Radio InSights

Is Flexio the next big thing for fm radio?

2009-12-08T16:07:05-05:00

It goes to show you that there can still be innovation in a technology patented in 1933.

From Tom Taylor:

It’s not in production yet – but the wafer-thin “Flexio” FM radio could be a cool giveaway. That’s what Geek.com reviewer John Brownlee says is the goal of the designers of Flexio – to create a fixed-tune (one station only) radio that would fit in a wallet. It’s not an iPhone or Droid app, but you have to admit – it’s a very cool-looking gadget. Fixed-tune radios go back decades, but this would be the smallest yet, if it goes into production. Read Brownlee’s Geek.com piece here.

Astonishment...Familiarity...Contempt

2009-11-24T08:51:00-05:00

Innovation often goes through three stages: astonishment to familiarity to contempt. We often see this cycle played out in radio with new formats.

A new station launches, and listeners quickly abandon their current stations and switch. Initially listeners think the new format is wonderful. Listeners overlook the bad songs, the weak jocks, and marketing that hasn’t quite jelled.

The station has a brief honeymoon to fix things up, but if it doesn’t, the station’s flaws will become more irritating, and listeners will abandon the new station drifting back to the stations they listened to before.

We believe digital alternatives to terrestrial radio will follow this same arc. Digital audio initially elicited wonderment. People were astonished with all the new digital alternatives to terrestrial radio. Satellite, streaming, and online radio stations were shiny and bright. The expense, the inconvenience, and poor content were ignored.

Over time, however, the novelty wears off. Whether it is the expense, the inconvenience, or poor content, the weaknesses become more apparent and more irritating.

We believe we are well into the second phase of familiarity, and perhaps now moving towards contempt.

Satellite has stalled and is now losing subscribers. New streaming services are not expanding the options, but rather replacing the services that are failing.

Blind confidence that digital audio will succeed has been replaced by serious discussions on whether advertising based services can survive. As we recently noted, British commentators have flatly declared the advertisement based model DOA. Slacker, Pandora, and Spotify have all added pay tiers in hopes of generating additional revenue.

Further evidence that digital has moved well beyond the astonishment phase is the perception of Madison Avenue. Here’s what Jack Feuer recently wrote in a MediaPost blog appropriately titled Eat or Be Eaten:

Digital agencies get the glory, the money, the girls, the business and the media attention. Sooner or later, though, they'll get theirs. Because they know the tech but they don't understand the art. They also talk a good game.

But there's one word they think they've co-opted, which they will soon discover is the technological equivalent of a window. That word is "content."

The digital communicators don't really get content. They act like it's a commodity. It isn't. It's the heart and soul of communication.

With all of radio’s faults, weaknesses, and recent missteps it remains unchallenged in audio content. Despite digital’s huffing and puffing, terrestrial radio remains in the driver’s seat because radio understands content and owns the best.

Listeners are coming to this realization. Madison Avenue is slowly coming to this realization, and unless radio really screws up, there is little digital can do about it.

Radio: Believing the Glass is Half Full

2009-11-23T09:08:00-05:00

From time to time we use this space to report on new radio research studies. We’ve noted that research consistently shows radio’s continuing strength and relevancy.

The studies we highlight are conducted by credible companies like Nielsen, Pew, Rasmussen, and other nationally recognized organizations. Yet each time we report on a positive study, we invariably receive negative comments and criticisms questioning the accuracy of the studies.

Writers insist that it can’t be possible that people still like and regularly use radio. For example, Nielsen recently found that over 70% of Americans cume radio on a daily basis. Usage of radio far exceeds usage of any other audio medium.

But large numbers of critics question numbers like these. They argue (with virtually no supporting evidence) that with Internet streaming, iPods, and other alternatives, it just can’t be possible that so many people would still use radio.

The fact that new-media supporters constantly attack radio and question any study that shows radio’s strength doesn’t surprise us. What surprises and deeply disturbs us is that radio people are just as critical.

It seems that too many people working in radio no longer believe in radio and instead believe that it is just a matter of time before new media consumes terrestrial radio.

We realize that the last few years have been difficult for radio. Many fine broadcasters find themselves out of work. Too many radio stations have been stripped of essential resources, working with skeleton staffs (or no staffs) and few (or no) tools to effectively program.

For those who became victims in one of the recent radio group financial implosions, it must be hard to continue to believe in a future for radio.

We can understand the negative attitude of one who still works for one of the meat-axe wielding groups. The fact that negativism pervades radio well beyond the relatively small proportion directly impacted is of greater concern.

We hear from people who do not work for one of the troubled groups who come to work in radio everyday rooting for new media. They see themselves as the “mop-up crew,” killing time and taking home a paycheck until someone shows up to turn off the transmitter.

Radio’s ultimate fate depends on radio’s collective belief in itself.

If broadcasters don’t believe in radio, it is just a matter of time before listeners stop believing in radio. If broadcasters from general managers to weekenders sleep-walk through the day not caring what their station sounds like, then it is just a matter of time before listeners pick up on the lack of concern and drift away.

The advertising recession will end one day. Some believe things are already picking up. Forward thinking owners will soon realize that cutbacks have hurt their stations and start adding back some of the resources they cut. As dark as things seem today, things will get better.

A change in attitude will take longer. Radio people working in the trenches beaten down with bigger work loads and fewer tools will remain suspicious and skeptical long after the turn has begun.

The future will be bright for those radio people and stations that managed to maintain a positive attitude during these dark days. If you believe that radio’s glass is half full, not three-quarters empty, then the opportunities will be even greater than before radio’s near death spiral.

Radio is facing a difficult challenge and to succeed it needs believers. If you sincerely believe that digital is going to roll over radio and there is nothing radio can do to stop it, perhaps it is time to move on. You will feel better, and you’ll make room for someone that believes radio can win.

Note: This first appeared in FMQB with suggestions on how to maintain a positive outlook. Read the original at: http://www.fmqb.com/article.asp?id=1595113.

Pandora: Radio's Future? Or Radio's Past

2009-11-16T09:59:38-05:00

In the markets it serves, Arbitron measures listening to all stations, regardless of whether they are clients of Arbitron (assuming they are encoding in PPM markets).

In contrast, Ando Media, the Arbitron of Internet radio, measures listenership only of its clients. This means that Ando’s ratings provide a foggy incomplete picture of what is happening with online radio.

The fog cleared a little this month when Ando released September ratings with Pandora included. Pandora is one of online radio’s superstars. New-media pundits have declared it’s ability to create unique playlists for each subscriber the future of radio.

We wonder whether Pandora is more about radio’s past.

Decades ago before research transformed radio, many Program Directors thought it was their job to educate listeners. Songs were chosen not because people liked them, but because people were supposed to like them.

Even after research started showing us that few listeners liked more than a couple hundred songs, “old school” PDs insisted on playing thousands of songs–for variety.

Gradually the overwhelming evidence started sinking in and radio evolved from playing what Program Directors liked to playing what listeners liked.

Pandora is a step backwards. But don’t take our word for it. Look at Pandora’s ratings.

The headlines have focused on Pandora’s top line number: 81,328,769. This is the number of times people (or more correctly IP addresses) tuned to Pandora in a week, what Ando calls Session Starts. It certainly is impressive, but given the buzz, it is understandable that people are checking it out.

More interesting is a metric that has gotten little attention, Average Time Spend Listening. In Ando’s terms, it is the average length of each session in hours. The accompanying graph at the left is a ranker of ATSL. Note that Pandora is dead last at one hour.

New-media supporters argue that broadcasting is dead. The future is narrowcasting, offering a different product to each listener. That’s what Pandora does.

If narrowcasting is the future, then TSL should be higher for Pandora than for broadcasters. It isn’t. It is actually lower than TSL for groups streaming their terrestrial signals. Many of the groups have three times the TSL as Pandora.

Pandora apologists will argue that the terrestrial groups have dozens and even hundreds of streams, while Pandora is a single station. But if that explains Pandora’s lower TSL it raises doubts about all the pundits’ predictions about the future of radio.

Maybe Pandora is radio’s past, and today’s broadcasters are radio’s present and future.

Changing the Rules During the Game

2009-11-13T10:35:20-05:00

Ando Media released its latest webcast audience ratings the other day. It created quite a stir, but unfortunately, the dust-up with media buyers obscured the real story.

Ando Media has changed the rules of the game in the middle of the game. And those rule changes have serious implications for both radio stations and Arbitron.

Ando has abandoned the traditional AQH and Cume metrics carried over from Arbitron, replacing them with three new measures: Average Active Sessions, Session Starts, and Average Time Spent Listening.

At the same time, the company has switched from Arbitron’s five minute requirement to a new, much more lenient, one minute requirement. While this may seem a trivial matter that has nothing to do with radio, read on.

Ando Media’s CEO Robert J. Maccini declared:

The five minute rule was a legacy of terrestrial radio measurement and did not accurately reflect digital consumption habits, particularly with mobile devices.... Terrestrial radio AQH and Cume measurements are not the best metrics for measuring today’s audience delivered via a digital channel and do not accurately pertain to online audio.... The changes were made in response to requests from both the publisher and the agency community.

Perhaps, but we believe there is a little more going on. We think the changes were made to distance Internet radio from terrestrial radio and make Internet radio look stronger.

To understand, we have to look at the new measures and how they differ from traditional AQH and Cume. You probably know what AQH is, and Ando measures it similarly to Arbitron. Ando’s Cume definition is the thing to note. Here’s what they say about Cume:

Cume (is) the number of unique persons (defined as the number of different IP addresses) who listened to a station for a minimum of 5 minutes within a reported time period. Listening period of less than 5 minutes are not included. All 20 listed groups represent multiple channels of programming and CUME for a particular group is the number of unique listeners unduplicated across all the channels reported.

Cume and AQH were replaced by the three new metrics. Here’s how they define them:

Average Active Sessions: The average number of streams of one minute or more that are active within a time period.
Session Starts: The number of streams of one minute or more started with a time period.
Average Time Spent Listening: The average number of hours for each session lasting more than one minute within a time period.

The first big change is reducing the five minute rule to one minute. Maccini speaks of digital consumption habitswhich is really code for low TSL. People don’t listen very long to online media. Shortening the five minute rule captures more of the “drive-by” listening that takes place online.

A second change is the abandonment of Cume. While Ando Media calls it Cume, the company really counts IP addresses, not people. It really doesn’t know how many people are actually listening. It could be no one, it could be an entire college dorm floor.

No longer reporting Cume acknowledges this. Reporting Sessions simply indicates how many devices are “tuned” to a stream. The change is not a trivial one.

The table compares a report from last year to the latest. (Click to enlarge.) The first column is the old AQH. The second is the new Average Active Sessions. The third column is the old Cume, and the fourth column is the new Session starts. Notice that most of the stations have similar AQH and Average Sessions, but the Session Starts numbers are tremendously larger than the old Cume.

What’s going on?

Ando measured Cume as radio did, counting each IP address only once for a group of streams. Now Ando counts each Session within a group so that companies with multiple streams can have the same IP Address counted over and over.

It is like combining the Cumes of WLTW and WHTZ without taking into account that many of the same people listen to both stations. We don’t add Cumes together because it inflates the apparent combined audiences, but apparently, its ok to do it for web stations.

These changes portray online radio as much stronger than the traditional metrics of AQH and Cume did. It also opens online radio ratings up to more manipulation.

Ando Media has applied for MRC accreditation, and they seem confident they will receive it. If they do, MRC will have blessed metrics like Session Starts.

Broadcasters should demand that Arbitron start producing metrics similar to Ando Media’s. Eliminating the five minute requirement and combining station cumes will put radio back on equal footing with online radio, and once again show the relative strength of terrestrial radio.

Newspaper’s Digital Dead-End. Is Radio Next?

2009-11-09T10:08:49-05:00

Radio’s biggest critics are telling us that the digital age is passing radio by. We’ve all heard self-appointed saviors of radio say that we have to invest in digital in a big way to survive.

The urgency of developing a digital strategy is accepted as obviously true. But is it?

We recently drew attention to an article in Time about Alpha Broadcasting’s Larry Wilson. The article outlined his strategy for growing his newly acquired stations:

Wilson's strategy is to take radio back to its local roots while at the same time keeping his company private and well capitalized. "When you cut the costs out of this business, you cut the product. Then you don't have anything to distinguish you from iPods or anything," he says.

It's also a repudiation of the consolidation strategy, which tried to increase profits by centralizing sales and programming. "People say, 'We'll program five markets from X city and we'll have one team doing it, and we'll save all this money,'" he says. "Doesn't work. Listeners want to talk about the mayor, the new light rail that's going in, the local sports teams."

No mention of the Internet. No mention of streaming, social networks, or Twitter. His strategy is to invest in the product. Be local and live. So Larry Wilson wants radio to go back to where it was. The pundits say terrestrial is dead. Larry Wilson is saying just the opposite.

So who’s right?

SNL Kagan has released new projections for online radio revenue through 2013. The good news is that online revenue is expected to more than double over 2008 figures. The bad news is that by 2013, it will still represent less than 5% of radio’s total revenue. (Click for larger graph.)

If the Kagan projections are correct, 14 years from now, 95% of radio’s revenue is still going to come from the terrestrial signal. Shouldn’t that be where the major investments are made? Doesn’t that suggest that Wilson is on the right track? Shouldn’t we first make sure we are investing in the terrestrial product to make it as good as it can be?

If digital initiatives are only going to contribute 5% of radio’s revenue, what’s the payoff if radio sinks a lot of money in digital? Why spend a lot of money for something that might yield a fraction of the return that investing in the terrestrial product might yield?

Digital boosters will argue that ignoring digital opportunities is short-sighted. Perhaps ignoring the Internet will ultimately hurt radio, but newspaper’s experience investing in the Internet should serve as a warning to radio.

It may not seem like it, but radio’s downturn is relatively recent compared to newspaper. Newspaper’s wake-up call came in 2001, when print revenue started heading south.

Newspapers responded to declining revenue by drastically cutting print expenses. They fired reporters, consolidated staffs, eliminated whole sections of the newspaper, and in many ways began producing a print product quite inferior to the newspaper it produced in the past.

They felt the future was online, and to hell with the print product. They plundered their print product to finance their digital push.

Did it reverse newspaper’s fortunes? No.

For a short time, digital revenue grew, but never came close to replacing the lost paper revenue. Then in 2008, even the digital product stopped growing. Now newspaper finds itself with a hollowed out print product and little to show for its digital efforts.

We believe that if radio continues to debase it’s terrestrial product in the belief that all that matters is radio’s digital future, it will suffer the same consequences that befell newspaper.

If stations can fully support the product and continually improve it while at the same time investing in digital, great. But the lesson from newspaper is that digital solutions can’t compensate for a weak product.

We think Larry Wilson is on a better course to turn radio around. Invest in the product, serve the community, and abandon programming consolidation.

A Timely Dose of Reality

2009-11-05T14:14:38-05:00

Hats off to Inside Radio. After a couple of years of muddled mis-directed press release journalism, it seems to have rediscovered its mojo. Lately it has been producing some insightful pieces on issues that really impact radio.

Tuesday’s entire front page was devoted to the findings of an observational study funded by Nielsen and conducted by Ball State University’s Center for Research Excellence. It demonstrated the continuing relevance and importance of traditional radio to music listeners.

We first reported on the study back in June here, and since have mentioned a few implications from time to time, but the audio aspects of the study hadn’t been fully crunched yet. You can now read a summary of the audio report here. We’ll have more to say about the radio findings soon.

The study is a valuable dose of reality that disproves a lot of the new-media propaganda. The other trades covered the story, but not with the thoroughness of Inside Radio. Well done.

The study should be required reading for pontificating new-media pundits and radio’s doubters.

Larry Wilson's Alpha Broadcasting in Time

2009-11-04T10:23:58-05:00

We recently noted a turning point regarding how radio was treated by other media. Left for dead just a few months ago, upbeat stories on radio are starting to appear even in mainstream media.

The latest example is the story of Larry Wilson in Time written by Belinda Luscombe. The title, Rescuing Radio, says it all. It portrays Wilson as a savvy broadcaster who got out at the right time, and now thinks it is time to get back in, buying stations in Portland, Oregon.

Wilson’s take on what went wrong is explained this way:

Wilson's strategy is to take radio back to its local roots while at the same time keeping his company private and well capitalized. "When you cut the costs out of this business, you cut the product. Then you don't have anything to distinguish you from iPods or anything," he says.

It's also a repudiation of the consolidation strategy, which tried to increase profits by centralizing sales and programming. "People say, 'We'll program five markets from X city and we'll have one team doing it, and we'll save all this money,'" he says. "Doesn't work. Listeners want to talk about the mayor, the new light rail that's going in, the local sports teams." Wilson acquired the rights to air the games of three local sports teams for his FM sports channel. According to Arbitron, it has already started to poach listeners from the local AM sports channel.

Radio’s Chicken Littles continue to tell us the sky is falling. The fact that more and more journalists are tempering their radio is dead stories says otherwise.

Pandora Will Fail. Terrestrial Radio Will Prevail.

2009-11-03T16:16:28-05:00

Pandora will fail. Investors who have pumped $56.3 million into the company in hopes of reinventing radio will discover that listeners are actually pretty pleased with radio as it is.

Pandora will not be the only pure Internet radio station to fail, but its failure will be all the more spectacular for its overreaching and confidence that musicians can create better radio than radio programmers.

Pandora is different from other Internet radio stations. It creates unique playlists for each member based on a complex algorithm:

Together our team of fifty musician-analysts has been listening to music, one song at a time, studying and collecting literally hundreds of musical details on every song. It takes 20-30 minutes per song to capture all of the little details that give each recording its magical sound - melody, harmony, instrumentation, rhythm, vocals, lyrics ... and more - close to 400 attributes!

Rob Walker of The New York Times recently wrote about the company noting:

Pandora's approach more or less ignores the crowd. It is indifferent to the possibility that any given piece of music in its system might become a hit. The idea is to figure out what you like, not what a market might like.

More interesting, the idea is that the taste of your cool friends, your peers, the traditional music critics, big-label talent scouts and the latest influential music blog are all equally irrelevant. That's all cultural information, not musical information. And theoretically at least, Pandora's approach distances music-liking from the cultural information that generally attaches to it.

The majority of the company’s employees are the musicians and musicologists who deconstruct songs according to beats per minute, chordal patterning, the importance of lyrics, and dozens of other criteria.

Pandora is often cited as an example of where radio is headed. Let’s hope not.

A song’s appeal cannot be reduced to a set of scored criteria. It cannot be reduced to objective criteria, particularly by musicologists and musicians. And what evidence is there that the criteria used are valid? Musicians and listeners have very different ideas about songs, particularly songs that they like.

We once showed an open minded artist the results of a music test that included his songs. He was initially flabbergasted. He couldn’t understand why people liked some of what he considered his weaker songs, while they disliked some of his finer work. And the biggest hits were not necessarily the songs that got the biggest reaction performed live.

Putting together a radio station playlist is an art. The very best radio stations are programmed by men and women who have an innate sense of what the station’s listeners want to hear. Music testing helps in the process, but only to a point. Ultimately it is the programmer’s interpretation of the results that determines the sound of the station.

Musicologists with algorithms will never out program a PD with the right ears.

Now Pandora has announced a goal of making its service available on pretty much any connected device from cars to Blu-Ray players. It may be able to weasel itself onto the appliances, but bad radio is bad radio even if it comes through a kitchen device.

Pandora is toast.

More New-Media Twisted Logic

2009-10-28T16:47:21-04:00

With predictable solemnity, the usual suspects recently announced further evidence of radio’s imminent demise.

Citing the results of TargetCast’s new study Consumer Perspectives on How Media Usage Patterns are Evolving in the Digital Era, one report declared: Study Reinforces Idea Radio Less Relevant to Younger Demos.

Another declared:

The bottom line should be taken as a shot across the bow by broadcast radio: "41% of those surveyed indicate that radio is still relevant in today's media environment. According to respondents, radio provides a great venue to discover new music that cannot be experienced elsewhere.

Maybe somewhat surprising, respondents overall prefer to listen to music through the radio station vs. Internet stations or on their mp3 player. " However, within that overall conclusion there are several key demographics that are indicating a willingness to transfer their affinity to digital music sources including personal devices such as Internet radio, ipods, iphones and other multi-media devices.

We’ve noted in the past that positive news about radio is often reported with a large dose of expressed doubt or skepticism. This is another example. Maybe somewhat surprising is a phrase that only someone who has completely ignored a long trail of similar study results could use, but we see it all too often.

Let’s look at what the study really says.

The study begins by asking participants whether they are following each medium more, less, or about the same as the year before. Note that this question is a highly subjective measure of what people think, and not a true behavioral trend.

The graph at the top is our presentation of the results. (Click on all graphs to see better.) One way to judge radio’s perceptual strength with listeners is to combine the more and same responses. A medium in use before the participants were born is not likely to display a great deal of positive momentum. Given the blistering barrage of new-media hype, radio just needs to hold its own, and in the study it does.

Radio comes in fourth, just behind television. Television edges radio in more responses, 19% to 12%, but all and all a respectable performance for radio.

More interesting is the Internet responses. In regards to the Internet, the study differentiates between information and entertainment usage. (The report is devoid of any kind of methodological discussion, including an explanation of why and how the two uses were distinguished.)

Only one in four participants claims to be using the Internet more for entertainment. That’s an amazingly low number given the buzz about the Internet, particularly entertainment sources like Hulu and Internet radio. TargetCast may have detected an approaching inflection point for the Internet. That wouldn't be good for a medium hell-bent on replacing traditional media.

The lack of momentum for the Internet may explain the generally high marks people give television and radio in the study.

For example, a majority of participants prefer radio over online, mobile, or media player sources. Even among 18-24 year olds, media players just edge out radio. With older adults preference for radio is three to one. Again, given new-media’s hype, in this kind of comparison a draw favors radio.

Radio beat online and mobile sources even with 18-24 year olds, and with 25-64 year olds, radio won by a five to one ratio.

The questions later in the study are of dubious value, but interesting nevertheless. The study asked this question: Which medium is not as relevant today?

We generally avoid this type of question because people find it confusing. The presentation of the results also muddle the issue. The question appears to ask participants to pick one medium, but the results are given in percentages of agree, disagree, and neutral.

Whichever way the question was actually presented, the results are that 28% agree that radio is not as relevant today. That compares to the 41% who disagree that radio is not as relevant.

See the problem with the question? One has to disagree with the question to express a positive response. The 41% favorably compares to television’s 55%.

Radio’s strengths also come through in the study. People enjoy discovering new music on the radio, prefer it over players and online sources, have no difficulty finding a favorite station, and prefer to listen to the terrestrial signal rather than online.

Unfortunately, you wouldn’t know these things by reading the stories written about the study. Results that one author called maybe somewhat surprising (read positive) about radio somehow rarely make it into print. The fact that new media did no better than it did may ultimately be the headline that got away.

Advertisers (Re)Discovering Radio

2009-10-27T18:17:16-04:00

We recently noted here that radio was beginning to attract attention again. Writers were doing more positive stories about radio, positive research on the medium was finally being acknowledged, and we were seeing fewer radio is dead stories.

Now Advertising Age has rediscovered the live-read. There’s nothing new in the article, but it is further proof that writers, editors, and the media community are starting to notice radio again.

Here’s how the AdAge article begins:

Radio ads delivered by on-air talent, one the oldest forms of sponsored entertainment, are back. Called live reads, the ads are often worth 1.5 times the average 60-second spot, say insiders.

Live reads work best as part of an integrated marketing campaign or part of the personality's ongoing relationship with a brand, says Greg Kahn, senior VP at Optimedia, which has inked multiple deals with radio talent this year.

Clear Channel, for instance, is working company-wide to connect local talent with advertisers, and has lured Las Vegas Tourism and Purina onto the air. At Clear Channel, DJs fill out personality profiles listing the products and services they're most interested in, to be used as a lead-generation tool for the sales teams.

Be sure to scroll down to the article's comment section and read the views of Gary Farmer of Louisville, Kentucky. He writes:

I'm surprised radio is even a topic of discussion these days. As a fifteen year industry vet, eight of which was spent in radio but now on the agency side, I believe radio has lost almost all relevance and is most often times an after-thought by "smart" agencies.

Gary apparently feels that a medium that reaches over 90% of Louisville’s adults is irrelevant. He’s probably putting his client’s money into Internet search, where fraud is rampant and 95% of his client’s money is wasted, or social networking, where the average business has 100 fans. Great call, Gary.

Why No Arb iPhone App?

2009-10-27T16:45:40-04:00

The number of iPhone applications has reached 85,000. Today’s iPhone, along with a growing number of smart phones, can do virtually anything from creating scatological noises to actually making phone calls. One serious absence (from radio’s perspective) is an Arbitron app.

During Media Audit’s ill-fated run at creating an alternative to Arbitron’s PPM, they produced a study that showed that 35% to 40% of participants were more likely to routinely carry a cell phone than a pager device (PPM).

A White Paper entitled New Study Indicates Pager-Like Device May Be Reason for Lower Listening With PPM asked this question:

Suppose you did agree to participate in the study and you have just left home when you discover that you have forgotten to bring the monitor with you. If the monitor was your cell phone/pager and you were a few minutes from home, would you go back home to get it?

Three quarters of participants would definitely or probably go back for the cell phone, but only half said they would go back for the pager-like device. The graph at the left shows the proportion of people that would definitely go back. (Click to enlarge.)

I doubt too many of you find the results surprising. A cell phone is a valuable communications device. The PPM is just something to make some easy money.

Three years ago when Media Audit and Ipsos proposed using a smart phone to measure radio, smart phones were just entering the market, and not all that smart. Today in addition to the iPhone, we have Blackberry, Android, WebOS, and other smart OS phones that can use specialized applications.

Building PPM detection into a smart phone is more than just an app, but what about turning a smart phone into a radio diary? We know that most people don’t carry their diary with them. They fill it out hours and even days after the fact.

If participants filled out an electronic diary on their smart phone (perhaps with the nudging of occasional text messages or recorded messages), we could move the recording a little closer to the listening.

A little cooler than producing PPM meters in different colors, one of Arbitron’s ideas to get young people to carry the thing. Seems like a pretty straightforward way to get the mobile generation on board. Arbitron Advisory Council, what do you think?

93% of Americans Don't Use Twitter, Facebook, or MySpace!

2009-10-26T11:09:39-04:00

Use Tweeter? A member of Facebook or MySpace? If not, you probably think you’re one of the last few people left who aren’t. Given the persistent buzz about social networking, you’d think that everybody is using social networks.

Turns out it’s just more new-media hype.

The Wall Street Journal recently ran a story with the headline A Fifth of Internet Users Now Share Status Updates. It reports on the findings of the latest Pew Internet & Amercian Life Project on Twitter and social networking. Follow this link to the full report.

If a fifth of Internet users are using social networks, that means four out of five Internet users are not using social networks. It makes you wonder what the buzz is all about when four out of five people don’t do it, but the real numbers are even worse.

The 19% is the percentage of Internet users who have ever used these social networks. Ever!

It turns out that only 9% of Internet users used one of the social networks the day before they were asked. Since the purpose of a social network is for friends to regularly keep in touch with each other, it only works if used regularly. So to assess the real impact of social networking, the “day before” number is more interesting.

That means a more accurate estimate of social network usage is probably just one in ten Internet users. But it’s even worse than that. Pew found that 28% of Americans don’t use the Internet, so when you factor that in, it means only 7% of American adults 18+ are actively using social networking.

That means 93% of Americans don’t actively use social networks.

The next time you’re reading a blog or radio trade beating up radio about its slow integration of social networking, remember this number.

We believe radio stations should tweet and be on Facebook and MySpace. These are valuable means to connect with listeners, but keep social networking in perspective. It appeals to a small, socially active minority of listeners.

Social networking is higher in younger demos, but it isn’t as prevalent as the pundits would lead you to believe. Usage among 18-29 listeners is double the 18+ number, but social networking is still an activity used by a minority of even young listeners.

Even if you’re a CHR station remember that social networking is like the request line and texting. There is a small group of extremely active listeners that use each to communicate with the station. The majority of listeners don’t.

Half Your Ad Money Wasted? Try 95%

2009-10-21T15:06:02-04:00

One of advertising’s oft repeated phrases is Half my advertising money is wasted. I just don’t know which half. Interestingly, the British attribute the quote to William Lever, while American sources attribute it to John Wanamaker. Regardless of who said it first, you’ve probably heard the phrase.

Turns out that when it comes to online advertising, Lever and Wanamaker were wildly optimistic. A new study shows that half of ad impressions and 95% of clicks are fraudulent.

As reported in MediaPost:

Click fraud continues to plague online advertising, but many just want to sweep it under the rug. Radar Research managing partner Marissa Gluck calls it "the dirty little secret of the online ad industry that no one wants to talk about."

Perhaps that's because data released Thursday in a study conducted in July reveals that more than half of ad impressions and 95% of clicks in online ad buys were fraudulent. Gluck compiled and analyzed the findings published by ad optimization company Mpire, Seattle, Wash., with help from its AdXpose technology.

To see how big of an issue this has become, do a Google on click fraud.

Apparently the rampant fraud isn’t deterring advertisers from diverting more and more dollars from traditional advertising to online. Maybe radio stations should take a cue from online. Don't increase the spot load. Just play music over half the spots you run.

New Study: Internet Radio Plays 800,000+ Stiffs

2009-10-21T10:32:41-04:00

A “study” making the new-media rounds illustrates the extent to which Internet radio boosters will go to cast commercial radio in a negative light. The study also inadvertently illustrates why pure Internet radio is failing and will continue to fail to attract any measurable audience.

A monitoring service, streamSerf, claims to have compared the number of artists played on terrestrial and Internet radio stations last month and found that Internet stations played 804,572 more artists than terrestrial stations (defined as commercial plus non-commercial stations).

There are several methodological issues that concern us about this study. We’ll get to those in a moment, but let’s run with the results for a moment. Here’s how audio4cast characterized the results:

It's not shocking to learn that Internet radio is more diverse. There are more choices for the listener, and more determination by the stations themselves to provide alternative music to the basic cookie-cutter formats and playlists provided on broadcast radio. It is stunning to learn that Internet radio's list of unique artists is greater than broadcast radio's by 3600%.

Basic cookie-cutter formats and playlists?

Let’s reflect on that phrase. Remember satellite radio? Beyond AM, beyond FM? We were told that commercial radio had become predictable and stale. Satellite radio with nearly 100 channels of music would reinvent radio, offering more diversity, finding new artists.

The one and only time that Arbitron measured satellite radio, it found that virtually no one listens to the majority of the channels. There are many channels where there are more people in the studio than people listening. The only channels that attract significant numbers of listeners are those that resemble commercial radio stations. There is a listener-driven reason for playlists. There is a listener-driven reason similarly formatted stations sound similar.

There is no reason to expect successful Internet radio to be any different. The vast majority of Internet radio listeners tune to stations that play the same music played by commercial radio stations. We can see this from the study’s own results. Look at the list of the top 10 terrestrial and top 10 Internet artists (click to enlarge).

It is clear that the two lists are very similar. However, that’s not how the results were interpreted:

Also interesting is the list of artists that get the most plays on broadcast stations versus Internet radio stations. While some of the top ten artists are the same on either list, others are very different.

Very different?

The truth is that there is only one artist on the Internet list that stands out. Amin Van Buuren is ranked 6th on the Internet, but 7,811 on terrestrial. The other top ranked Internet artists include Madonna, Metalica, Lady Gaga, The Rolling Stones, and similar mainstream artists.

So having shaken off the shackles of basic cookie-cutter formats and playlists, successful Internet radio stations end up...playing the same artists heard on commercial radio stations.

But these are just the top 10 artists. What about the other 829,961 artists Internet stations play? According to the company, terrestrial radio played only 25,399 artists. Since thousands of radio stations have been testing their music now for nearly three decades, it is a safe bet that we have identified virtually every song that listeners want to hear.

If you have tested your music for any length of time, looking for new and different songs to play, you know that there are a lot more stiffs than hits.

We have found the same thing in every format, from Classical to Hip-Hop. Across the entire spectrum, there are only so many songs worth playing (if your goal is to have a measurable audience). That means there are only so many “marketable” artists that listeners want to hear.

We at Harker Research have been testing music for thirty years now. We find it hard to believe that there are 25,399 artists worth playing on the radio. We can only assume that the inclusion of educational and non-commercial stations ran up the numbers.

The study claims that Internet radio plays 3,600% (actually 3,168%) more artists, and pundits see it as a big plus for Internet radio. What it actually means is that Internet radio stations are playing over 800,000 artists that people don’t want to hear.

Before the Internet, artists that didn’t deserve to be heard beyond their family and closest friends toiled away in garages and empty coffeehouses. Years of practice would separate the good from the bad. The artists that got better found success. The majority went back to their day jobs.

Now anybody at any level of accomplishment can be heard on some quirky Internet radio station someplace. We suspect that the actual number of artists played on Internet stations is considerably higher than the 800K+ that the study found.

Paul Mockenhaupt, founder of the company, declared: It's the new, fresh, undiscovered, local, home grown music that's filling the internet airwaves! One report’s author adding: Internet radio gives voice to the long tail of music, providing entry for many musicians that have never had a platform before. That, he (Mockenhaupt) says, is the "magic" of Internet radio.

The magic of Internet radio is that it operates in a fantasy world. The notion that radio can operate in a “long tail” world is a fantasy as long as radio (whether it be terrestrial, in outer space, or on the Internet) depends on listenership as a measure of success.

But what about those numbers? How can a monitoring service be so precise? The reports are rather vague on the methodology of the study, streamSerf has no mention of the study on their web site, and we got no response to the questions we put to the company.

The web site boasts that it monitors thousands of radio stations:

Our patent-pending technology allows us to listen to thousands and thousands of radio stations at the same time... Satellite, Internet and Terrestrial stations. As a matter of fact, we are currently listening to over 30 MILLION HOURS of radio per year in 65 countries across the planet. If there's a song being played on the radio, there's a good chance we hear it.

It certainly sounds impressive, but let’s do a little math based on some pretty basic assumptions. We suspect that the company is monitoring station streams, not their signals. There are 14,355 licensed radio stations in the US, many of them not streaming. There’s a little less than another hundred on Sirius XM. Those are the easy numbers. How many Internet radio stations are there? Of those, how many are exclusively Internet? There are thousands, if not tens of thousands.

Thirty million hours of monitoring sounds like a lot, but that has to be spread across many radio stations. There are 8,760 hours in a year, so that means the company on average is monitoring 3,425 stations each hour of the year.

Considering that there are nearly 10,000 US FM stations alone, the company can’t be monitoring terrestrial radio stations continuously. It may be monitoring stations for a few hours at a time, or monitoring a handful of stations continuously. In either case, it means the company is taking a sampling. How the sample is chosen can have a major impact on the outcome.

More problematic is how one monitors tens of thousands of Internet stations along with the terrestrial and satellite stations. As with terrestrial stations, the only practical way is to either monitor a random cross-section of Internet stations continuously, or monitor every station known for just a few minutes.

Based on what we see, it appears that the 25,399 versus 829,971 artist comparison is more likely based on an educated guess and wishful thinking than one based on a month long continuous monitoring of all terrestrial and Internet stations.

It is making the rounds because despite its flimsiness, it provides one more opportunity for new media pundits to dump on commercial radio. The good news is that if the numbers are based on crude estimates, maybe terrestrial radio isn’t playing 25,399 artists. We hope not.

At Least Steve Morris Pretended to Care.

2009-10-14T08:00:00-04:00

We are coming up on an important two year anniversary for PPM, one that Arbitron will probably not be celebrating. We thought it would be a good time to see what has changed since that fateful day almost two years ago.

On November 27th, 2007 a shocked industry woke up to this announcement:

Arbitron announced today (11/26) that it will delay the commercialization of its Portable People Meter (PPM) radio ratings service in nine markets.

During the delay, Arbitron will continue to work with customers, the Media Rating Council, other industry organizations and community groups on the research and business issues related to the Portable People Meter radio ratings service in local markets.

Pressure had been mounting because of repeated sample and data processing problems. Steve Morris, then CEO of the company, stated:

We remain confident in the audience estimates that the Portable People Meter service is producing. However, over the past three weeks, feedback from our customers, the Media Rating Council and other constituencies has led us to conclude that the radio industry would be better served if we were to delay further commercialization of the PPM in order to address their issues.

We already have a number of initiatives in the pipeline for implementation in the first quarter of 2008 that we believe will improve the performance of our PPM samples. We expect that the Media Rating Council will be a particularly valuable source of guidance and advice on the more technically oriented aspects of this review and improvement process and we intend to work closely with the members of the MRC over the next several months.

It wasn’t until June 12, 2008 that Steve Morris announced that the PPM roll-out would resume, declaring: It's time to move forward with electronic measurement for radio.

This was his explanation for resuming roll-out:

We have improved our PPM samples in the four key areas we outlined last November. We have enhanced our ability to deliver PPM sample targets. We've improved the composition of our PPM panels, especially among the 18-34 demographic. We've raised the day-to-day cooperation rate of our PPM respondents. We've also put in place a number of programs designed to have a positive impact on response rates. Our commitment to continuous improvement means that we will keep working on these metrics as we go forward.

He added: We are working diligently with the Media Rating Council in order to achieve MRC accreditation for all our PPM markets.

A month later Morris announced a 10% increase in PPM sample, declaring: The PPM sample program we unveiled at the Advisory Council Meeting is a significant step forward.

Fast forward to October 2009. Arbitron has a new CEO, Michael Skarzynski who declares:

Over the past 9 months, Arbitron has made significant advancements to improve sample quality. As part of our ongoing quality initiatives, we have accelerated the prioritization of increasing our cell-phone-only sample. This new plan to increase sample targets for Persons aged 18-54 complements our recently announced commitment to increasing the number of cell-phone-only households in all PPM markets. We continue to lay the groundwork to help ensure that the radio industry has the state-of-the-art solutions and services that it will need to compete for the long-term.

While some reports essentially reprinted the press release, credit should go to those who highlighted the fact that Arbitron was actually back-stepping on its 2008 promise to the Advisory Council. It was delaying the deadline to reach the promised 10% increase in sample.

As quoted in Inside Radio, Arbitron SVP Bill Rose stated: We felt it was important enough to do those two initiatives and extend the sample increase by six months. At the end of the day, the end result is the same. Inside Radio added: (Arbitron) felt it wasn’t economically feasible to increase both cell-phone only households and in-tabs at the same time. Arbitron believes its phase-in approach will be an adequate "down payment" on its promise.

We now have two years of press releases that essentially say the same thing. Arbitron is working on initiatives to fix PPM. What they are working to fix today, is for the most part what they assured us they were fixing in 2007.

This is a version of Zeno’s paradox. It says that you can never reach a destination, because the distance between you and the destination can always be divided in half. Arbitron seems to practicing their own form of Zeno’s paradox. Arbitron repeatedly promises small improvements that never seem to reach their promise.

There really are no differences between the Steve Morris assurances and the Micheal Skarzynski assurances except the dates. Oh, and one other thing.

Steve Morris seemed to understand that Media Rating Council accreditation was important and repeatedly assured radio that Arbitron was working to gain MRC approval. We’re not seeing that assurance as much with Skarzynski.

Perhaps it has to do with the MRC memos exposed by the House Committee for Oversight and Government Reform. As reported by The Hill:

The Media Ratings Council (MRC), the independent industry body that accredits media ratings systems, turned over its audits of the PPM system to the oversight committee under subpoena. The committee put out a statement to inform the public of the serious flaws in the PPM system that these audits reveal.

According to the statement put out by the committee, the MRC's documents indicated "persistent problems" with Arbitron's minority sample audiences. For example, the committee reported that subpoenaed documents showed that a relatively small subset of individuals is providing usable data. In New York City, Arbitron recruited a sample audience of 5,400 people. But only 2,700 persons - half of the sample - provided data. The committee reports that "the radio listening habits of over four million ethnic minorities are represented by only 500 Arbitron recruits."

It is hard to put a positive spin on the release of the MRC memos. Arbitron tried by declaring:

We were aware of the Committee's contact to the Media Rating Council (MRC) and we are extremely surprised and disappointed at the analysis and erroneous conclusions reached by the Oversight Committee Staff and communicated in their press statement.

The press release does not explain what analysis or erroneous conclusions the committee made. Perhaps Arbitron could release the MRC memos with Arbitron’s critique so we could judge for ourselves whether the committee distorted or exaggerated the problem.

In any case, perhaps Mr. Skarzynski could update broadcasters on the progress of MRC accredidation. At the same time, he could declare a date when he will release a press release titled: Arbitron achieves all PPM quality goals and now provides the industry everything it has been promised.

Slow Down: The Folly of First Movers

2009-10-13T08:00:00-04:00

Advertising agencies, pundits, and radio’s own leaders regularly castigate radio for being woefully behind the times. They harangue stations to spend more on developing an Internet presence, spend more on social media, spend more on streaming, spend more on multimedia, spend more on mobile. Spend, spend, spend.

We’re assured that if we just throw enough money at new digital opportunities, then radio will be relevant and hip again. They claim the cost of doing nothing is far greater than spending all this money.

Oh really?

This is calledthe First-Mover Advantage. The theory is that you can’t let the other guy do something first. Being first at something gives us a leg up on those that follow. It is why venture capitalists threw money at every half-baked idea during the dot-com bubble.

The tremendously expensive failures during the bust that followed the dot-com bubble should serve as a warning to those broadcasters who believe the pundits. There’s little evidence to support the first mover advantage. Waiting to act, being a second mover, is generally safer and more profitable. And you still won’t miss the digital revolution.

History has shown that while some first movers succeed, the majority who are first pay a very high price, and still often fail. If you lived in New York City at the turn of the 20th century, would you have been better off owning one of several horse-drawn hack businesses or the only automobile taxi service? It turns out that the first New York taxi service went bankrupt. Then the second taxi service went bankrupt too. It took three tries before motorized taxis became profitable.

While the world moves a little more quickly a century later, the pitfalls of moving first remain.

Apple’s Newton, the first PDA, was a failure. Palm Pilot dominated the category for years. In contrast to the first-to-market Newton, the iPod wasn’t the first MP3 player, and the iPhone wasn’t the first smart phone. Both the iPod and iPhone were huge successes because Apple waited, read the market, and then produced products better than the earlier entrants.

How many times have we heard that over-the-air radio is dead? We’re told that the Internet is where everything is happening. The problem is that it isn’t clear what economically viable Internet radio will look like. A number of Internet-only radio companies are burning through a lot of cash in search of revenue, let alone profits.

Two different Internet products are emerging. The first essentially recreates terrestrial radio on the Internet. New-media visionaries have dismissed this model, arguing the future of radio is more along the lines of Pandora.

Pandora is a first mover in creating an entirely new type of radio. Started in 2000, private investors have so far sunk $56.3 million in Pandora, $35 million this year alone. For more on Pandora, go here and here.

Pandora has burned through millions of dollars to attract a claimed 30 million registered members. You can listen to it on your computer, some Internet appliances can stream it, and now there’s an iPhone and Blackberry app. Daily use is something like 50,000 users, but less than 4% of users make up over half of the visits.

Pandora has been advertiser supported, but recently started charging for excessive use and has created a pay tier of members. Revenue was $25 million last year, and are on track to reach $40 million this year. Pandora has yet to turn a profit, but it’s founder claims that the service will be profitable by the end of this year.

The nine year old company has yet to make a dime, but another has already replaced Pandora as new-media’s newest fascination, just based on the buzz in Europe. It is called Spotify. Spotify is not yet available in the US, and it may never be, but its fate says a lot about the status of music on the Internet.

We pointed out recently that pundits rarely predict radio’s death at the hands of today’s inventions. They always claim that radio will die at the hand’s of tomorrow’s invention. Pandora was supposed to kill traditional radio, but we hear less of that today. Now it’s Spotify. Spotify is tomorrow’s death-star for radio.

Maybe, maybe not. Here’s what one British blog noted a couple of weeks ago after the service froze memberships on rumors it was running out of money:

There's no firm evidence that people will ever be willing to pay to stream music in significant numbers and this in turn, exposes a fundamental flaw in the business model: the more people pay for a subscription (thus avoiding the ads) the less attractive the service becomes to potential advertisers. And the more ads it runs, the less music lovers will want to use the service.

The free aspect of Spotify is unsustainable. Across the media, people's faith in the ad-funded free content model is faltering. Advertising will never cover Spotify's costs: its only hope of success is in attracting (paying) subscribers in huge numbers.

More recently, Daniel Ek, founder of Spotify, confirmed the speculation, saying flatly that the service can't keep giving away free music, and wants cheaper music (talking about royalties paid to the labels) and a cut of concert revenue to keep it going.

So to say that the future of Internet Radio is a little murky is an understatement, particularly on the business side. It isn’t clear whether ad supported radio works on the Internet was well as it does on terrestrial radio. It also isn’t clear whether people will pay for a subscription. As we noted some time ago, Rhapsody is suffering massive defections.

We also have to consider whether establishing a more aggressive Internet presence has any potential for a financial return in the near future. One can find considerably more optimistic estimates, but a generally agreed upon estimate for 2009 puts Internet radio billing at about $260 Million. Terrestrial radio did over $17,000 Million last year. That’s 65 times more revenue. No one knows Internet radio’s potential, but even its boosters don’t expect explosive revenue growth from this point forward.

To commit substantial resources to something with so many unknowns is rather premature. It makes sense for station owners to watch and experiment, but not devote resources that might be better deployed on the terrestrial side, where the listeners are. There’s no evidence that Internet radio’s first movers have gained any advantage over late arrivals. Witness Rhapsody’s faltering and the (possibly misplaced) buzz about Spotify.

One can analyze each digital initiative and come to a similar conclusion. Don’t discount anything, but don’t spend a lot of money based on rosy predictions of pundits and vendors.

Harker Research works with clients testing digital concepts and approaches in search of viable digital solutions. Using simulations and controlled environments, we can gather useful qualitative and quantitative information, develop a business plan, and fine-tune the concept without the risks of launching a flawed product financial black-hole.

Professional Pundits & Radio's Paralyzing Stupor

2009-10-12T08:00:00-04:00

Want some easy ink? Declare Radio Dead. No matter how lame and misinformed one’s thoughts are on the subject, they will show up in print. And radio people will read and believe them.

Here’s what professional pundit Mitch (I have a new book) Joel recently said about radio:

I think a lot of people are trying to figure out how to save radio, but I’m not so sure how savable radio is, to be perfectly honest. I do see many opportunities for people within radio to start thinking about transitioning to the more digital-based channels because I think there are many opportunities there.

He added:

I just don’t see young people getting into the traditional form of radio. They are very, very ear-buds-in-ears, highly mobile, pause, forward, rewind, save it for later. “Radio” as a format just does not click, I think, with this next generation, and it’s going to have to reinvigorate itself because there are only so many 60+ year olds who don’t mind making time to listen to some radio.

To put this gibberish in context, we have to first figure out who Mitch (I have a new book) Joel is. A Google search reveals that he is a Quebecer, president of Twist Image, a Digital Marketing agency, and president and founding partner of Distort Entertainment, a Canadian heavy-metal label. He’s a journalist and a publicist. He tells us he is revered in Canada as a speaker on new media. Did I mention he has a new book?

So he’s a new-media hustler. What we call a professional pundit. No experience required.

It isn’t clear what qualifications he has to pass judgment on radio, let alone declare it un-savable. He does admit to listening to some radio, albeit public radio, praising the Canadian Broadcasting Corporation and National Public Radio.

So to summarize, he’s a head-banging CBC listening new-media shill. What is the chance he is going to be upbeat about commercial radio or its future? Maybe zero.

The fact that an uninformed out of touch narcissistic hustler would have such a low regard for radio is understandable. The fact that the views of a person like this could possibly be taken seriously is what concerns us.

If reaction to similar tripe is any indication, radio people will earnestly read Mr. Joel’s pithy comments. They will look beyond his assertion that no one under the age of 60 listens to radio and that modern people aren’t into the “traditional form” of radio. They will search to find the wisdom he must obviously have. He wrote a book, didn’t he?

This business has got to get beyond this consuming sense of inferiority to new media. Radio isn’t going to be helped by new-media professional pundits. They don’t get commercial radio. They never have.They can’t believe that people listen to Sean Hannity or the same 200 songs over and over. They can’t believe that 90% of Americans still listen to radio. They can’t believe that Americans spend any time with advertising supported commercial radio, let alone 22 hours a week .

Professional pundits live in an imaginary world where everyone owns an iPhone, watches Hulu, would never listen to commercial radio, and instead listens to podcasts and Pandora. The only pundits that have any chance of helping radio are the ones that understand that the new-media world is a fantasy. The real world listens to commercial radio, and likes it. When we find a pundit that understands this, he or she will be worth listening to.

Mr. Joel’s comments appeared in a forum for radio people not once, but twice. His insights first appeared in Mark Ramsey’s blog, a frequent safe-house for professional pundits. Not only can you read a summary of Mr. Joel’s thoughts there, you can listen to them for full effect. Then Al Peterson’s NTS MediaOneline picked up the story.

Both sources offered the rambling self-serving drivel without critique or criticism. We suspect that our post will be the only negative critique it will elicit. We may even be taken to task for our narrow-mindedness criticizing Mr. Joel’s sweeping indictment. That’s where radio is right now.

Down deep, a great many people within radio believe Mr. Joel. They’ve lost faith in radio and expect it to just sputter out at some point. In the meantime they collect a paycheck.

Until radio shows the will to defend itself against these attacks, until radio sees through the transparent carpetbagging pundits, and until radio gets out of this stupor of a paralyzing sense of inadequacy, we can expect a parade of book peddling pundits to keep telling us we suck, and radio people thanking them for the advice.

Can the Internet be Saved? Can Radio Help?

2009-10-08T11:08:23-04:00

It is time for radio broadcasters to set aside our differences and join together to help save the Internet. Study the graph to the left and reflect on its implications. (Click to enlarge.)

This is data from the latest Council of Research Excellence study conducted by the Ball State University Center for Media Design. We’ve written about the study in the past, and you can find relevant links here.

The study is unique in that media usage is measured directly while observing people consume media. The numbers shown are not estimates or self-reported behavior. This is real-time recording of what people are actually doing. Almost a million minutes of observation went into the study.

The vertical axis is the observed daily reach of each medium. The horizontal axis is the observed daily consumption in minutes.

Television is the run-away winner. It has the highest reach and twice the daily consumption of any other medium. At the other extreme, you find portable and online video viewing. Virtually no one watches it, and the few that do spend little time with it. This is consistent with the study we cited the other day that showed that 98% of video consumed was done on the television, not on line and not on a portable device.

The important information is towards the middle of the graph. Notice that Online usage is very close to radio usage. Radio has nearly 80% daily reach, and something like 110 minutes of daily listening.

Online reach is slightly less than radio’s, at about 70%, and consumption a little more than radio, almost 120 minutes. Online includes both web surfing and e-mail.

Here’s the problem. If you haven’t heard, radio is dead. Nobody listens to radio anymore. How many boom-boxes have you seen on the subway lately? The whole business is kaput. And online consumption isn’t much greater than radio listening!

The conclusion is obvious. If radio is dead, then it must also be over for online.

Here’s the curious thing. Most radio listening is to local stations. In all but the largest markets it is spread across a couple dozen stations. Most people listen to fewer than a dozen stations, with the majority of quarter-hours going to just two or three. Therefore, most of the quarter-hours go to just a few top stations.

How many web sites are there? How many different places can people go on the web? A million places? A billion places? How much time is devoted to e-mail alone? Think about how thinly spread that 14 hours a week is. If online usage is only 120 minutes a day, once we back out e-mail, how little time can any web site get?

The web has a TSL problem. More than 70% of Americans go on line every day. Yet they can’t spend much more than a couple of minutes on any site. (And research confirms this.)

Most of us in radio have spent a career trying to understand and increase TSL. I think we need to give our online brethren a hand.

Maybe we should write a book.

Delusional Rapture

2009-10-07T14:16:01-04:00

We’ve coined the term Delusional Rapture to explain why so many advertising dollars have been diverted from traditional media to new media. Normally sharp pencilled, bargain hunting media types that have traditionally shopped for the biggest bang for the buck have been transformed into New-Media Kool-Aid sipping true believers.

The audiences are minuscule, the analytics in total disarray, and the impression costs are through the roof. Despite that, frenetic efforts continue to pour an ever growing percentage of declining budgets into new-media’s black-hole in search of the smallest possible audience while paying the highest possible rates.

We reported the latest research here showing that 98% of video viewing is done in front of a television. Yet this week it was announced that several major advertisers were pulling millions of dollars from television to spend it instead on Hulu.

Here’s the explanation:

Smarter targeting, expanded metrics, and the opportunity to test new ad experiences and their effectiveness-these are all critical ingredients for unlocking the full potential of online video and key drivers of this partnership.

So in the middle of a recession and tight budgets, some major advertisers are going to spend less on a medium that reaches nearly the entire country, so it can play with a medium that reaches essentially no one. Perfect for a company like Walmart.

Radio is in the same boat. Advertisers would rather experiment with untested poorly understood new platforms with shoddy (and shady) analytics than buy radio. Radio just isn’t cool enough to get a client to bump-up the budget.

These decisions must be driven by hope and infatuation, because they can’t be explained by the facts. Delusional Rapture. Coming to an agency near you.