Friday, May 4, 2012 | Edited by Daniel Moores
Benchmarking: Local Radio Stations' Online Revenues

There is a new analysis from Arbitron/Borrell focusing on online revenues generated by local radio stations. This is the first year that the two companies have cooperated on a special radio report, although Borrell has been surveying local online spending for a decade.

According to this survey, radio's online ad revenue has grown from $18M in 2002 to $303.7M in 2011. This represents 2.4% of radio's gross revenue in 2011, says Borrell. By comparison, local online represents 25% of directory (Yellow Pages) revenue, 16% of newspaper and 15% of TV according to Borrell.

The report forecasts 35% growth for local radio's online revenue in 2012, to $409.9M. Radio's share of 2011 local online was 1.8%. Pureplay Internet companies captured just under half of total spend (46.2%) followed by newspapers (24.7%), directories (12.6%), broadcast TV (12.0%), cable/satellite (1.0%), magazines (0.8%), and other print (0.9%).

Radio's 2011 streaming audio revenue was up 20% over the 2010 level and is forecast to double in 2012 as more stations see value in their streaming audio audiences. Even doubled, that total will be half that of radio's pureplay competitors (Pandora and numerous other independent stations who are beginning to grow local ad sales).

Borrell says the pureplay Internet companies are actually losing share due to evolving relationships between the pureplays (who own superior technology) and legacy media companies who offer promotion, salespeople on the street, and content.

Other highlights from the study:

RADIO GETS 62% OF ITS $303.7M ONLINE REVENUE FROM BANNERS, STREAMING AUDIO ADS:
  • Untargeted Banners - $121.9M (40.1%)
  • Targeted Banners - $7.5M ( 2.5%)
  • Paid Search - $39.5M (13.0%)
  • E-mail - $37.4M (12.3%)
  • Streaming Video - $30M ( 9.9%)
  • Streaming Audio - $67.4M (22.2%)
RADIO MANAGERS SPLIT ON WHETHER STREAMING-AUDIO PRODUCT IS FAIRLY PRICED:
  • 50% of radio GMs, GSMs surveyed by Borrell think streamed-audio is underpriced
  • 49% think product is priced fairly
  • 1% think it is overpriced
RADIO'S DIGITAL SALES FORCE:
  • Borrell estimates there are approximately 17,000 radio sales reps on the street
  • It's estimated that there are approximately 4,200 radio reps selling digital products
  • Only 11% of radio companies had digital-only sellers at the beginning of 2012


(Source: Andy Rainey, SVP/Research, RAB)
Big Tablet Sales Push Video, App Downloads

Worldwide global tablet sales will reach 232 million units in 2016, up from 64 million units in 2011, per a new report.

The Tablet Technology and Markets report from Futuresource Consulting estimates a 200% increase for consumer use across the United States and Western Europe during the next two years. Consumers bought about 52 million tablets in 2011 across the two regions, and the market continues on track to exceed 153 million units in 2013 -- the majority being sold into the United States.

Tablet sales will rise, but what about use? U.S. consumers using a tablet at least once monthly will reach 75.6 million in 2013 -- up from 13 million in 2010, according to eMarketer. The research firm estimates iPad users will account for 53.9 million in 2013, up from 11.5 million in 2010.

While Apple appears to maintain the dominance since the iPad launch, Android-powered devices from Samsung, Amazon and Asus continue to gain traction and increase in popularity. Apple released earnings on Wednesday, nearly doubling profit on iPhone and iPad sales. Profits, overall, rose 94% for the fiscal second quarter, compared with the year-ago quarter.

Apple CEO Tim Cook said iPad sales exceeded 12 million in the March quarter.

Futuresource believes tablets have cannibalized the demand for netbooks, but consumers still see the device as an addition to conventional PCs or Macs, rather than a replacement. Consumer sales dominated the overall market in 2011, accounting for more than 90% of tablet shipments.

Consumers have also begun to download more apps on tablets. Tablets accounted for 10% of total mobile app downloads in 2011. Development and availability of apps across multiple platforms are expected to double in 2016. Tablet owners are also more likely to pay for apps -- especially in the U.S., according to a "Living with Digital" report from Futuresource.

Tablets are unlikely to displace large-screen TV sets, but Futuresource estimated the hardware will drive the growth of full-length online video downloads, with key applications allowing content to be played out from one screen to another, providing higher-quality mobile viewing.

Tablets will also contribute to the rise in ebooks. Annual trade for digital book sales is forecast to achieve significant growth, with digital downloads in the U.S. expected to account for almost 70% of book sales by 2016 -- a substantial rise from 20% in 2011. Similar progression is expected in the U.K., with digital sales reaching almost 40% share.

(Source: Online Media Daily, 04/26/12)
Americans Watch Billions of Video Ads Monthly

Whetting the appetites of marketers, consumers are watching more online video advertising than ever. Breaking all previous records, Americans viewed more than 8.3 billion video ads in March, according to new data from comScore.

Delivering another record month, Hulu recorded more than 1.7 billion video ad views in March, while Google Sites -- i.e., YouTube, ranked second with more than 1.2 billion video ads. The BrightRoll video network came in third with 953 million, followed by Adap.tv with 892 million, and Specific Media with more than 775 million.

Time spent watching video ads totaled 3.5 billion minutes, with Hulu delivering the highest duration of video ads at 690 million minutes, according to comScore.

Video ads reached 51% of the total U.S. population, an average of 53 times during the month, while Hulu delivered the highest frequency of video ads to its viewers with an average of 51, followed by ESPN, which delivered an average of 26 ads per viewer.

Overall, 181 million U.S. Internet users watched nearly 37 billion online content videos in March, while video ads topped 8 billion for the first time on record.

Google Sites, driven by YouTube.com, ranked as the top online video content property in March with 146.1 million unique viewers, followed by Yahoo Sites with 60.6 million; VEVO with 51.3 million; Facebook.com with 45.1 million; and Viacom Digital with 44.3 million.

Nearly 37 billion video views occurred during the month, with Google Sites generating the highest number at 15.7 billion, followed by Hulu with 1 billion and Yahoo Sites with 815 million.

ComScore's March 2012 YouTube partner data revealed that video music channels VEVO -- 49.1 million viewers -- and Warner Music -- 30.3 million viewers -- maintained the top two positions.

Gaming channel Machinima ranked third with 22.9 million viewers, followed by Maker Studios with 14.6 million, FullScreen with 12 million and BroadbandTV with 8.5 million.

Among the top 10 YouTube partners, Machinima demonstrated the highest engagement -- 69 minutes per viewer -- followed by VEVO at 62.5 minutes per viewer. VEVO streamed the most videos -- 670 million -- followed by Machinima at 379 million.

Also of note during March, 83.5 percent of the U.S. Internet audience viewed online video, while the duration of the average online content video was 6.4 minutes, and the average online video ad was 0.4 minutes.

Video ads accounted for 18.5% of all videos viewed, and 1.5% of all minutes spent viewing video online.

(Source: Online Media Daily, 04/23/12)

How You Can Make Money:
Make sure your TV advertisers are aware of the digital media video taking time away from television viewing. And show your advertisers how they can improve their effectiveness by using online video ads on your digital offerings.

Daily Sales Tip: 5 Reasons You Are Not Selling Enough Digital

1) I forgot

With every advertiser it is important to conduct ongoing CNA questions that include questions about their digital needs. When asking your clients about their ongoing marketing needs, don't forget digital.

2) It's not worth my time

Commissions are small for digital compared to broadcast. And broadcast is the low hanging fruit often easiest to pick. So selling digital alone may not be the answer. Add digital to generate incremental dollars. Add new prospects by calling on digital-only advertisers and use your digital assets to open the door to new categories using digital AND broadcast.

3) Missing the Clue Bus

If the buyer knows more about digital than the salesperson, chances of closing are thin. If you don't have a clue about interactive marketing, learn. OK, I know this sounds self-serving, and it is, but sign up for RAB's digital training courses (deep link: http://www.rab.com/public/academy/classofferings_online.cfm) or look for other training courses to help you learn digital and integrated marketing.

4) Papering the town with packages

We do such a good job in radio sales of employing the consultant style of selling, yet far too often when it comes to selling digital, we drop a digital package or one-sheet on a client's desk on our way out asking if they'd like to add this to their radio campaign. It's no surprise clients don't buy it. Integrate your digital recommendations into your proposal based on the client's needs discovered during the CNA.

5) Riding it out

If you've had a successful radio sales career and are hoping to reach retirement before having to sell digital and integrated campaigns, know that many speakers at the NAB Show this year were telling managers to make a change of personnel if salespeople were unwilling to adapt. Embracing digital is better than the ax.

Source: John Potter, VP/Training, RAB

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