Introduction to Podcast Advertising

If you are a listener of podcasts, you have probably heard advertisements for everything from mattresses to food delivery services. Although podcasts have existed for over a decade, many marketers are unfamiliar with the advertising opportunities associated with the medium.

Podcasts are unique in the delivery of the advertisements. Most podcast hosts read the copy points themselves and the length of time spent promoting the product varies. The audience is more engaged since they have to opt-in to the medium.

A study done by comScore found that podcast ads were considered to be the least intrusive, and listeners tend to take action after hearing an ad. NPR reports that “75 percent of podcast listeners take action on a sponsored message.”

As an advertising medium, podcasts are expected to grow exponentially. Steven Goldstein, CEO of Amplifi Media, said podcasts’ “’live reads and limited commercial loads are attractive” to advertisers. 

Advertising Market Predictions Through 2021

Every year, Price Waterhouse releases their Entertainment & Media Outlook report with advertising market predictions through 2021.

Since last year’s report, online advertising has overtaken television by about $15 billion. By 2021, the online advertising market is estimated to be 50% larger than TV and has a compound annual growth rate (CAGR) of 9.9%.

Mobile has the largest share of online ad spend and accounts for 71% of all internet consumption, as reported by Digiday. Fueled by social video, “mobile advertising is projected to grow by an annual average of 18.7% from 2016 through 2021”.  

Television advertising spend is growing slowly and is expected to reach 38.8% share of the market in 2021. Its low CAGR of 1.3% is due in part to declining viewership, a trend driven by younger demographics. Marketing Charts reports that this decline is not only due to cord-cutting but also the fact that 18-24 year olds are watching less traditional television.

With both the magazine and radio markets remaining flat, the only market expected to see a decline in revenues by 2021 is newspaper advertising. Despite loyal readership, the newspaper market revenues are expected to drop by $4.6 billion between 2017 and 2021. 

Long Live Radio

The casket may have been built by skeptics in anticipation of broadcast radio dying off, but that casket is far from being put in the ground. In fact, traditional AM/FM radio remains the number one medium in terms of reach across the United States reaching 93% of the population according to Nielsen.

Radio remains relevant for a variety of reasons including the fact that listeners are usually on the go. According to Edison Research, 86% of Americans drive to work and broadcast radio accounts for 70% of in-car audio. This means, drivers are consistently listening to AM/FM stations on their daily commute giving advertisers a reliable medium to reach them through.

On top of that, Americans listen to the radio when they’re driving for reasons beyond going into the office. With more leisurely drive times, advertisers can entice listeners with timely, local, and influential messages.

Radio is also changing on the back end of things that remains a mystery to your everyday listener. The push of programmatic buying has begun and companies like iHeartMedia and Jelli are jumping on board quickly. Jelli has created a platform for the radio giant, iHeartMedia, giving them the ability to sell inventory across all 858 network stations reaching a quarter of a billion people.

“Smart Audio Audience” buys have some obvious pros and cons. Pros consist of the ability to reach a large amount of people, targeting an audience rather than a daypart & demo, and the data to conduct more sophisticated buys to name a few. On the flip side, with such a large geographic, programmatic lacks the ability to buy locally eliminating the option for advertisers to promote local deals.

Digital support has also immerged in efforts to keep broadcast radio alive. Entercom, a broadcast radio company, created 120 websites for each of its 120 broadcast stations giving listeners the ability to interact socially, engage with DJ’s, and be connected like never before. In fact, Kansas City’s own 96.5 The Buzz doubled their station listenership when they added a streaming component.

All of that to say, radio isn’t ready to wave the white flag. In fact, radio isn’t even close to calling it quits, and neither are advertisers who take advantage of the successful media outlet. 

Digital Radio Goes Programmatic

It comes as no surprise to see digital radio (audio) numbers escalating. Nevertheless, all the bells and whistles to follow bring forth some interest.

eMarketer estimates that by 2017, “Digital Radio listenership will grow to 57.8% of the population”. Mutually, ad dollars being spent in the digital audio sector will also grow. However, those ad dollars might be spent in a slightly different way than usual.

The International Data Corporation (IDC) expects for one in five radio dollars (approximately $4 billion) to be booked programmatically by the year 2020. As defined by Prohaska Consulting programmatic buying is, “the process of executing media buys in an automated fashion through digital platforms such as exchanges, trading decks, and demand-side platforms (DSPs). This is an alternative to the traditional use of manual RFPs, negotiations and insertion orders to purchase digital and other platforms.”

So, why is digital making this switch into the programmatic world? Well, simply put, it’s easier and more detailed.

Easier – no longer do buyers have to ask for a proposal, negotiate for the best price, and send in an insertion order in order to make a buy. Now, buyers’ impressions (radio spots) are purchased automatically through a bidding format.

More detailed – Programmatic allows for layers upon layers of targeting with the use of app-login data, first-party registration data, and other third-party data.

So instead of just targeting a person who probably listens to alternative music during the hours of 6am – 8am, advertisers can now target that 28 year old male who loves alternative, drives to work between 6am – 8am and has also been eagerly searching for the perfect diamond ring, wedding venues, houses on the market, and all-inclusive resorts. That extra piece of information opens tons of doors to advertisers to specifically target the soon to be married male in contrast to a 28 year old male who loves alternative and lives in his parent’s basement. 

Commuters are Tuning in to Traditional Radio

With all the music options available to today’s working commuter, some might wonder if traditional radio is still an active media. Commuters have options like paid satellite radio subscriptions, streaming radio services including Pandora and Spotify, listening to their personal music library, or dialing in to traditional FM/AM radio frequencies.

Edison Research released new survey results affirming that commuters do in fact still favor the traditional radio option. Results showed that nine out of ten commuters listen to traditional radio while on their way to work.

For advertisers, the biggest question comes when discussing the commercial time. Do listeners tune out immediately? Well, 23% do. However, 29% of respondents said that they don’t typically switch away during commercial breaks at all.

When Commercial Comes On AM/FM Radio During Commute
Action	% of Respondents
Do not switch	29%
Listen to at least one commercial	23%
Listen to part of one commercial	25%
Tune away immediately	23%
Source: Edison Research, April 2016

When it comes to switching stations due to commercials, Pandora listeners are less likely. Edison Research states that 61% of Pandora listeners never switch away at commercial breaks.

From this research, it’s evident that traditional radio is still very viable. More listeners give advertisers more opportunities to get their message across. With the majority of Pandora listeners staying tuned during commercials, it might be wise to combine the two platforms in your media mix to best reach daily commuters.

Radio Advances on Digital Opportunities

With digital media taking over the advertising world, people might think that the traditional mediums are soon to be a thing of the past. Borrell Associates and the Radio Advertising Bureau discovered that instead of digital booting out the “old” radio, they may in fact be supporting one another.

The radio industry has an opportunity to step into the digital world. Through this, they’re able to capture radio ad dollars and digital ad dollars. Borrell Associates reports that the radio industry raised its digital ad revenues by 11.4% last year bringing their total digital ad dollars to over $550 million.

The study shows a strong correlation between the rising revenues and the opinions of radio employees. 250 managers and 2,704 stations were surveyed on their attitudes about digital revenues in the radio world. It is no surprise that as ad dollars from digital media rise, the attitudes of radio managers also become more positive.

Today, only 16% of radio sales managers believe that radio sales suffer due to reps being forced to sell digital advertising. That percentage has dropped significantly from 2014 when over half of radio sales managers felt like radio sales were suffering.

I believe this is a huge opportunity for the radio industry. Instead of remaining stagnant in their traditional ways, radio has opened its doors and embraced the digital platform. If history has taught us one thing it’s that change is inevitable and if you refuse to adapt, you’ll surely be left in the dust.

Internet Radio and the Price Increase Required for Advertising

The current Pandora station streaming music to my ears encompasses a total of 9 different artists influencing the songs that I hear. The current FM radio station set in my car encompasses a total of 9 different songs that I hear, over and over and over. Rain News estimates an increase of 42.7% of internet radio listeners over a three year period from 30 billion in 2014 to 43 billion in 2017. It is no surprise that listeners are shifting towards a more personalized experience on internet radio as opposed to the traditional radio alternative.

With this shift from traditional to internet, advertisers must shift their advertising platforms as well. It’s no surprise that research (by Rain News and XAPPmedia) has shown that spending on internet radio advertisements is expected to increase. According to the research, 77% of US music industry professionals expect ad-loads on internet radio to increase over the next two years.

The increase of ad-time is expected to rise nearly 15% over the next two years from an average of 2 minutes 41 seconds to 3 minutes per hour. However, with 3 minutes standing at the maximum amount of time for advertisements for the best user experience, the amount of advertisements cannot grow exponentially. Because of this, the cost will rise.

This is your standard supply and demand situation. With the demand (amount of ad minutes) from internet radio providers being limited to 3 minutes of advertisements, all the pressure is on the supply (advertisers wanting to advertise) side. This gives all the power to the internet radio providers allowing them to adjust the price of spots more freely.

According to the Rain News and XAPPmedia research, eight out of ten (79%) music industry professionals believe that internet radio ad rates will increase over the next three years.

Internet radio does have its perks that might make the price jump worth it. Internet radio can target a more specific audience that you’re trying to reach, as well as give more specific details of ad performance.

Advertisers can expect and prepare for this shift from traditional radio to internet radio as well as the pretty penny that it will cost. 

How does a media buyer verify that a schedule actually ran?

As a media buyer, there is a lot of interaction between the media vendor and buyer; likewise, the media buyer interacts a lot with his/her client. Part of the job is following up with vendors to verify that the advertising placed actually did run. This is the backend paperwork that is necessary in order to avoid accounting errors and to keep clients updated. Below are a few questions that most media buyers/planners must address for each campaign and define expectations for the client.

How often should I receive online summary reports from my vendor? Some media experts say that monthly reports should be enough to watch online trends. While others, I fall into this category, prefer to see a report every two weeks. That way, if a negative trend is caught, it can hopefully be reversed prior to the end of the month. A buyer should speak to the vendor and client and agree upon a summary report schedule prior to running a campaign.

What should I expect for a proof of posting for an out-of-home campaign? For outdoor billboards, bus signs, train signs, and any signage out-of-home, a proof of posting should be sent to the media buyer. The proof of posting should be a time stamped photograph that verifies the location, panel number, date and time creative was installed. Historically, hard copy pictures were requested; however, nowadays, a .jpg photo is typically fine.

How many tearsheets should I request from the print vendor? Before a campaign starts to run, ask your client if they would like tearsheets of their upcoming ads. If not, request two copies, one for accounting and one for your files. If your client does want a copy, verify how many are needed and notify the vendor. eTearsheets are becoming more and more common place. These are a viable option; however, it is a good idea to let the client know that’s how the tearsheet will be sent.

What is the best way to verify that my spots ran on a broadcast schedule? When a cable, television, or radio schedule runs, a spot log is created. Basically, this is just a listing of each time an ad runs. The report should include the time, date, length, cost, and creative title. A buyer can request this at any time, but it’s typically evaluated when an invoice is submitted by a station.

Teens listen to music more on online streaming than radio

How do US teenagers primarily listen to music? Radio? Streaming? Owned music? For advertisers, it can be extremely important in knowing how a target audience seeks out media and entertainment. eMarketer recently reported on a fall 2014 study conducted by Edison Research. The focus was discovering how teens listen to music.

The study considered teenagers to be people between the ages of 13 and 17. As of fall 2014, online streaming platforms like Spotify and Pandora are ranked with more time spent listening than terrestrial radio. Teens spend about 64 minutes per day listening to online streaming and spend about 53 minutes a day with radio. In most other age categories, radio outperforms online streaming. In addition, teens have access to music through downloaded/owned music, etc.

With teenagers having a relatively easier access to computers, tablets, smartphones, and MP3 players that have Wi-Fi than traditional radios, it’s not surprising that there is a shift in listenership. Think about a bus commute, the time going to and from school on a bus could be new time spent listening to music.

It will be interesting to see if the gap between the time spent listening between radio and streaming will broaden over time as this age group matures out. The introduction of driving on a more regular basis where traditional radio is readily available may play a factor overall. 

Classic Hip-Hop format performing well for radio audiences

Radio stations rely on listening audiences to determine if a format is effective. With the introduction of Portable People Meter (PPM), it is possible to measure radio ratings and listenership much quicker than before. With this quick response, programmers have an easier time determining what moves the needle in terms of audiences.

According to MediaPost, some radio stations have flipped formats to include “classic hip-hop.” While historically urban format stations have not fared well with PPM markets, there seems to be a trend of growing ratings and listeners with the switch. The New York Times was first to report that a station in Houston, TX changed a news format to classic hip-hop. Results showed average audiences go from 245,000 to 802,000.

Other radio stations have started converting fledgling dial positions since Houston’s KROI-FM did so in October last year.

For media buyers, the key is tracking radio stations in the markets. If the ratings have dropped or skyrocketed in a target demographic, find out why. It may be because of a format change, which may need to be approved by the client to buy, or it could be another seasonal factor like carrying sports games or playing Christmas music. Whatever the case, an advertiser needs to know what station and what format is being purchased.

Core radio listeners and digital media

Digital media has changed the landscape for advertisers over the last few years. While some media feared that digital meant the death of traditional forms, it really has not been substantiated. With the case of terrestrial radio, it’s allowed the medium to reach the core audience in more ways.

The Center for Media Research recently summarized the findings of a Jacobs Media study about core radio listeners. Some of the facts to note were:

The digital breakdown of a core radio listener

·        75% of those surveyed own a smartphone

·        51% have a tablet

·        55% stream audio at least once a week

·        67% watch online video content during the week

·        95% listen to traditional, broadcast radio per day

·        17% of broadcast radio listening occurs on digital platforms like computer or mobile streams, etc.

Another fact reported was that 30% of respondents favored radio stations that interacted with them. In fact, they would listen more. Interaction may include sharing online content through social media, the station’s website, email blasts, etc.

In addition, broadcast radio still holds the majority at 51% as the go-to source for new music. The report suggests that listeners feel that radio stations can be trusted.

The takeaway is that core radio listenership may dip at some point, but if the radio station can broaden its reach with the incorporation of digital media, the audience will continue to be loyal.

Options for reaching consumers through music

Amy Winehouse, James Morrison, Neon Trees, The Penguins, Ne-Yo, The Black Keys, Nat King Cole, Boyce Avenue, and Cyndi Lauper… what do these recording artists have in common? Other than being musicians and being on a 29-year-old female’s mp3 player, not a whole lot. If an advertiser intends to reach this potential consumer through music, what are some options?

Terrestrial radio is always a solid choice. There is a mass reach and has the closest time of purchase that many other media options lack. However, one of the down sides to mass reach is that there is a limiting factor to targeting. Research can help advertisers to find stations that pull well generally for a demographic like women 18-34. But what about the women in that age bracket that don’t listen to those high-ranking stations and listen to male dominated stations instead?

Today, advertisers can look to online streaming music as a highly targetable option. With vendors like Spotify and Pandora, advertisers are able to target messaging on very specific demographic and geographic criteria. The down side to this is that while membership is growing exponentially, it’s not the audience size that radio has.

For those of you who have a Spotify or Pandora account, do you remember signing up and giving your birthday and your gender as part of the process? This information allows advertisers to only put the message in front of potential consumers. It limits the amount of spill.

So if a 42-year-old man is listening to a Justin Timberlake station, which is primarily known for a big female audience, he will not be shown the advertiser’s ad. However, if a 29-year-old woman is listening to Alice in Chains, you can reach her.

For online streaming, it’s not about the genre of music, but rather, the person. For terrestrial radio, it’s about casting a wide net and reaching a lot of people. Depending on the campaign and the goal, either of these options or even both can work.

   

Online ad revenue grows for local radio

Local radio stations have been working to incorporate the digital platform into its arsenal of options for listeners and advertisers alike. Overall, online ad revenues have increased for local radio stations, but how does that compare to terrestrial radio revenues?

MediaPost reports that experts are suggesting a 14% increase from 2012 for online ad revenue for local radio stations. The Radio Advertising Bureau arranged the report, and Borrell Associates lead the study. In 2012, online ad revenues reached almost $371 million, and estimates place the end of 2013 seeing revenues of up to $420 million.

While traditional ad formats were decreasing in value for radio stations, there has been growth in other formats like social media, audio, video, and email. Approximately 20% of all digital revenue came in the form of streaming audio ads.

Digital continues to grow in radio; however, it is important to note that it remains a small portion of overall revenue. Local radio stations’ online ad revenue only contributes 2.5% of total earnings.

Big cable network goes dark in order to promote radio

If you were planning to watch Comedy Central on Sunday, May 19^th, what you found was probably not what you expected. In a marketing blitz, the cable network went dark for the entire day in order to promote the new Comedy Central SiriusXM station with a sample of the content. The new radio station was set to launch at midnight the following Monday.

According to MediaPost, the only other time Comedy Central had gone dark before was in 1992 for Johnny Carson’s final “Tonight Show” broadcast.

The satellite station will include some of the network’s stand-up comedy specials, original content, etc.

Cross-promotion among different media platforms is nothing new; however, if done in a smart way, it can be very helpful to a campaign. Time will only tell if the blitz and good programming will keep the new Comedy Central radio station relevant and solid in listenership.

How do young consumers listen to music?

While streaming music online is growing more popular among consumers, it’s easy to forget that traditional radio still has a strong footprint in the media market. According to eMarketer, the research company The NPD Group conducted a survey over 4^th quarter 2012 on the music listening of US consumers between the ages of 13 and 35.

Results showed that the terrestrial radio still lead as the primary method, by a small margin, to listen to music.

24% listened to radio primarily

23% listened to internet radio primarily

15% listened to digital files primarily

CDs and Satellite radio both had less than 10% of responders, 9% and 5% respectively, chose it as a primary method of listening to music.

Another find was that the car is still the main place where the majority of those surveyed listen to most music. A good reason is that listeners are able to use multiple devices in the car like the radio, smartphones, mp3 players, and in-car infotainment systems.

How does this affect advertisers? Consumers want music, and they want it their way. Whether it’s from their preferred radio station, favorite playlist, new CD, or online streaming, people are going to access the music. Therefore, advertisers will need to really understand their customer and be able to reach them on various music platforms at the same time. There is no need to pull money out of traditional radio; listeners are still listening. Instead, online streaming vendors may need to be evaluated as a radio station and included in the overall buy in order to reach the desired audience.

Does heavy media consumption negatively affect other media?

If a consumer is a heavy user with one media platform, does that mean that they will consume less from another? Not necessarily, according to a study from Edison Research and Arbitron.

The Center for Media Research recently released results from a study that tracked media use consumption. The three top reaching media platforms are radio, online and TV, and the study focused on its heavy user habits. On average, persons 12+ consume 3:33 hours of television a day, 2:38 hours of the internet, and 2:04 hours of radio.

Results reflected that heavy online users spent about seven hours per day on the internet. By contrast, these heavy users consumed the average amount of TV at 3:35 hours and radio at 2:07 hours. Meaning, the steep skew towards online media consumption did not directly affect other media habits.

The trend continued with heavy TV users. This group averaged about 8:16 hours a day watching TV compared to 2:52 hours being online, and 2:12 hours listening to radio. All media was above the national averages.

Lastly, the heavy radio users spent about 6:23 hours listening, 3:31 hours watching TV, and 3:00 being online.

In conclusion, the study mentioned that the average time spent will all three media is 8:15 hours. This is up from the 7:03 hours average ten years ago. That being said, it leads one to believe that there is some media usage overlap to account for the increased consumption.

Sirius XM radio sees growth in revenues and subscribers

Satellite radio has steadily grown since it launched, and 2012 was a year that continued to see a rise in subscribers and revenue.

MediaPost reports that Sirius XM radio had the following 2012 numbers:

§       Subscribers grew from 21.9 million in 2011 to 23.9 million.

§       Total revenues accumulated to $3.4 billion in 2012 compared to the $3 billion in 2011. This is a 13% increase in revenue.

§       Just the ad revenues came in at $82.3 million for 2012. This is an 11.7% increase from 2011 at $73.7 million.

It is believed that the reason for the increase in total revenue is largely due to the growing number of subscribers. Part of that subscriber growth is attributed to automotive sales. Many brands have Sirius XM in the newer models, and about 45% of the vehicle owners choose to subscribe to the service after the free trial expires.

It is important to note that radio can be a medium that reaches consumers right until he/she leaves the vehicle and goes into a store. Therefore, knowing what options are available to the consumer is very beneficial for an advertiser. 

Do people multi-task when listening to internet radio?

If someone logs into an internet radio station, will he/she multi-task while listening? Or will his/her attention solely be on radio? Parks Associates on behalf of TargetSpot recently conducted a study to see how internet radio listeners spend his/her time when he/she is tuned in.

According to MediaPost, the vast majority of listeners are multi-tasking. Of those listening, he/she tends to do the following at the same time:

§       57% make a purchase online

§       56% research products/services for future purchases

§       60% are on social media networks

An interesting aspect of the results shows listeners views on advertising:

§       59% like to get coupons and offers from advertisers

§       55% don’t mind listening to ads in order to keep the station free

What can advertisers take from this? If moving forward with an online radio station, make sure the product/service website is prevalent. That way, it can help encourage listeners to research and possibly make a purchase. Also, it may be helpful to include a promotional offer vs. a straight branding initiative. 

What media has the majority of audience prior to shopping?

A new study performed by Arbitron and MBI Touchpoints confirmed that radio is still a valid media in reaching people prior to peak shopping hours.

According to MediaPost, the study, “Where Radio Fits: Radio’s Strengths in the Media Landscape” was conducted from October 2010 – March 2011 and August 2011 – January 2012 and observed the media consumption of adults 18-64.

Findings show that broadcast radio reaches 31% of adults 25-54 about an hour prior to peak shopping. This peak period is from about 1 p.m. – 2 p.m. in the afternoon. This percentage means that radio has the largest reach of the pre-shopping audience among all media platforms.

This does make sense because a lot of people own cars with radios and will drive his or herself to go shopping. Therefore, it is more likely that the last media a consumer views/reads/hears is radio between leaving a car and going in to shop.

Be sure to visit Ruth Burke & Associates’ blog to find the latest in media news and receive helpful tips to make your advertising campaign successful...

Public Broadcast and Political Ads?

The advertising community has been preparing for its arrival, and its here. Political advertising has started to stream onto TV. In fact, there is potential for more political ads to reach avenues of media left untouched.

According to MediaPost, the U.S. Circuit Court of Appeals in San Francisco made a decision in April that states that the ban of political advertising on both public TV and radio conflicts with the free speech clause in the First Amendment.

The decision was not unanimous; however, the majority of judges deemed political advertising would not undercut the educational focus of programming. For-profit companies will continue to be banned from public stations with commercials; however, the “sponsorship” format will still be in effect.

Some estimates show that political TV advertising could reach a record in 2012 with $3 billion.

Overall, the political season is starting and advertisers must be aware of how it will impact his/her campaign.

Be sure to visit Ruth Burke & Associates’ blog to find the latest in media news and receive helpful tips to make your advertising campaign successful...