Indianapolis,
IN -- Erica Farber, president and CEO of the Radio Advertising Bureau (RAB),
provided the following prepared remarks for the 2014
Radio Show Opening Event. The Radio Show is produced by RAB and the
National Association of Broadcasters (NAB).
***
Hello
everyone, and welcome to this year's Radio Show. It's been an awesome year and
only the pit crews at the Indy 500 are more coordinated than we are. Special
thanks are owed to our partners over at the NAB, Gordon Smith, John David and
everyone else who worked so hard to pull it off this year.
None of us
would even be here, of course, were it not for the advertisers, who continue to
use our medium to underscore awareness and drive action and sales. We feel
fortunate to be partnered with a group of advertisers who are so committed to
their own goals and so supportive of ours.
In a
little while Bob Hoffman is going to give a talk about B.S. As an advertising
guru -- some say legend -- he's entitled. It's a provocative stance, and I'm
sure you're all looking forward to it as much as I am. Before that, though, I
want to tell you a love story.
There was
a period a few years ago -- let's call it the Dark Times -- when people enjoyed
heralding the death of radio. The world is all new, they cried, and radio is an
old medium. PowerPoint decks featured numerous pictures of 1950s families
sitting around a giant wireless -- remember the old Sylvanias -- tuning into
the Lone Ranger while wearing suits and dresses and hats inside the house. Even
the children.
Those of
us who loved radio were worried. Was our old flame losing its luster? Would we
be able to keep the magic alive? Fortunately, it turned out the reports of our
death were slightly exaggerated, because we were not alone in our affection for
radio.
In fact,
far from it.
People
love radio. They loved it in the 50s and they love it now. They love music,
they love news, they love the social nature of radio, the personalities, the
callers, the discussions and even the ads. The good ones, anyway. 244 million
people tune in every week, most for more than a couple hours a day.
It's still
the number one way people listen to music. In fact, only a few days ago the
Wall Street Journal published a story discussing the fact that over 86% of
Americans still listen to radio while driving, way more than any other medium.
I'll happily agree with them radio remains “the king of the road.”
In another
recently released study, over 70% of respondents described radio personalities
as friends who they would 'truly miss if they were gone'.
Sweet,
right? And more than sweet. Powerful.
New
technology has allowed our listeners to fall even more deeply in love with
radio. Now they can text or tweet or follow or 'like' their favorite stations,
or personalities. They email, they comment, they interact. This is not just
dating anymore, people. This is marriage.
And it
isn't just love that makes the future of radio secure. It's also a deep and
abiding affection for the technology of radio. Let's face it; we've always been
a little bit geeky. From hand built crystal sets to transistors to digital,
it's all just radio to us. While other industries seemed to scramble when new
technology changed their playing field, we just saw more room to play.
And right
now digital radio is the best game in town. It's our fastest growing revenue
sector: $889 million dollars last year, and up 12% for the first half of this
year. There are now over 23 million HD receivers in market, with 2300 stations
broadcasting, and the technology is improving and developing every day.
Currently, 35 automakers are shipping vehicles equipped with HD Radio
Technology, and we all know it's only a matter of time before real time traffic
and data are part of every in-dash radio experience. Cover art, song tagging...
all coming soon to a car near you.
And once
the drive is over, you can take it with you. NextRadio has well over 850
thousand downloads, and gets a 4 out of 5 rating in the Google Play store.
Users have listened to over 10,300 different FM stations wherever they go,
without dipping into their data plans or incurring charges. In fact, we're at
nearly 1.1million hours of listening -- a monthly increase of over 23 percent
from last month. There are currently 27 FM enabled devices with NextRadio available…and
that number just continues to grow. Incredible. The comments in the app store
make it clear -- radio fans are happy to take their passion to go, and now
they'll never be lonely again.
While we
all know that digital is radio's new frontier, we have some work to do. Our
trade association partners at the IAB just released a Digital Audio Ad Serving
Template and it's open for public comment. I encourage everyone to review this
document, discuss it with your digital teams, understand the implications to your
business and share your opinions. As is always the case in a love story, there
are new things to learn and adjustments to be made. This will only help us grow
to deliver what our video counterparts already do and it will strengthen our
relationships and partnerships with advertisers.
So who's
bringing the love this year? Some advertisers stand out. Automotive continues
to be our number one category, spending more than numbers two and three
combined. Research shows people are keeping their cars longer, so more
maintenance --- auto parts and service companies increased their radio spend
14% this quarter. And for those who are looking for a new car, radio continues
to be an important influencer in choosing where to buy it. Dealers and their
vehicle brands have always depended on radio and we're happy to support them.
This past
second quarter, political advertising was gearing up, as various states held
primaries and contests on state and local issues. Candidate spending was the
highest category, with Issue spots close behind. As general election races heat
up, we anticipate increased spending in the next two months.
Spending
in the beverage category was down a little bit, despite the hot summer,
although Coca-Cola continues to be one of our BFFs, spending an increased 21%
this quarter. Charitable, religious and non-profit advertising also increased
over 10% -- non-profits have always seen radio as an excellent driver to action
and donation, and that's something we can all feel good about. Our number three
category for the first half was communications and cellular, up a little over
6%.
Generally
spot spending was down a little at the half-way mark, although that 3% dip was
more than offset by an increase of 12% and 15% in off-air and digital spending.
Historically, radio spending increases in the third and fourth quarter, so
we're hoping for an overall improvement by the end of the year. And as we heard
from Allstate at lunch today, smart advertisers still regard radio as their
workhorse: a medium that takes the brand awareness built by national campaigns,
and actually moves people to measurable, locally targeted action. If I can
stretch my metaphor a little, you might fall in love with a movie star... but
it's the boy next door who actually takes you to the prom.
But while
this is a love story, it's not a total fairy tale. As with any long-term
relationship, we've had our ups and downs. We've worried about the future.
We've wondered if we were headed in the right direction. But we never stopped
working at it, together, and we can feel the excitement coming back. We've got
a little more spring in our step these days, we're proud to say we stayed the
course, and the future's looking pretty awesome.
We love
radio. And together we're going to live happily ever after.
***
About
the Radio Show
The 2014 Radio Show, produced by the National Association of Broadcasters (NAB)
and the Radio Advertising Bureau (RAB), will be held September 10-12 in
Indianapolis. This year's show brings radio broadcasters and industry
colleagues together to share knowledge, discover the latest innovations,
network with industry leaders and explore creative business strategies for the
digital age. To learn more about the 2014 Radio Show, visit www.radioshowweb.com.
About
RAB
The Radio Advertising Bureau serves more than 6,000 member Radio stations in
the U.S. and over 1,000 member networks, representative firms, broadcast
vendors, and international organizations. RAB leads and participates in
educational, research, sales, and advocacy programs that promote and advance
Radio as a primary advertising medium. Learn more at www.rab.com.
About
NAB
The National
Association of Broadcasters is the premier advocacy association for America's
broadcasters. NAB advances radio and television interests in legislative,
regulatory and public affairs. Through advocacy, education and innovation, NAB
enables broadcasters to best serve their communities, strengthen their
businesses and seize new opportunities in the digital age. Learn more at www.nab.org.