In the overall advertising mix, digital will grow to make up one third of media spend in the next 5 years, according to Ducey. Within the audio ads, digital will take a 21 percent share in the next four years. That leaves less than 80 percent of audio ad dollars for “traditional” or broadcast radio. “This will be a blessing and a challenge to broadcast radio,” said Ducey.

Much of this opportunity in digital will lie in interactive forms of audio ads. The connected car is one area Ducey cites, due to a need for hands free interaction. Xapp Media, for example, pioneers an format that prompts users to engage through voice commands (see our previous video demo). The ads will appear within the growing inventory sources of streaming apps that serve audio ads in addition to standard display.

Download the report here (free report sponsored by Xapp Media).

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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.

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Unlike other media, radio advertising is quite diverse, generating 10% or more of its advertising from five different verticals. Retail (18%), Financial/Insurance (17%), Restaurants (14.5%), Automotive (14%), and Technology (10%) accounted for almost 3/4 of advertising on radio in 2012.

Diving into the top vertical, Retail, warehouse clubs and supercenters accounted for the largest share of retail advertising, 22.7%, just as it was in other media I’ve discussed, such as newspaper and direct mail.

Three out of eleven subcategories accounted for a combined 67% of the advertising spend in the financial/insurance category: commercial banking, securities brokerage and auto insurance.

Media Ad View Plus breaks the restaurant category into seven subcategories. Three of these subcategories accounted for 83.5% of advertising revenue in this category for radio: full-service restaurants, supermarkets and other grocery stores (not including convenience stores) and quick-service/fast food restaurants.

For automotive, auto dealers and manufacturers accounted for nearly 77% of the category’s advertising spending, much as it did for television and newspaper.

In the Technology category, the wired telecommunications carriers and wireless telecommunications carriers (except satellite) accounted for a combined 72% of the advertising spend in the category.

BIA/Kelsey projects radio advertising revenue to increase at a compound annual growth rate (CAGR) of 2.85% from 2012 through 2017. In 2017, radio advertising is projected to reach nearly $16.9 billion, representing 11.4% of total advertising spend for the year. Retail, financial/insurance, restaurants, automotive and technology are expected to remain the top categories for radio advertising spending in 2017.

More information on Media Ad View Plus is available here.

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Today at BIA/Kelsey’s Leading in Local conference, CBS Radio President and CEO Dan Mason underscored radio’s sustaining power as a megaphone and community connector, while also discussing its role in the fragmented digital audio ecosystem.

CBS has moved aggressively into digital with local sites that aggregate radio and TV content. It fields a national editorial staff, and curates locally-created content from its O&O properties. This follows Mason’s belief that “TV and radio can work well together.” Digital sales are growing toward 10 percent of total revenues, though Mason concedes that it’s an “aggressive goalpost.”

For streaming, Radio.com provides a hub for listeners to “see all of our radio stations” in one place. New digital initiatives include the industry rollout of FM receiver chips in cell phones later this year, improved HD radio experiences and in-dash auto integration. Each represents “another way to access our product.”

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The table below shows the top 10 billing stations throughout the entire U.S.

* Note that there is a pending deal of WTOP (FM) sold by Bonneville to Hubbard Broadcasting

Of the top 10 billing radio stations, five are AM stations, and seven have either a news, talk or sports format. The audiences of such programming are very attractive to national and local advertisers, and thus, these stations can generate substantial revenues.

Most of these stations have long histories of generating substantial revenues as nine of the 10 were in the top 10 for 2009. The only new station breaking the top 10 was WFAN (AM), which was right out of the top 10 at 12 for 2009 and has been in the top 10 in previous years. WGN (AM), the News/Talk station in Chicago, slipped out of the top 10 this year to 11, only slightly behind No. 10, KROQ (FM).

The post WTOP (FM) Takes Over the Top Billing Station appeared first on BIA/Kelsey - Local Media Watch.

As Social Local Media — BIA/Kelsey’s newest advisory service — marches toward its Feb. 23 launch and Feb. 24 free webinar, we’re using social media channels to present data to our audience and learn more about your challenges, successes and needs in social strategy.

Now, we thought we’d change it up by breaking out the social local media ecosystem into some key segments and offering some tidbits on the penetration and struggles of each. Hence, “industry flash … by the numbers.”

Broadcast: Radio & TV

– Generally, local radio stations lag well behind TV in their use of social media. Only 27 percent operate a Twitter account, and startlingly, just 1 percent have their own Facebook page (source: RTNDA).

– Local TV has shown a greater propensity to adopt social tools, but the results are uneven. While 77 percent are incorporating Twitter into their newsrooms, only 20 percent are active on Facebook (source: RTNDA).

So, the question for both is: Where are radio and TV stations missing key opportunities to use social media to connect with their audiences, market their brands and enrich their content? What are next steps that each can take?

Internet Yellow Pages (IYPs) vs. Online Local Search

A “quick and dirty” content analysis of major domestic directory publishers (AT&T, Dex, Yellowbook, Superpages) uncovered some eyebrow-raising stats and practices:

– On Facebook, IYPs averaged 5,045 fans, or “likes.” Of the more than 20,000 “likes” discovered, more than 56 percent came from SuperPages (11,400+, which has elevated its fan total by more than 9,000 since November. By comparison, Yelp has more than 31,000 “likes” by itself. Of course, sites such as LivingSocial (3+ million active users) elevate “social buzz” to an entirely different level.

– On Twitter, IYPs aren’t nearly as “in the game.” Among the four brands sampled, the average follower count is about 1,500. Again, Superpages dominates, accounting for 71 percent (3,160 of nearly 4,500). Yelp’s Twitter count: 40,000 on the main site, with many of its 100+ city accounts attracting thousands, too. Citysearch also employs this local approach with similar results. Superpages is the only IYP trying this.

What opportunities in social are publishers missing? How can they get more active?

Let us know on our Twitter feed (@BIAKelsey), our Facebook page, or in our LinkedIn Group…or post a comment directly to the blog. You can also E-mail us (webinarsATbia.com). We’ll address your recommendations and questions on the free SLM webinar– Thursday, Feb. 24, at 1 p.m. ET.

The post Social Local Media: Industry Flash … Social ‘by the Numbers’ appeared first on BIA/Kelsey - Local Media Watch.

These are the ingredients behind our new advisory service, “Digital Strategies for Broadcasting.” Technology can drive new workflows, partnerships and revenue streams, and in doing so challenge existing management and operational structures and processes. Running a broadcast company with digital media assets is quite different from running a traditional broadcast property.

BIA itself has taken the “digital plunge” with its acquisition of The Kelsey Group, which extended our expertise, knowledge and relationship base into digital media. With the launch of DSB we are leveraging those resources along with the expertise, data and services BIA has provided the broadcast industry with since 1983.

The explicit goal of DSB is to help our advisory clients develop and execute their digital strategies as successfully as possible. This may mean broadcasters but it can also mean assisting those firms elsewhere in the local media ecosystem looking to understand and work more productively with broadcasters as partners, service providers or vendors.

For more information about Digital Strategies for Broadcasting, click here.

Click to register for our free webinar on Tuesday, March 16, Digital Strategies for Broadcasting: Capitalizing on the Shift to Local and Digital Media.

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