!  But it’s still barely a blip on the radar compared to, say, the more than 92% of Americans who listen to AM and FM radio every week.  (And that doesn’t even include those listening on satellite radios, smart phones and online.)  For comparison, a new Annenberg Poll shows that 82% of all Americans regularly use the Internet, compared to radio’s 92%, a statistic most would find shocking if they believe the buzz.

So beware the hype and flash the next time something shiny grabs your attention.  Numbers don’t lie, but people sure can spin them to mislead.

Mark Lipsky, President & CEO

The media research tool called SQAD helps media buyers plan broadcast advertising time buys based on what actual advertisers pay for actual air time in the marketplace.  In radio, that means delivering monthly Cost Per Point and Cost Per Thousand updates based on activity in 300 Arbitron-rated radio markets.

Roughly five years ago, SQAD began monitoring local 30-second radio commercial costs as well as :60s.  Today, an increase in shorter- length ads has led SQAD to include planning information for :30s in their monthly rate reports.  Inside Radio quotes SQAD’s Christine Mueller as saying, “There was a substantial increase in :30s volume in recent months and the half-minute spots now represent one-quarter of all radio buys in its spots radio reports.”  By including :30s in their data, Mueller says SQAD is able to substantially increase the size of the overall sample.

Howard Silver, Senior Account Manager at CBS Radio in San Francisco concurs with this trend, noting, “Advertisers are finding that with the PPM world, radio is more about reach and frequency and targeting engaged listeners than average quarter hour. Short form messages allow advertisers to build both reach and frequency.  This is typically what sells product and generates ROI.” 

The big issue for buyers centers on pricing for 30-second ads on the local level.  For half the time, it’s common that a 30-second ad may cost 60-90% the rate of a 60-second ad.  Similar disparities exist with 15-second and five-second commercial announcements.

Ross Dananberg, Senior Account Executive at WBZ-AM in Boston notes that “it’s important to quantify any spot duration length because there is certainly value to be measured.”  He adds that “although an advertiser might not have enough time to deliver a (full) message in less than 60 seconds, they are able to saturate a block of time with a much greater frequency for a similar investment,” and that “they also have the ability to rotate a few different messages with shorter spots.”

Once a brand campaign is established – often with 60-second commercials – it’s easier to craft a media mix of :60s and :30s, possibly using shorter sponsorship announcements to build brand and remind listeners of the offer they heard in the longer commercials.  And now SQAD is giving buyers and agencies the tool they need to tackle that task in any market from Anchorage to Miami.

It was just before midnight in Las Vegas; nearly 3 AM Philadelphia time.  I’d flown from Philly to Vegas in the early morning hours and was seated in the fourth row for the late show of Monty Python’s “Spamalot.”  I was enjoying the show, but the long day and late hour were getting the best of me. 

My eyelids fluttered as I saw the full cast assemble onstage, preparing for the finale.  And through twilight haze I heard one of the King’s men announce that the Holy Grail they sought lay not in the Kingdom, but in the audience – in Row D, Seat 101.  My seat.

My brain screamed for my body to awaken.  “Mark?  Mark!  You see this pauper walking towards you?  You are about to become part of the show.  Wake the bleep up!”  Sixty seconds later, I found myself onstage in front of 1,500 people, bellowing a passable British accent in dialog with King Arthur himself.  Three unscripted minutes later, I was awarded a tiny statuette of the famous Monty Python foot with a plaque that read: “Best Peasant” as Camelot celebrated its recovery of the Holy Grail.

When the costumed Englishman first approached my seat, I wasn’t ready to be part of the show.  But when the call came, I “snapped to” in the blink of an eye.

Can you say the same for your call center agents?  Or your customer service reps?  When a 10-minute lull in activity is shattered by a ringing telephone, is your team sharp and ready to serve? 

Every time we sign a new client at RDR, one of our Account Managers goes through “The Customer Experience.”  If the radio commercial instructs listeners to call a phone number, we call that phone number; by day, by night and over the weekend to make sure a competent, live agent is there to take the call.  If the commercial says to visit a web site and enter a promo code, then that’s what we do to see if the site functions as it should and properly credits the lead and the sale.

How often do you test your team?  How often to you throw them a curve ball, just to see how they’ll react?  Keep your team challenged to keep them serving your customers at a level above the competition.  Then reward them for a job well done – hopefully, with something more valuable than a plastic foot marked “Best Peasant.”

Mark Lipsky, President & CEO

March has so many month-long promotional opportunities it’s hard to single any one out.  So here’s two with a handful of others headlined.

“Music In Our Schools” Month is a wonderful opportunity for a cafeteria-friendly CPG brand to get noticed and do some good.  Have CHR and Urban radio stations – listened to by both parents and students - request votes on a radio station’s web site to see which local school will win free instruments or charitable donations towards the school’s music education program.  All week, various school bands, students and music teachers can make their plea for votes on-air via call-ins, letters and performances.  A brand ambassador from the company that’s making it all possible could be on hand to make the actual donation to the winning school.  It’s almost guaranteed that local TV stations will cover the promotion.

March is also “Women’s History Month,” so why not honor the women of the past by rewarding women of the present who are making significant contributions in their community?  Your brand can help fund an initiative or provide a much-needed vacation for the woman who is making it happen.

Other ways to use radio promotion to drive retail traffic, listeners to a website, event or a TV show include:

• International Ideas Month

• National Frozen Food Month

• National Nutrition Month

• National Peanut Month (think: recipes)

• National Pig Day (this could go in many directions, especially on Rock stations!)

• Red Cross Month

• Save Your Vision Month

• Youth Art Month

For ways to seamlessly tie your brand in with any of these ideas and more, call us!

Barbra Tabnick, Senior Account Manager

In an age where users personalize content, browse away from annoying ads, enable pop-up blockers and fast forward through commercials, advertisers need to strive towards engaging their audience and not create a nuisance that hampers the enjoyment of the platform on which the ad is being delivered.

Recently, legislation was approved that would put a volume cap on televised commercials, making commercials no louder than the programming in which they air.  This news comes as a relief to audiences worldwide who scramble for the remote to turn the volume down when such commercials air.  But what does this mean for the world of advertising?

Simply enough, it may mean that your ad will be heard.  If you’re anything like me, you turn the volume way down when you are assaulted with an over-the-top, loud, annoying commercial. If you’re even more like me, you don’t bother turning the volume right back up following the ad’s conclusion.  You wait until the content you tuned in to watch (hear) comes back on. One commercial’s obnoxiously loud message has thus ruined the message for what follows and what follows. You’re only hurting yourself (and others) by begging for attention at a higher decibel.

The bill is specifically geared towards changing television.  But while not all media are similar in every way, this idea of grasping at the ears of the audience probably applies even more so for a radio medium that does not have accompanying imagery. If you force the hand of a listener to change the dial, you’ve not only lost the audio, you’ve lost it all. You took 100% of your message out of the ears of at least some of your audience with no muted images left for them to glance over.

When thinking of how to grab your target audiences by the ear, don’t go for the throat. Like a girl/guy that seems so anxious to date you on first encounter, you may come off a bit desperate and annoying and you’re bound to get muted or passed over. Keep it interesting, get their attention, but don’t go so far that the audience is gets a restraining order to keep you away.

Scott Fisher, Junior Account Manager

Here’s more insight, wisdom and educated guesses from some well-placed radio executives on what’s to come in 2011.

RDR: Which radio personalities do you see at the rising stars of 2011?

MATT CUTAIR (Pandora): Michael Smerconish seems poised to break out. He’s established himself as the “open minded independent” out of all the network radio stars and with his move to eliminate his local morning show in Philadelphia to increase his attention on his nationally-syndicated midday program, it appears 2011 will be a make or break year. Mancow might be another personality to keep an eye on as he is in the process of rebranding his morning show.

ROY WEINSTEN (Westwood One): Continued national awareness of Cody Alan, host of CMT Radio Live and Billy Bush, host of The Billy Bush Show. Introduction of Robert Wuhl (a new kind of sports talk show) and Doug Urbanski to talk radio.

RDR: What new technologies do you see impacting radio in 2011?

DELANNE LANG (Premiere Radio Networks): The execution of mobile applications with advertiser benefits continue to be of great interest and we believe in 2011 more and more clients will take advantage of this opportunity.

THOMAS MANCUSI (Katz): I think you will see a traditional broadcaster get more serious about streaming and create their own brands to go up against the likes of Pandora. Ando Media is working on measuring each user by their browser as oppose to IP address, which will result in more listenership being counted. The increased adaptation to smart phones, iPads and Galaxy tablets will only benefit the digital audio medium, allowing easy access to the sites or apps.

CUTAIR: I think the continued increase of copy split technology with live satellite fed programming (which lets national advertisers air different commercials in different cities) will be an important part of continuing to increase retail spending at the network radio level. I also believe that the expansion of wireless connectivity to devices beyond the computer (phones, TVs, DVD players, cars, etc.) will increase the competition between Internet radio and the traditional broadcast players.

RDR: Musically, which recording artists sound poised for a big year?

WEINSTEIN: Lady Gaga, Eminem, Bruno Mars, Lady A, Carrie Underwood, Rihanna, Justin Bieber, Jay-Z, Miranda Lambert, Sugarland, Brad Paisley, Foo Fighters, Florence and the Machine, Black Eyed Peas, Zac Brown Band.

After Roy’s exhaustive list of recording artists, everyone else was speechless.

Happy Holidays, Everybody!!

We asked some well-placed radio executives for their thoughts and visions on radio, technology and the music industry in 2011.  Here’s what they saw in their respective crystal balls.

RDR:  Radio experienced a health bounce back in revenue in 2010, following a difficult year in 2009.  What do you predict for 2011?

DELANNE LANG (Premiere Radio Networks): We except radio billings to increase by 3-5% based on new business development and continued success with clients who utilize endorsement campaigns.

ROY WEINSTEN (Westwood One): 5-10% higher.

MATT CUTAIR (Pandora): I expect billings to be slightly higher 2011 vs 2010.  This year’s upfront has broken much later than usual, but so far, budgets from most advertisers have been slightly higher than 2010.

THOMAS MANCUSI (Katz): Digital audio billing will be increased in 2011.  The audience is growing 20% each year for overall digital audio listenership. 

RDR:  What do you see as the top radio stories to watch in 2011?

LANG:  All things digital and streaming.  With our strong listener connection on-air, we expect our on-air audience to engage in all touch points available to them.

MANCUSI:  Pandora staffing up locally to go after AM & FM dollars.  There have been rumors of a Google or Apple creating a streaming service in 2011

WEINSTEIN: HD and online streaming, mobile applications.  Programming radio stations for PPM ratings.

CUTAIR:  Advertisers have taken notice of the sales advantages that platforms like Pandora and Slacker have offered.  I expect this trend to continue in 2011 and we should see an even further ramp up as wireless connectivity in cars becomes more ubiquitous.

RDR:  Musically, do you see (or hear) one music format having a breakout year in 2011?

MANCUSI:  Top 40 was the most listened to format via streams last year and I think that will stay consistent

CUTAIR:  Expect the “Talk on FM” trend to continue.

WEINSTEIN:  According to PPM data, CHR, AC and Hispanic; many stations flipped to CHR in 2010.

             (more to come in the next entry in The RDR Blog Zone)

A simple Google search of “12-24 radio listeners” will pull up a lot of hits. Most linked articles will tell you that there is a noticeable decline in radio listenership in this demo and that most of the blame lays at the feet of radio itself, which is not known for having most self promotion outside of its own airwaves. Numbers don’t lie. There is a decline in terrestrial listenership, but the gap is being filled in new ways. Radio is evolving and with it come new opportunities for advertisers. Below are just a few examples of properties that have come up to reach this younger demo.

Streaming: (i.e. Pandora, Slacker, AccuRadio) Log on to one of these websites and you can personalize your listening experience based on songs or artists you enjoy. Each of these properties has mobile apps so the listener isn’t chained to a computer. Users can listen on their mobile device anywhere they travel. According to Edison Research 20% of 12-24 year olds were listening to Pandora (the biggest of the streaming websites) in the past month. As Internet radio becomes more and more prevalent, in cars for example, these types of properties will increase their reach and user numbers, creating even more opportunities for advertisers to reach younger consumers.

Newcomers: (i.e. Flycast, Goom, Grooveshark) There are many up-and-coming properties that are making extensive use of social media and are ad-based models. Grooveshark allows you to search for shared music and links directly to Facebook accounts so that the users are actually promoting the service. The ad units are banners at this point in time however they are a part of a service that is bridging the divide between social media and audio; again a perfect fit for the younger audience.

Terrestrial: (i.e. DG, Clear Channel) Traditionally, terrestrial-focused companies are also jumping into the foray in there own way. iHeartRadio is Clear Channel’s entry into the younger demo and in some way it has an advantage. While it is a compilation of AM and FM stations across the country, not having a pureplay format allows for offline interactions as well. In addition to iHeartRadio being a free downloadable app that includes a blog, twitter, and Facebook pages it has its core terrestrial component so you are still hearing DJ’s new music and promotions. They are speaking to the younger audience in ways that they are used to being spoken to.

The trick to reaching the younger audience has always been to deliver something new and exciting. Much like television changed radio decades ago, the Internet is changing it again. In 15 years, radio will look different. But as long as music is around, radio will remain in various forms and will remain a viable marketing tool.

Jasmine Hall, Media Planner/Buyer

After torturing his staff and listeners this morning for nearly a half-hour with innuendos and misdirection, Howard Stern finally announced that he has signed a new, five-year contract with Sirius XM.  The new deal will keep Stern tied to Sirius XM through the end of 2015.

“We are continuing on.  My decision was between a couple of different situations,” Stern explained.  “I came to the conclusion that after speaking to everyone that the real innovators and the read geniuses are the people here; that our home should be at Sirius satellite radio.”

A key negotiating point was the inclusion of Stern’s two, full-time channels as part of the Sirius XM apps available to subscribers who listen via iPhones, Blackberrys and other smart phones.  Sirius XM debuted its smart phone apps last year, without Howard 100 and Howard 101 as part of the available channel roster.

“One of the things that’s going to add to our growth tremendously, I think, as of today is that our fans can get us on any of these apps.  Your radio will be your phone,” Stern predicted.  “I think that’s the future.”

No dollar figures on the deal were given, but Stern made clear that he did not take a pay cut.  He also made certain to point out that the deal signed was between Stern himself and Sirius XM - and that sidekick Robin Quivers, sound effects wizard Fred Norris and the rest of the Stern gang would still have to negotiate their own deals to stay part of the show for the next five years.  Not that anyone’s expecting any surprises or staff changes.

“The contract was very fair.  Sirius was happy with it.  I was happy with it.  And that’s good enough for me.”

At age 56, Stern pondered riding off into the sunset to spend more time with his wife, but felt a responsibility to his large staff to sustain their livelihood.  He also confessed that he still needed the daily creative outlet that live radio provides him.

“I still like getting up in the morning and sharing all my thoughts with you.”

Stern confirmed that the show will keep its 6AM (Eastern) start time and, for now, will air Monday through Thursday mornings.  But Stern was clear that listeners should not expect the same schedule for the duration of the new deal.

“There’ll be some flexibility with that.  For now, it’ll be four days a week.  But that’ll change,” Stern confirmed.  “I ain’t gettin’ any younger.”

Last month, Sirius XM celebrated its 20 millionth subscriber.  Today, Sirius XM stock (SIRI) opened at $1.41 a share, up nine cents from yesterday’s closing price of $1.32.