Spotify

Latest wake-up call

“I read the news today, oh boy.” It concerns spot radio revenue’s declining performance through the first half of 2014 and the increased revenue for digital darlings like Pandora and Spotify (but not yet making a profit).

Concerned broadcasters believe business is soft in general and look to the encouraging signs of digital growth and non-spot revenue. But as social media and digital audio sources proliferate, terrestrial radio will fall by the wayside unless broadcasters truly address the major issues staring them in the face. Long spot clusters and other negative on-air clutter continue to drive younger listeners on a search for something better. Further, as those in the money demo age and a younger generation not weaned on radio continue their march to “audio consumption dominance,” the radio industry is indeed facing the crossroads. Radio needs to wake up pronto.

The industry knows that playing in the digital space is not a defensive strategy but where people expect to find information, entertainment and social engagement.  Radio is still searching for the secret to being successful at it. Emmis CEO Jeff Smulyan exclaimed at a recent digital radio industry meeting, ”I’m still trying to figure out how to make money with my digital assets.”

We want radio to succeed. To grow and flourish.  We’ve enjoyed great relationships with radio stations because we try to provide for clients the type of content that makes people want to listen and listen longer:  new ideas, better prizes, new opportunities for personality / listener engagement, content.  Our campaigns provide radio stations with compelling programming – good for both the station and the brand.

The bigger picture question is what listeners want. Millennials want more music and fewer interruptions. But they also want fun, interesting content and a connection.  Everyone knows what they don’t want: those 10- or 12-unit stop sets. Engaging the listener with out-of-stop-set programming, fun contesting and desirable prizes, content that makes people pay attention and personalities who connect with them is what makes radio stand out. It’s always enlightening to hear a new advertiser say, “I didn’t know you could do that.”

Today more than ever, doing things differently and breaking from some traditional marketing staples will make a big difference in listeners’ perception. The latest industry numbers don’t lie, and how many wake-up calls do we need? The virtues of out-of-stop-set tactics: We believe making the client / product / service stand out is what successful radio marketing is all about, thus creating greater time spent listening.

Ron Pell, a veteran of the radio business, is Director of Media Relations for CRN International.

Pandora or dinner?

Is it me, or has anyone else noticed that new smart phone pricing policies could alter the listening landscape and force marketers to rethink how to reach their targets?

I recently contacted my cell phone provider to question an unusual charge on my bill. It seems I went over my data plan limit. Limit?  I thought it was unlimited. I quickly learned that when my contract renewed, unlimited was no longer part of the plan. Ah, the fine print.

Adding up the ramifications, I spent the next 24 hours monitoring exactly how much data I was using. I listened to Pandora during my daily 80-minute roundtrip commute, watched a couple of YouTube videos imbedded in e-mails, downloaded a few apps, and did some miscellaneous stuff I do every day while out of the office and home. I was spending money without realizing it. It was insidious, and the next thing I knew, another twenty bucks appeared on my cell phone bill. Cha-ching!

Knowing that my unlimited data plan was no longer limitless, I immediately started tightening my usage budget. That got me thinking how other users might change habits as well and gravitate to lower-cost (free) listening options instead of those that suck up megabytes and dollars. And that got me thinking how marketers might be the next in line to change their spending habits if audiences tune in elsewhere.

Lately, we’ve been hearing lots of talk about the connected dashboard coming to a car near you. Eventually, we’ll have a major fuel leak, but with data and dollars, because it will be so easy to check e-mail, send text messages, listen to streaming audio or video, and get hooked on anything that’s possible on a smart phone or tablet. But, we’ll be in the car, where we won’t have Wifi to cover us all the time.

It could be a rude awakening when that first bill arrives under the new limited data plans. Many consumers will have to question the importance of personal listening preferences when there is a hefty cost factor that didn’t previously exist. Imagine it: What will it be tonight, Pandora or dinner?

 Maybe that sounds extreme, but it’s highly likely that if listening patterns change, so might the advertising dollars associated with them. There’s always the chance that many will pay the premium to keep doing what they want, but not all.

Do I see dark clouds on the horizon? Not yet. But you can bet people will be a lot more judicious and the number and length of sessions will decrease for Pandora, Spotify, broadcast streaming, and other “data eaters.” As marketers, it might mean that you’re not getting the message exposure you think you are. It may result in people spending even more time with broadcast radio, particularly if more tuner chips are activated beyond just the phones we have today.

I took a personal poll of four Millennials, all working and paying their own way. On the issue, they all said they would watch their bills. Two said they would not change their data use unless it got a lot more expensive, and the other two said they wouldn’t pay more, even if it meant they had to change their habits. Hardly scientific, I know. Only time will reveal the true impact on media consumption. But I can tell you this—it really caught my attention. It affected my behavior, and you can bet it will affect others as well.