Radio’s Progress in the Digital Advertising Space

By: Larry Rosin, Edison Research

A few months ago I had lunch with a friend of mine from Princeton who had started a digital agency with great success. So successful that he sold it to Publicis for $575 million dollars. In the course of our lunch I asked him for his opinion about radio’s digital efforts. After he stopped staring into space, followed by him staring at me, he politely told me that he was entirely unaware of any digital efforts by radio. He said he knows there is streaming radio and he is familiar with Pandora. And that was pretty much it.

Then the idea came to me. I went to the good people at the RAB and said: “We should investigate how pervasive this might be, and more to the point we should get a handle on just what people at digital agencies are thinking about radio.” The RAB team agreed, and my team at Edison Research began collecting interviews.

Last week at the 2012 Radio Show, I had the pleasure of presenting some clips of the interviews we did with media buyers, planners and executives about the digital revolution and radio’s role in it.

Now let me stress – the interviews seen here are not necessarily representative of the vast sweep of digital and ad agency buyers out there. This is not a quantitative survey, the kind you usually see from Edison. This instead is much more along the lines of a Focus Group. The respondents who spoke to us may or may not be speaking for all digital buyers and planners, but they offer a lot of great perspective.

So let’s start by duplicating a bit some of the questions I discussed with my friend – just how do you perceive radio? Before viewing – let me warn you – some of these answers are pretty negative. But take heart – over the course of this presentation many of the answers will be more positive and constructive. But let me not take THAT too far either – radio has a ton of work to do in this space.

Let’s dive in – what is your perception of radio’s role in the digital space?

Yeah – ouch. Small audiences, worse than TV and Radio, and in that context the comment of the last lady about not being approached may actually be a good thing. I suppose until we have our acts better in general. Now I should mention that in general these people were almost all responding to our local efforts – although comments about national efforts are coming.

Let’s move on then – what is the role that radio can play in digital buys? Here we listen for the things that do come to mind when people are put this question:

Gravy. As of today that seems to be what radio’s digital offerings come to for the local buyers.

And now we come to perhaps the single most important item – or at least I thought so – the education of radio reps about digital. Listen closely to this one… In general – these people are not impressed with our salespeople. And I think we should take to heart the comment about ‘hyperlinks’. Those little things absolutely DO send a message. And I can’t imagine that people trained at the pure-plays are mentioning client’s chance to be on “the Information Superhighway” or whatever.

As I said – these people were NOT all negative. Many did come with ideas – and maybe no surprise they said: “Remember your strengths.”

And this point is amplified when we talked with our respondents about scale. Those who have looked under the hood of radio station streams and other digital offerings are like Mikayla Maroney – not impressed.

Now as you’ve been listening to these, it’s pretty clear when these people are commenting they are mostly thinking of your streams. Let’s see what they said about our sites.

Youch. I don’t know what to say about this one except for – are any of them wrong? There are tons of sites with babes of the day and other sketchy content – any many suffer from the Times Square effect where so many things are moving and flashing one can’t concentrate on anything.

OK we need some good news. Here’s what people said about streaming. And it starts with some of the positives but then some of the negatives and challenges do emerge.

Now let’s turn to the big fish – Pandora. What do these buyers know and say about Pandora?

Interesting. They are impressed but some of Pandora’s challenges emerge here as well.

Now that one is great. They love radio and the respect it. And they have great ideas.

But where are things going? Well here is where things get interesting – because you have to remember these are people who are involved in the digital side of things. And they crave what radio, to date doesn’t have. Watch this one…

And this point is made further when we asked people about where Digital is going in general.

The buyers of today are looking for the mass and response that radio elicits, but they are equally looking for measurability, personalization, efficiency and trackability. Radio has to continue on a parallel path of innovation to provide these items to advertisers or simply watch its portion of the total advertising pie continue to slowly diminish. I hope hearing it from the mouths of these digital media professionals will help you to better understand the challenges and opportunities in front of you.

6 replies
  1. Ken Dardis
    Ken Dardis says:

    Sadly, everything in these videos has been mentioned by those that radio industry executives have dubbed “naysayers” through the years. There are no surprises.

    Radio continues to sell impressions, while advertisers shifted to buying response.

    Station manaagers would be wise to heed the warnings about web site esthetics, too.

  2. Peter
    Peter says:

    We have always stated that Pandora was a great consumer product but a questionable advertising vehicle. We think that orginally Pandora thought that they would make it as a subscription based business. We now know that isn’t happening so they are forced to sell ads. The problem is their consumer base never expected ads to interupt their experience. Not surprising Pandora customer satisfaction is down significantly as they are interupted more than ever. Unless the government bails Pandora out of their rights fee deal with sound Exchange they won’t make it.

    Advertisers unfortunetly are being taken here as many of the right questions are not being asked of the Pandora reps. For instance the Registration process is grossly inaccurate. 1) users are not required to register and 2)if they do register there is a high certainty of inaccurate information being input as consumers site privacy issues. So, advertisers in many cases aren’t getting who they think they are getting. We also hear about Geo-targeting with Pandora as being a benefit. Here too there are gross inaccuracies as IP addresses can’t be tracked accuately in many cases and forget about tracking listeners on mobile phones. The mobile platform is where 70% of their consumers come from. Lastly, the prompting issue is one that no one talks about. Advertisers don’t know (as they serve up ads) if the listener is listening or not. Pandora never prompts on mobile phones which is where 70% of their listeners are. They prompt once an hour 60% of the time on the desktop.

    Scary as many are being taken here. Ask the tough questions of your Pandora reps! You owe it to your clients.

  3. Andrew Rosen
    Andrew Rosen says:

    The key to a successful transition from traditional to multi-media is creating relevant content for the target in an uncluttered, easy to navigate site that is friction free.

    The advantage radio has is using our massive reach to drive people to our sites. That is how we approach advertising.

    Radio has the ability to be on-air, online and on-site. Delivering the advertiser’s message through our big sticks with information that is important to the consumer, driving them to a feature channel for in depth content is key.

    That custom content page must be populated with information that is meant to inform, not sell. Included, should be a way to engage the consumer.

    For example, “See if you or someone in your family is likely to have diabetes? Answer these five questions to learn more.”

    We have also had success integrating advertisers on our social media platforms. The only way they can take advantage of that is if their content is in alignment with the topic being addressed.

    Lastly, our goal is to have our online audience and revenue to be equal to or greater than 2013 by 2018. If we focus on developing compelling content delivered on the device our target is most comfortable using, Radio and its advertisers will make the successful transition and continue to thrive.


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