This is the first post in our new series, Vantage Points. On a semi-weekly basis, it will tap the perspectives of various lookout points from around the local media and tech sectors. Though the format, frequency and distribution will develop, please contact mbolandATbiakelsey if you have insights to share. The views expressed within do not necessarily reflect those of BIA/Kelsey.

In Broadcast Media, Legacy Doesn’t Have to Carry a Curse

By Maribeth Papuga

“We didn’t reinvent the circus: we packaged it in a much more modern way, but basically we took an art form which is known,with a lot of dust on it, where people had basically forgot that it could be something else than what they knew about, and we basically organized for ourselves a creative platform.” — Cirque de Soleil founder Guy Laliberté, 2011

Challenged by an industry that is rewriting the rules while the ecosystem expands, local legacy media must repackage itself in a more modern way. Like other industries, traditional processes and procedures prevail for lack of any viable and collective alternative. Local market broadcast stations have the further burden of regulatory and content restrictions that create complacency and aversion to alter predictable models.

These stations have faced fiscal and competitive entertainment challenges for decades with focused response on improving structural attractiveness through mergers and acquisitions; but long term growth models are dependent on a structure and culture of vertical integrations, hierarchical decision making and risk aversion. Real and substantial opportunities will not prevail unless broader entrepreneurial thought leadership, an open and inclusive business environment and a willingness to shift direction is adopted by all.

Rather than react to headlines or seek answers in a homogenized national marketplace, local broadcasters should concentrate on disrupters in their own markets and their impact on local consumers. These startups create new products and services by thinking unconventionally and expanding their ability to solve problems. With better access to locally sourced data, economic development and demographic shifts taking place in local markets it is unfathomable that the solutions would not come from these centers versus a national aggregator. And yet, this is precisely a direction that many leaders are headed by following nationally driven initiatives.

Its time legacy media concentrate on challenging traditional models, expanding collaborative partnerships and using academia as a key lever for innovation and talent.

Take the Lead

Today’s media environment is flush with new products that elicit both consumer and marketing adoption in lieu of legacy options. This reality has forced traditional owners to find ways to mimic these new offerings with incomparable options by adopting tactics related to impressions and programmatic selling; without fully understanding that the underlying framework will not only make this a difficult comparison but take them further away from the core value they offer their audiences, advertisers and investors.

Think Horizontally

The economics of managing change in today’s divergent marketplace will not enable any one company or channel to create an all-inclusive model. By adopting the practices set forth by local mayors and business development teams through collective problem solving among civic, private, academic and philanthropic resources; broadcasters can build bridges to connect multiple parties to identify shared resources that collectively address their unique market circumstances and promote broader solutions. Underlying these new initiatives is a framework for prosperity that is collaborative, entrepreneurial and network based to drive future focused initiatives Through a more collaborative market structure, legacy media owners can better avail themselves to both nurture and develop a stronger playbook for the future.

Back to School

The role of universities has been significant in feeding broadcast owners talent needs for decades. As technology evolves, the journalism and engineering students are migrating toward new options that appeal to their future forward goals. Much of this interest is born through on campus experience as universities promote inclusive entrepreneurial thought leadership across departments and majors. Legacy vendors should look to universities as the resource lever to help develop and launch innovative solutions against market objectives for more future forward growth targets. Tapping universities in a more disciplined way can foster faster development of new models and solutions to audience measurement, content relevance, device affinity and the interactive value in the local market.

Redefine the Market

A new media ecosystem fueled by entrepreneurial values, new tactics and rules has forced legacy media to become more defensive by following incomparable trends. While entrepreneurial ecosystems take time to develop, that is no reason to retain vertical industry decision making weighted toward an aggregated solution. People live in local markets and legacy media leaders still service these individuals in their own backyard. By following a simple truth that enables the market and its audiences to be the leading source for innovative solutions, the sum of these individual efforts will open up far more possibilities for future growth. If not, legacy leaders could risk further redundancy among consumers, advertisers and investors.

Maribeth Papuga is a 25+ year advertising veteran with specialization in local market media planning and buying. The majority was spent leading the local practice at MediaVest and predecessor DMB&B.

The post Vantage Points: "Legacy" Shouldn't be a Bad Word appeared first on BIA/Kelsey - Local Media Watch.

This is the first post in our new series, Vantage Points. On a semi-weekly basis, it will tap the perspectives of various lookout points from around the local media and tech sectors. Though the format, frequency and distribution will develop, please contact mbolandATbiakelsey if you have insights to share. The views expressed within do not necessarily reflect those of BIA/Kelsey.

In Broadcast Media, Legacy Doesn’t Have to Carry a Curse

By Maribeth Papuga

“We didn’t reinvent the circus: we packaged it in a much more modern way, but basically we took an art form which is known,with a lot of dust on it, where people had basically forgot that it could be something else than what they knew about, and we basically organized for ourselves a creative platform.” — Cirque de Soleil founder Guy Laliberté, 2011

Challenged by an industry that is rewriting the rules while the ecosystem expands, local legacy media must repackage itself in a more modern way. Like other industries, traditional processes and procedures prevail for lack of any viable and collective alternative. Local market broadcast stations have the further burden of regulatory and content restrictions that create complacency and aversion to alter predictable models.

These stations have faced fiscal and competitive entertainment challenges for decades with focused response on improving structural attractiveness through mergers and acquisitions; but long term growth models are dependent on a structure and culture of vertical integrations, hierarchical decision making and risk aversion. Real and substantial opportunities will not prevail unless broader entrepreneurial thought leadership, an open and inclusive business environment and a willingness to shift direction is adopted by all.

Rather than react to headlines or seek answers in a homogenized national marketplace, local broadcasters should concentrate on disrupters in their own markets and their impact on local consumers. These startups create new products and services by thinking unconventionally and expanding their ability to solve problems. With better access to locally sourced data, economic development and demographic shifts taking place in local markets it is unfathomable that the solutions would not come from these centers versus a national aggregator. And yet, this is precisely a direction that many leaders are headed by following nationally driven initiatives.

Its time legacy media concentrate on challenging traditional models, expanding collaborative partnerships and using academia as a key lever for innovation and talent.

Take the Lead

Today’s media environment is flush with new products that elicit both consumer and marketing adoption in lieu of legacy options. This reality has forced traditional owners to find ways to mimic these new offerings with incomparable options by adopting tactics related to impressions and programmatic selling; without fully understanding that the underlying framework will not only make this a difficult comparison but take them further away from the core value they offer their audiences, advertisers and investors.

Think Horizontally

The economics of managing change in today’s divergent marketplace will not enable any one company or channel to create an all-inclusive model. By adopting the practices set forth by local mayors and business development teams through collective problem solving among civic, private, academic and philanthropic resources; broadcasters can build bridges to connect multiple parties to identify shared resources that collectively address their unique market circumstances and promote broader solutions. Underlying these new initiatives is a framework for prosperity that is collaborative, entrepreneurial and network based to drive future focused initiatives Through a more collaborative market structure, legacy media owners can better avail themselves to both nurture and develop a stronger playbook for the future.

Back to School

The role of universities has been significant in feeding broadcast owners talent needs for decades. As technology evolves, the journalism and engineering students are migrating toward new options that appeal to their future forward goals. Much of this interest is born through on campus experience as universities promote inclusive entrepreneurial thought leadership across departments and majors. Legacy vendors should look to universities as the resource lever to help develop and launch innovative solutions against market objectives for more future forward growth targets. Tapping universities in a more disciplined way can foster faster development of new models and solutions to audience measurement, content relevance, device affinity and the interactive value in the local market.

Redefine the Market

A new media ecosystem fueled by entrepreneurial values, new tactics and rules has forced legacy media to become more defensive by following incomparable trends. While entrepreneurial ecosystems take time to develop, that is no reason to retain vertical industry decision making weighted toward an aggregated solution. People live in local markets and legacy media leaders still service these individuals in their own backyard. By following a simple truth that enables the market and its audiences to be the leading source for innovative solutions, the sum of these individual efforts will open up far more possibilities for future growth. If not, legacy leaders could risk further redundancy among consumers, advertisers and investors.

Maribeth Papuga is a 25+ year advertising veteran with specialization in local market media planning and buying. The majority was spent leading the local practice at MediaVest and predecessor DMB&B.

The post Vantage Points: “Legacy” Shouldn’t be a Bad Word appeared first on BIA/Kelsey - Local Media Watch.

The digital audio space is really just beginning to hit its pace and so this is a perfect time for the Interactive Advertising Bureau (IAB) to come out with its authoritative A Digital Audio Buyer’s Guide developed by IAB’s Digital Audio Committee (on which BIA/Kelsey serves).

The digital audio market felt a seismic rattle with the news yesterday of Spotify’s expected $400 million capital raise which would bring its valuation to $8.4 billion more than twice that of leading competitor, Pandora, who closed out yesterday with a $3.55 billion market cap.

As BIA/Kelsey noted in a digital audio report we released last year (sponsored by XAPPmedia), “The Internet radio revolution has been brewing for some time. Streaming audio has gone mainstream for audiences and advertisers. This revolution is foundational, meaning that new business models are forming around new audience behaviors supported by technology advances.”

IAB’s Digital Audio Buyer’s Guide is a comprehensive but very digestible 26 page educational and reference document that lays out in a clear fashion everything from “what is meant by ‘digital audio'” to sizing the digital audio market, providing best practices and digital audio ad samples to providing insights around planning and buying.

“Digital audio” is defined as comprising broadcast AM/FM stations online, pureplay online radio stations, streamed audio content with selections influenced by consumer input, and audio-on-demand (i.e., podcasts). With over 50% of the U.S. population as current monthly users of various digital audio services, IAB cites eMarketer data showing this will grow to over 190 monthly digital radio listeners by 2019.

In BIA/Kelsey’s updated forecast for broadcast radio, we’re estimating that the advertising revenue from AM/FM stations streaming online will double from $1 billion in 2014 to $2 billion by 2019. That’s a significant growth component for an industry that otherwise won’t see much revenue growth. And we see a lot of new competition both for listeners and in selling access to local audiences.

In the pureplay digital audio world, Pandora will be releasing its latest earnings report on April 23, 2015. We’ll see then how it stacks up in its drive to increase local ad revenues and how Spotify’s raise may impact its share price. Since Pandora beefed up its local sales force presence, it managed to grow its local ad revenues by 155% to over $150 million in 2014.

It appears that the local digital audio market is no longer so sleepy as it may have appeared as social, mobile and video digital advertising claimed all the headlines.

The post IAB's New (Free) Digital Audio Buyer's Guide – Informs a Breakout Category appeared first on BIA/Kelsey - Local Media Watch.

The digital audio space is really just beginning to hit its pace and so this is a perfect time for the Interactive Advertising Bureau (IAB) to come out with its authoritative A Digital Audio Buyer’s Guide developed by IAB’s Digital Audio Committee (on which BIA/Kelsey serves).

The digital audio market felt a seismic rattle with the news yesterday of Spotify’s expected $400 million capital raise which would bring its valuation to $8.4 billion more than twice that of leading competitor, Pandora, who closed out yesterday with a $3.55 billion market cap.

As BIA/Kelsey noted in a digital audio report we released last year (sponsored by XAPPmedia), “The Internet radio revolution has been brewing for some time. Streaming audio has gone mainstream for audiences and advertisers. This revolution is foundational, meaning that new business models are forming around new audience behaviors supported by technology advances.”

IAB’s Digital Audio Buyer’s Guide is a comprehensive but very digestible 26 page educational and reference document that lays out in a clear fashion everything from “what is meant by ‘digital audio'” to sizing the digital audio market, providing best practices and digital audio ad samples to providing insights around planning and buying.

“Digital audio” is defined as comprising broadcast AM/FM stations online, pureplay online radio stations, streamed audio content with selections influenced by consumer input, and audio-on-demand (i.e., podcasts). With over 50% of the U.S. population as current monthly users of various digital audio services, IAB cites eMarketer data showing this will grow to over 190 monthly digital radio listeners by 2019.

In BIA/Kelsey’s updated forecast for broadcast radio, we’re estimating that the advertising revenue from AM/FM stations streaming online will double from $1 billion in 2014 to $2 billion by 2019. That’s a significant growth component for an industry that otherwise won’t see much revenue growth. And we see a lot of new competition both for listeners and in selling access to local audiences.

In the pureplay digital audio world, Pandora will be releasing its latest earnings report on April 23, 2015. We’ll see then how it stacks up in its drive to increase local ad revenues and how Spotify’s raise may impact its share price. Since Pandora beefed up its local sales force presence, it managed to grow its local ad revenues by 155% to over $150 million in 2014.

It appears that the local digital audio market is no longer so sleepy as it may have appeared as social, mobile and video digital advertising claimed all the headlines.

The post IAB’s New (Free) Digital Audio Buyer’s Guide – Informs a Breakout Category appeared first on BIA/Kelsey - Local Media Watch.

Interestingly, traditional local media has a disproportionate share of 2015 spending (87.2 percent). Yet, the online/digital local will grow substantially in the next few years, reaching 20 percent by 2019. This online/digital will be with pure plays, as well as the traditional media that have expanded their services and see the opportunities with this group of advertisers. These health care providers will be extremely interested in greater integration of digital marketing services.

More information on this vertical advertising spending is now available in the recently released report, Insights in Local Advertising – Health Care Vertical, which examines traditional and digital spending trends, profiles the market ad share by media, and details the advertising trends of small and medium-sized businesses (SMBs).

To read the executive summary of this report, just click on “Insights in Local Advertising – Health Care Vertical.“

The post Health Care Vertical – Important to Understand for All Local Media appeared first on BIA/Kelsey - Local Media Watch.

The U.S. Patent and Trademark Office issued a patent to Davenport in October 2013 for a “Wired Internet Network System for the Internet Video Streams of Radio Stations.” Since then, he’s been working with SurferNetwork engaging in testing and concept development while trying to raise industry interest in supporting this idea for how to add new video advertising inventory that is synchronized to the radio station listening experience. As Davenport puts it, “You can double 12 minutes of radio ad inventory into 24 minutes of inventory with ad replacement technology by adding video that is synchronized to the airplay across any Internet connected device.”

One example he pointed out to us when he partnered with C360 Technologies, Inc. and the Pittsburgh Symphony Orchestra to allow radio listeners enjoying a performance to simultaneously view the performance via Internet connections and devices with the added user engagement feature of having 360 degree camera controls to pan around the orchestra. That makes the listening experience more fun and that type of technology can also be applied to commercials and other sponsored content.

We’ve talked about different ways radio broadcasters can leverage their large and often quite loyal audiences over-the-air with synchronized audio technologies such as what Xapp Media is doing. MediaSynced, active in the U.S. and Europe, is another company that offers ways to sync real-time TV and radio with online campaigns. In MediaSynced’s 100 or so campaign deployments with brands like Renault and Sony, the analytics have been encouraging. MediaSync reports CTR increased 113% for Renault with 5.7 million unique impressions and CTR increased 210% for Sony with 3.6 million impressions. Other campaigns showed significantly decreased Costs per Lead, 37% less as compared to a similar RTB programmatic display campaign.

The message Sheridan’s Davenport is trying to bring to the radio industry is an important one and adds generally to the potential digital arsenal radio broadcasters can use to generate significant value by leveraging their valuable over-the-air assets with compelling new Internet technologies tied specifically to that asset.

The post Synchronized Video Advertising . . . on Radio Stations. Wait, What? appeared first on BIA/Kelsey - Local Media Watch.

Clear Channel Entertainment CEO Bob Pittman, speaking today at IAB’s Annual Leadership Meeting in Palm Desert, said that radio has been able to leverage its undiminished strength with digital providing a new channel and new listeners for the medium.

Pittman, a legendary industry figure who was one of the early leaders at MTV and then a leader at Six Flags over America, Century 21, AOL and Time Warner (and a BIA/Kelsey keynoter at ILM 2011), noted that “digital was the obvious way to go” for reinforcing Clear Channel’s value when he took the company’s helm a few years ago. “My entire career since the early 1970s has been about trying to find new ways to connect to the home,” he said. “But now we have reversed it,” with the latest trends — driven by mobile — about doubling or even tripling out-of-home usage.

While digital is a great enabler, it is still not the centerpiece of marketing, Pittman stressed. “You want a product strategy.” With Clear Channel, his team has built out “I Heart Radio” with an annual, in person concert that leverages the company’s relationships with on air talent and musical artists. The concert is now the anchor of the company’s marketing, and has helped raise awareness of the digital channel to 70 percent (along with what Pittman described as millions of dollars worth of on air advertising).

The post IAB Leadership Meeting: Clear Channel CEO Bob Pittman appeared first on BIA/Kelsey - Local Media Watch.

Of the different media used for advertising and promotion that BIA/Kelsey tracks in the LCM survey, only two of the traditional media crack SMB’s top 10 most used media for advertising and promotion: newspapers and direct mail. The rest of the top 10 are filled with digital media.

In the chart below, I looked at eight of the traditional media from LCM. Newspapers and direct mail, the only two of the traditional media to crack the Top 10 most used media list, fall first and second among traditional media. Radio comes in third, with TV and outdoor bringing up the rear for usage.

But how do SMBs perceive the return on their investment for time spent in advertising or promoting themselves on traditional media? The traditional media with the highest usage, newspapers, had the lowest perceived ROI, while the ones with lower usage: TV, cable and outdoor, had the highest ROI among the traditional media.

TV had the highest perceived ROI among the traditional media, with 50% of SMBs rating it as either excellent (10-19 times return on that investment) or extraordinary (over 20 times the return), while only 13.7% of SMBs surveyed reporting using TV to advertise or promote their business.

Newspapers, which had the highest usage among the traditional media, had the lowest perceived ROI, with 26% of SMBs reporting returns as excellent or extraordinary.

Radio had the third highest usage among SMBs for advertising/promotion. But advertisers who used radio as part of their advertising mix reported being pleased with the results, as 36% rated the perceived ROI of radio advertising as either excellent or extraordinary.

For the first time in several survey waves, SMBs indicated that they are actually decreasing the number of media used to advertise or promote their business. The implication: media must deliver concrete ROI or risk losing business traction. Digital media penetration with SMBs has increased, as many of these solutions generate concrete leads and offer trackable ROI metrics.

Traditional media are far from obsolete, however, as the data suggests, and many are still well-regarded. However, for newspapers in particular, and all traditional media, as SMBs enjoy more digital options and demand clear value from their advertising spend, the need to produce clear ROI is stronger than ever.

More information about LCM and custom renderings of the data can be found here.

The post Traditional Media Isn’t Dead Yet, Despite Increased Competition from Digital Media appeared first on BIA/Kelsey - Local Media Watch.

The entrance into a new digital age has brought endless changes to the world. Current media is in a state of transformation, undergoing great modification in its traditional medium form – from print to digital. The century old Radio industry is not excluded from this transition. It is facing ever increasing competition from new and innovative digital media outlets that are available to local advertisers, but within this competition lies opportunity.

Publisher Eric Rhodes, a leading voice for progressive radio, gave his take on “the new digital stuff” and introduces new areas for the radio industry, such as “the connected car” in the first session of Day 3 at Leading in Local conference.

BIA/Kelsey’s advertising revenue forecasts illustrate that national advertisers play a significant role in the purchasing of advertising opportunities across many different local media outlets. In 2012, our estimates are that national brands spent $45.2 billion dollars in local media advertising such as direct mail, television, print yellow pages, radio, out-of-home and more. This amount accounts for more than a third (33.6 percent) of all spending in local media. “The Radio industry is caught between two worlds” said Rhodes. Current radio owners are invested heavily in transmission costs and they see no compelling reason to back out of it now. They have seen little decline on listening time in the last years – only between 1-2 percent. Compounded with the difficulty to monetize digital radio when consumed out of market areas, makes the idea of transition far more difficult. The radio industry is waiting for things to get further developed, but entities such as Clear channel and iHeartRadio are investing heavy and it may be too late for the traditional players in the space to transition. As we know, digital moves fast, so although Radio maybe okay now, it may not be with continuation of newer developing technologies in the digital space.

The “connected car” emerged as one of the most important touch-points on the horizon for radio, given that the car is where audiences continue to report that a good deal of radio listening continues to happen.   Tech savvy consumers are already listening to streamed audio in their cars via blue-tooth through their smart phones, or connecting through plug-ins, and the configuration of the dash board could make a real difference to Radio’s future. People are no longer carrying radios on them. However, Rhodes said “It’ll take 8 years for 50 percent of the U.S. cars to have connected dashboards and 16 years for 100% of them to be connected.”

The question remains: Where and when does the transition need to happen?

The post At Leading in Local: ILM 2013: Radio Living in Two Different Worlds appeared first on BIA/Kelsey - Local Media Watch.

BIA/Kelsey defines that local media marketplace as all local media/services that provide access to local audiences. In other words, it includes all of the media that local radio stations compete against for national and local advertising spending in their markets. The total spending for all of that media for 2013 is estimated at $132.7 billion according to BIA/Kelsey. BIA/Kelsey is forecasting that local radio stations will receive 11.5% of all advertising revenue spent in local markets in 2013, placing it fourth behind direct mail (27.2%), newspapers (16.1%) and television (14.9%).

Advertisers who do use radio as part of their advertising mix are generally quite pleased with the results they get from that advertising. In BIA/Kelsey’s annual Local Commerce Monitor (LCM) survey on advertising and marketing of small and medium businesses (SMBs), we ask several questions on the satisfaction of the various advertising and marketing choices made. For the group of businesses who do advertise on radio, 36% rated the perceived ROI of radio advertising as either excellent (10-19 times return on that investment) or extraordinary (over 20 times the return).

The radio industry is facing ever increasing competition from new and innovative digital media outlets that are available to local and national advertisers. At the same time, listeners have alternate ways to receive their audio entertainment programming, news and information — satellite radio, internet radio sites, iPods and MP3 players to name a few. While the audiences attracted to local radio stations are getting smaller, annual revenues are still increasing, albeit at rates much lower than historical averages.

BIA/Kelsey’s State of the Industry report also looks at which format categories have increased their revenue share over the past 12 years and which have seen declining revenue shares. Spanish language stations have seen the largest jump in revenue share in 2012, more than doubling their 2000 share as the Spanish population has continued to grow and advertisers are seeing the value in reaching this audience. Sports, which appeals to the popular Men 18-34 demographic, saw the next largest increase. Adult Contemporary (AC) stations not only had the highest revenue share in both 2000 and 2012, it saw the third largest increase. So who were the biggest losers among format categories from 2000 to 2012? Easy Listening saw its revenue share plummet from 4.3% in 2000 to 0.2% in 2012, losing more than 95% of its revenue share. Other hard hit format categories were Talk and AOR/Classic Rock.

BIA/Kelsey’s State of the Industry report describes the local radio station industry that finds itself in this incredibly complex and competitive marketplace — audience levels, revenues, technology advancements, new competition.

The post Despite Increased Competition, Local Radio Maintains Competitive Position in Local Ad Market appeared first on BIA/Kelsey - Local Media Watch.