||Radio Is Healthy, On-Air and Online
The Radio and Internet Newsletter held the RAIN Summit West early this week in Las Vegas. The one-day conference preceded the opening of the NAB Show and focused on audio delivered on-air, online, and on-mobile.
Radio is Healthy
Speakers included RAB's Erica Farber who delivered a keynote address. She quoted several positive statistics about radio. You will find many of the quoted facts in the "Why Radio" section of rab.com.
Erica also noted radio's share of digital revenue grew last year as reported in the Benchmarking Study released last month by RAB and Borrell Associates. She highlighted a finding in the report that one in five radio managers believes other radio stations are their biggest digital competitors, yet radio accounts for less than 2% of local online revenue. The report is available for download at no charge to RAB Members here.
Erica pointed out that while there are a number of choices available for audio listening in the connected car, AM/FM radio is still a solid choice in the dashboard.
In a session called Dashboard Discussion, a panel of speakers presented their thoughts on optimizing the automotive opportunity. Paul Jacobs of JacAPPS, said there are two big reasons why the car is essential to the radio business: It is our number one listening location, and it is our number one advertiser. He said in talking to auto manufacturers he sees they love radio and radio is a big part of their plans moving forward.
Our challenge is to create partnerships with auto manufacturers and at the local level to create partnerships with dealers. There has been talk over the last few weeks that radio is going to disappear from the car, but Paul said: "Radio will disappear from the car only if we enable that by not paying attention, by not investing in relationships."
Amy Van Hook from Entercom said her company is not concerning itself with trying to buy its way into the dash with an embedded app in the dashboard. The costs according to the panel would be hundreds of thousands of dollars, perhaps a million dollars, to have an auto manufacturer include an app in its dashboard display. Entercom is concentrating on creating custom apps for each of its stations.
Chia-Lin Simmons of Aha spoke of her company's app that is available in several vehicles that allows streaming of stations combined with geo-targeting of advertising. Information about Aha is available here.
Additional comments from panelists speaking about the digital dashboard included those from Carl Rohling from TuneIn. He said that the issue at hand is monetizing broadcasters' streams and their solution is creating ad representation that geo-targets consumers with in-stream audio commercials.
Programmatic Audience Buying
John Rosso, President of Market Development at Triton Digital, told the attendees: "If you are going to go after Interactive revenue, you need to track metrics the way Interactive companies do." He said the latest trend is programmatic audience buying. It is transforming online advertising. What is programmatic audience buying?
John pointed out that this is not remnant inventory. It is a different way buyers determine what media to buy. He said programmatic ad spend was difficult to track, but it was at least $4 billion last year. He encouraged radio to develop systems to sell to programmatic audience buyers.
- Audience targeted, not content targeted.
- Automated and rules based. Not generated by insertion orders. Also includes Real-Time-Bidding (RTB).
- Video, mobile, social are all doing it...audio was left out.
Other panels outlined the growth of online audio listening internationally and how to build online audiences. Panelists included broadcasters and online-only broadcasters and experts.
State of the Industry
RAIN Publisher Kurt Hanson delivered his state of the industry address where he outlined 7 Keys:
Kurt also presented 7 things stations can do to succeed:
It has become a world of on-demand variety.
The smartphone has reshaped consumer habits.
Streaming is an undeniable trend.
The tablet is here to stay.
The dashboard will open to all apps.
There is near infinite bandwidth with cellular companies increasing the number of towers to keep up with demand.
Promotional value to artists exceeds royalty fees paid to them.
(Source: John Potter, SVP/Professional Development, RAB)
- Define radio inclusively. Radio would look stronger by incorporating all audio offerings, on-air and digital audio.
Maximize the value of AM/FM stations by being live, local, linear.
Develop a new brand name for online stations. Some names better apply to new ventures. For example, Wikipedia may be a better name for online encyclopedia than Britannica.
Specialize. For example, diners think Ruth's Chris Steak House for steaks even though they may be very good at seafood, and McCcormick and Schmick is known for seafood although they may do a fine job with steaks. Narrow your focus for most success.
Go global. No longer is radio relegated to broadcast coverage area.
Develop a 2020 vision -- think ahead to 2020 and do now what will get you to where you want to be 7 years from now.
Gamble. Get started in new ventures before they are a sure play. Embrace new business models or there will be no room for you to participate once they become successful.