Company News · September 25, 2012

Radio’s Progress in the Digital Advertising Space

By Edison Research

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.

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