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Fred Jacobs is President of Jacobs Media, a media research and consulting firm. Jacobs Media clients have included CBS Radio, Premiere Radio Networks, Citadel, Greater Media, MTV Networks, Playboy, Amazon, Electronic Arts, NPR, Sylvan Learning Centers, and Taubman Malls. Learn more about the company here.
« April 2010 | Main | June 2010 »
It turns out that the in the first quarter of this year, Kantar Media is reporting that U.S. ad spending rose 5%.
Radio grew by more than 7%.
Looks like David Field was right.
We're not dead yet. Enjoy the holiday weekend.
Technology is moving so quickly that sometimes even those of us who use it all the time may not realize just how our rapidly habits are changing.
The topic is about how much you use your cell phone (or better put, your smartphone) for data versus speech. A recent New York Times article took a more anecdotal approach, but the end results suggest that cell phone conversations are taking a back seat to data usage.
In the article, Dan Hesse, Sprint Nextel’s CEO points out that “Originally, talking was the only cellphone application. But now it’s less than half of the traffic on mobile networks.”
And the metrics from the CITA, the wireless industry association, shows that over the last two years, the average number of voice minutes per cellphone user in the U.S. has decreased.
Think about your own mobile device usage, especially if you’re carrying around an iPhone, Android handset, or BlackBerry. The chances are good that you’re spending less time talking and more minutes texting, checking email, surfing the Internet, and other activities.
In our recently released Tech Survey VI, we isolated smartphone owners to analyze how their communications with friends and family members has changed in the past year.
For the population as a whole, texting, email, and social media usage is rapidly rising. But for consumers with smartphones, non-speech communication is skyrocketing.
Note how texting, connecting on sites like Facebook, and even email are increasing exponentially. And how cell phone calling has risen – but not as much. And of course, landline calls are falling rapidly.
We are involved in another ethnographic survey that will be presented this Fall. Like ‘07’s “Bedroom Project,” this one entails spending time with consumers and observing their real life media habits. This new project is centered around smartphone owners. And their reliance on these devices for data is very prominent.
Yes, they all use these devices for speech, but more often than not, they’re texting, checking Facebook or even Foursquare, banking on their phones, and a myriad of other app-based activities.
It makes you wonder if iPhone had never been intiially introduced as a phone that did lots of other stuff. Instead, think about if Apple had launched it as a device that was essentially a small handheld computer, like a Mini Mac. Maybe one of its applications could have eventually featured speech communication, but the device itself would have been marketed as a small personal computer.
In that context, what’s happening with mobile devices now is more logical. Consumers are gravitating toward data at a very high rate. And while speech will not become passé, it will become a second tier activity on these devices, especially as they become sleeker, faster, and more sophisticated.
Yes, smartphones are for talking. But they are for many more uses, too. Kurt Hanson reminds us that these devices are much like the tricorder on Star Trek. I see them as akin to Batman’s utility belt, except they are totally customizable depending on the types of apps you download and how you use the device.
As we await the next generation iPhone, and as Google continues its assault on the industry, the only conclusion you can reach is that smartphones are getting smarter.
More apps. Less talk.
Last week, Nielsen SoundScan reported the lowest number of album sales in a single week since it started tracking this data back when Nirvana was still roaming the charts. At only 5.3 million total sales, it’s a paltry performance for an industry that is struggling to figure out how to market a product that has been around since the 1900s.
You’d think that by now they’d have figured it out.
Last week’s number one album, My World 2.0 (clever title) by Justin Bieber almost earned the distinction of becoming the poorest selling #1 album in history.
And yet, the metrics suggest that consumers are still buying music. Maybe there’s some confusion about exactly what constitutes a hit in this “Long Tail’ world where music exposure now resembles a weak shotgun tactic rather than developing and executing a plan that strategically introduces the world to new music, artists, and releases.
The satin jackets may be gone, but the mentality that considered them to be good marketing is alive and well.
Our Tech Survey VI indicates that the vast majority of core radio listeners actually purchase music – whether they are the younger more adventurous Alternative lovers or fiftysomething Classic Rockers.
So, purchasing is still in place, and in fact, digital downloads continue to gain in popularity, but our research shows that the CD is still a viable format.
If this is true, then how are consumers being exposed to new music? In this same survey, we asked respondents to name all their sources of music discovery. Now keep in mind that just about everyone who took our survey is a member of a radio station email database club, so there’s an inherent radio skew to our data.
So to compensate for that bias, let’s shave off 10 or even 15 percentage points from FM radio’s big lead. At worst, two-thirds say that FM radio is a source for finding out about new music. Television and movies play a significant role, as do music television channels, iTunes, social media and YouTube.
Much further down the list is this year’s media darling, Pandora, followed more distantly by satellite radio, music news sites, NPR, video games, and Twitter.
And yet, the music industry is burning up a lot of promotional dollars making sure to get a new release in a football game, a TV show, or on a Sirius channel.
At the same time, the big dog in the room – radio – is criticized, maligned, and demonized by musicFIRST. This lack of logic on the part of the music industry reveals a strategic blunder tantamount to how they allowed Steve Jobs to own digital downloads.
These weekly sales numbers suck, but it's a good bet they have less to do with the quality of music being released, and much more to do with the music industry’s shameless attack on radio, and its inability to understand basic marketing and targeting.
There are still moments of relative sanity, like Uncle Kracker recently acknowledging the power of Country radio in selling, promoting, and marketing his songs. Crediting Detroit station, WYCD, he noted: "Country radio seems to have a few people left who take chances, and do things the way they want to do them regardless of who's going to yell at them. There still seems to be a general passion for music at the country stations I've visited." And projects like the repackaging of Exile in Main Street speak to how much promotion the labels still get organically from radio, without even trying.
Just imagine if the recording industry woke up from this bizarre slumber, realized who got ‘em to the dance, and started working in constructive partnerships once again, rather than in this kamikaze campaign against radio that is doomed.
Staying current and relevant - values that most radio program directors will tell you are their top priorities in keeping their stations fresh. With declining marketing budgets and staff, it is essential for radio brands to reflect the culture and what's happening in the lives of consumers.
In its own clever way, Google does this like no other. It is interesting that while the basic look and function of their homepage have essentially remained unchanged since the beginning, they never miss an opportunity to reflect the zeitgeist or vibe of the moment.
Last weekend, Google showed off its unique ability to connect with the culture with a special tribute to the 30th anniversary of Pac-Man - a game that most of us have enjoyed at one time or another. In a simple, yet effective way, Google takes a faceless search engine and transforms it into a fun, enjoyable moment for web navigation. It was hard not to smile when I first opened up Google on May 22nd.
Radio used to do this well, and not just for anniversaries of album releases or rock star birthdays. It's not that hard to think about what Greater Media's Julian Breen used to call "The Church of What's Happening Now." Station websites and interstitial production commemorating a local moment or a pop culture phenomenon reminds the audience you are current and engaged - that everyday is not the same day. This is another area where terrestrial radio can outshine most Internet stations - including Pandora - by simply being aware and prepared to seize the moment.
It still happens in radio - just not as often as it should. Too often, we visit homepages of stations in a market where the local team has won a championship, and the website looks the same as it did last week.
An exception that we have mentioned in these posts before is 97Rock in Buffalo. Programmer John Hager provides a great example of seizing the moment by melding a current-less station with the excitement that many share because of a major pop culture milestone.
This past weekend, it was a tribute to the conclusion of Lost, morphed into a "Lost Classics Weekend." Simple, clever, and anyone can do it, right?
Oftentimes, we are asked by managers to explain exactly what programmers do.
This is what they do.
Of course, sex is what powers the Internet, but now new data shows that it is the engine that propels Facebook, too.
Social media researcher, Dan Zarrella, has come with a profiling algorithm to analyze how Facebook users share links. And of course, it’s about sex.
Based on 12,000 posts, articles that contain sexual references are shared more often than the average story. In fact, 90% more often.
So logic dictates that because the majority of your listeners are now on Facebook, personality shows would do well to make sure that some sort of sexual topic or reference is programmed in on a regular basis. I'm not going to contradict tha and given the propensity of consumers to virally connect with sexual surveys, pictures, and related conversations, sex on the web makes good sense.
But great content and branding goes beyond pictures of “hot chicks” on morning show sites. Topics that women can participate in – cheating according to Sheri Lynch of the “Bob & Sheri Show” always works – have that sexual overtone without becoming a Motley Crue video.
And that brings us to a discussion of radio station websites in general. Oftentimes, broadcasters now have aggressive page view goals. And the shortest distance between two points is sex. Thus, sites that are so overloaded with “Babe of the Day” features, videos, and pictures that the true value of the brand is obscured, not to mention consumer needs.
Why are users visiting your site? What are their expectations? What type of experience should listeners have with your website?
In Tech Survey V, we asked that question in the form of ranking desired radio station web features. Now keep in mind that four of every ten respondents are female, but “Babe of the Day” features are well down the list of digital assets they “love to see” on station sites (red underline on the second slide). (Among men, one-fourth “love” this content (26%), compared to just 3% among females.)
Now of course there’s that obvious “gap” between what people say they want – and where they really end up on the web. But when you look at the top seven or eight most desired items, how many radio station websites truly deliver on those music and events desires?
We are fans of web usability studies that analyze how consumers use websites, and the marriage of content and ease of navigation. These research efforts can be done by any company and they are guaranteed to yield a treasure trove of actionable findings. As radio becomes more immersed in digital, these initiatives will become even more important.
There is always going to be that balance between the slam dunk features that will guarantee page views and the content that enhances the customer experience and better connects listeners to your brand.
How's your balance?
It is fascinating to look for ways that stations and personalities use social media to connect and engage listeners. In Tech Survey VI, we asked respondents to rate a list of elements they'd most like to see included in station fan pages. And the pecking order - while not surprising - provides clues about valuable content in the social sector:
Some of the more creative uses for social media are coming directly from personalities themselves. Today's clever candidate comes from DJ Jordin Silver, using Facebook to help fans get her the morning job at 91X. As she points out, if it worked for Betty White, it can work for her.
Let's see how powerful "the community" truly is. Good luck, Jordin.
Whatever your politics, it was easy to recognize that the moment Tina Fey appeared with her devastating performance as Sarah Palin on SNL, you knew she was cooked. The best parodies are the ones that most closely resemble the truth, and Fey's send-up of Palin immediately crystallized opinions about the Vice Presidential candidate. And once anyone gets tagged by SNL, it's hard to overcome it.
Over a decade ago, SNL aired a parody featuring Alec Baldwin as “Pete Schweddy,” who appeared in a spoof of public radio programs called, "The Delicious Dish." The program's hosts were parodied as monotonal, nerdy “granola” people, lacking in both irony and common sense. The massive double entendre foisted upon them, as Baldwin promoted his "Schweddy Balls," was both hilarious and memorable.
On a recent SNL show hosted by Betty White, it happened again, this time with her “muffin” as the double entendre keyword. And the result was the same. A hilarious bit that mocked public radio’s straight-laced style and persona.
<CLICK HERE TO WATCH BETTY WHITE'S SNL MUFFIN SKIT>
As Arbitron’s Pierre Bouvard is fond of saying, “Perceptions are like glaciers – slow to form…and slow to melt.”
As we’ve learned over the years, that’s absolutely the case. So as public radio operators cringe when they see these SNL bits, it raises the question about whether entrenched brands have the capability to turn their image 180° around. And given the success of public radio, does it matter?
When you think of bad images, you think of American cars. Has there been any more negative, in-cement image than the K-Car or the Chevy Vega or the Ford Maverick – and the image of Motor City clunkers? It seems that just about everyone has a story about being burned by an American car.
And yet, the latest Automotive Lease Guide’s consumer attitude study shows that Ford now leads all manufacturers in perceived quality. By the way, Chevrolet is in fifth place.
Now some of this improvement has come at the expense of Toyota, which finished in last place as a result of its recall nightmare.
But as Jim Farley, Ford’s head of marketing, points out, “Perception of brand is just as important, or even more so, than fact. But what I’ve learned over 20 years is, the truth comes out. What we are starting to see this year is about 84% of Ford customers are satisfied with their vehicles.”
True enough, but it starts with perceptions. Perhaps not taking government loans was a positive step for Ford turning around its fortunes. But the quality of the cars is still at the root of customer perception, and that’s where Ford is now winning the war.
For public radio, while perceptions may at times echo these SNL skits, you cannot argue with the positive trajectory of their results, especially when terrestrial radio has taken its knocks. Since Pete Schweddy’s appearance, public radio has enjoyed nothing but success. There are around 32 million weekly listeners to public radio stations’ iconic programs like "Morning Edition," "Wait Wait . . Don't Tell Me," “This American Life," "Fresh Air," and "All Things Considered."
As newspapers are fading and opinionated cable channels proliferate, public radio continues to stand alone as a pillar of truly balanced – and calm - journalistic excellence.
And despite the portrayal on SNL, public radio has led the industry in digital innovation. NPR’s podcasts have long been in iTunes’ leadership positions, NPR Music is a progressive initiative that focuses on music discovery, and their new iPad application is another indication of leading rather than following.
So should public radio be concerned by yet another viral SNL parody? On the one hand, it has become essential listening to many Americans – an independent voice that is dependable, rational, and untainted by corporate control, advertisers, or other outside forces. So, you take a funny SNL bit in stride.
But on the other, public radio has the same pressures as many other traditional media outlets – an aging audience, and an ongoing need to innovate and stay relevant to a rapidly moving fickle audience.
To continue to be essential to an audience that believes in its core values and to quietly counter those SNL perceptions, public radio will need to keep experimenting with digital, while developing new talent and different shows. The success of a news/entertainment program like NPR’s “Wait, Wait” or PRI’s “This American Life” with Ira Glass are indications that public radio has what it takes to stay ahead of the curve.
But the system also is faced with many mature shows and “maturer” hosts. Every franchise needs a viable succession plan, and public radio companies and stations are no exceptions.
The SNL bits are forms of flattery, but they are also humorous shots across the bow. Credible, calm, and rational are all desirable qualities. But so is vibrant, energetic, and engaged. Marrying them is part of a great recipe.
And by the way, the muffin was delicious.
Full disclosure: We have done considerable research and consulting work for NPR, PRI, and public radio stations for more than a decade.
Is it possible to get big and not incur the wrath of consumers, even former fans?
After all of our years working in Alternative radio, this has been a consistent topic in focus and L.A.B. groups. In other genres, consumers often applaud bands when they become famous and play large venues. In Alternative, there has always been a proprietary feeling of discovery attached to bands. If you (and your friends) somehow find them, you want to see them prosper... but too much. If they get too big, they get stigmatized.
An extreme example is Bono. The challenge that has faced U2 for decades has been how to maintain a cutting edge persona, while also dealing with the fame and power that comes with being one of the biggest bands ever. As Bono has personally become a force for world peace, he has also opened himself up to criticism for getting too big, too powerful, and perhaps even veering too far away from his cultural center - music.
That happens to companies and corporations, too. It is fascinating to watch how Apple - the David to Microsoft's Goliath in the computer world - is now facing some of those same "evil empire" perceptions up against the Google Android platform. And it's almost unfathomable to somehow view Google as an underdog.
But in the world of mobile, that's been the case. It is not difficult to find all sorts of blog and online venom aimed at Steve Jobs and Apple because of perceptions that iPhone is too big or that the App Store is too controlling. In mobile, many bloggers and pundits see Google as the more open, developer-friendly platform.
Manipulating image is part of the challenge, as Apple attacks Microsoft, and in turn, Google (Droid) attacks Apple. While these positioning battles are aimed at the other guy's apparent weakness, it is their inherent "bigness" that is at the root of these marketing efforts. PhD dissertations will be written about the juxtaposition of perceptions of leadership, and how each company handles their "bigness."
Right now, Facebook is grappling with the same challenge. As the upstart to MySpace, Facebook had high school and college students at its foundation, and its upward trajectory has been nothing short of stunning. As Facebook has experienced meteoric growth in the past couple of years, the biggest percentage change in growth has come from mature adults.
I knew something was up when my 80 year-old mother "friended" me. I'm sure many of you have encountered that "Facebook moment" when you realized that this phenomenon was verging on being out of control.
There's now a flurry of anti-Facebook sentiment cropping up all over the web, and not just from anonymous disgruntled consumers. Our old friend and two-time Summit speaker, Jason Calacanis, has been especially vocal about Facebook's attitude, especially aimed at founder Mark Zuckerberg:
"The biggest mistake most new players make at poker is overplaying their hand. They spend so much time thinking of the ways they can win that they forget all the ways they can lose. Overplaying hands can affect even the most seasoned players, especially after they've won a couple of hands in a row.
Over the past month, Mark Zuckerberg, the hottest new card player in town, has overplayed his hand. Facebook is officially “out,” as in uncool, amongst partners, parents and pundits all coming to the realization that Zuckerberg and his company are–simply put–not trustworthy."
Now there's a new initiative popping up - "Quit Facebook Day" - scheduled for May 31st. Its organizers are especially up in arms about privacy concerns.
A less radical approach is scheduled one week later where Facebook users are urged to simply boycott the site for the day. This group sees it this way:
"Facebook's real customer is the advertisers that they work with: NOT YOU," Facebook Protest's official statement reads. The soon-to-be protesters also ask participants to:
"commit to not logging in or interacting with Facebook in any way. Be sure to log out of Facebook in all of your browsers no later than the evening of June 5th. On the 6th, be sure to not use Facebook connect or click any "Like" buttons: basically refrain from ALL Facebook related activity."
Has Facebook gone too far? Are their privacy policies out of sync? Is Mark Zuckerberg the power hungry megalomaniac he is portrayed as in a growing number of blogs and articles?
Or is it that Facebook has gotten too big, and is experiencing some of the same growing pains that impacted MySpace, YouTube, Yahoo!, Dell, Palm, and Microsoft?
And is a cultural backlash in store for Facebook that could once again start with young people - the group that made Facebook a success in the first place?
To assume that social media is Facebook is the same faulty conclusion you might have reached if you thought Microsoft was the end-all-be-all for computer platforms, Yahoo! for search, or General Motors for cars. There will be different sites, new portals, and still to be developed ways for communities to form and to engage with one another. We just don't know what they are...yet.
The climb to the top is easy, fun, and exhilarating. Staying there is the tough part.
P.S. Today (5/19) at 1:00 p.m. Eastern Time, I will be participating in a free webinar, presenting the key findings from our sixth annual Technology Survey. It will be a fast-moving hour, including smart phones, Pandora, social media, streaming, and even Howard Stern. It is sponsored by Triton and AllAccess, so join in if you have the time.
You can register at this URL: https://www2.gotomeeting.com/register/820047627
A new survey on consumer attitudes from Econsultancy is no surprise:
Radio ads are hated by lots of people, especially those on the younger side of the spectrum.
It is interesting that ads on YouTube and Hulu take "top honors," and perhaps this can be explained by the fact that most people simply don't want to see any advertising when watching streaming video.
But for radio (and TV) where ads are part of the traditional environment, you have to believe that the 1,400+ respondents in this survey were zeroing in on the quality of advertising.
This has been a problem area for radio for some time now, exacerbated by consolidation and the decline in national advertising. For many radio listeners, a stopset often consists of six or seven :60 second ads, many slapped together locally by the same overworked production director, interspersed with bad, corny, or annoying locally produced commercials.
Of course at the station level, part of the problem is that there simply isn't enough time for one person to service four, five, or more local stations in a cluster with commercial production.
But the other side of the dilemma is the content of radio commercials. For decades, production directors, jocks, and other station employees have been using a playbook devised when John Kennedy was the president. Like fairy tales, these "radio rules" have been passed along through the years, whether they still are relevant or effective - or not.
So here's something to ponder. If the user experience - including the commercials part - could be improved, what impact might that have on the medium's overall acceptance?
And how do you improve that experience? Fewer commercials might be a place to start, and many broadcasters are slowly but surely heading in this direction. Shorter commercial breaks might also be an avenue, and experiments like the "standalone :60" popularized by stations like WRFF/Philadelphia resonate, too.
But the piece that appears to be almost totally ignored revolves around "What makes a good radio advertisement?" That's a question that is never asked inside radio stations, but the challenge of selling and marketing products and businesses without totally offending and repelling consumers is an important goal.
The Econsultancy study asked these same consumers about the reasons why they appreciate ads:
Discounts, free sampling, learning something new, and the fun factor are all elements that people say they value. And yet, they are typically missing from most radio commercials being produced today.
The "fun and entertaining" part is a challenge, and not every commercial can pass that test. But the ability to offer discounts or to learn something new is well within the realm of the possible - if these concepts are communicated to advertisers, sales reps, and production managers alike.
If we aren't researching and understanding how to build better ads, then we're missing a valuable opportunity to create more effective radio, while also making radio less of a "hated" medium for ads - both good goals.
Jerry Lee of B101 in Philly is the only broadcaster I've heard talk about this issue, As advertisers move away from traditional media and test the new digital waters, local radio is going to have to try harder to bring something new to the table. The good news is that most banner advertising and mobile ads (until Steve Jobs launches iAd) are abysmal.
There's still time.
P.S. If anyone wants to send in some examples of recent great radio ads, we'll post the best. That is, if we receive any.
P.P.S. Tomorrow (5/19) at 1:00 p.m. Eastern Time, I will be participating in a free webinar, presenting the key findings from our sixth annual Technology Survey. It will be a fast-moving hour, including smart phones, Pandora, social media, streaming, and even Howard Stern. It is sponsored by Triton and AllAccess, so join in if you have the time.
You can register at this URL: https://www2.gotomeeting.com/register/820047627
Last week, BIA/Kelsey's blog discussed the comeback of radio companies in the all-important revenue department for 2010. While blogger Mark Fratrik noted that these improved numbers were predictable, given the low bar set last year, it is still good news.
Looking forward, Fratrik talked about many of the top broadcasters have also created a "valuable level of efficiency," allowing them to control costs and keep nimble.
But where is future growth going to come from?
Fratrik pointed out, "Where the stronger growth will occur with radio stations is with their digital/online activities. Radio stations are in an advantageous position to take advantage of its local assets – its brand name, its cross-promotion capabilities, its local content, and its local sales and marketing staff – to generate substantial revenues on their digital/online activities. In the next five years we expect an average annual increase of over 16% in these revenues. Where presently these revenues are a small portion of many local radio operations, we see some radio broadcasters earning substantial amounts from these activities in a short time."
The italics are mine. And while it is difficult to disagree with his prediction that the big growth sector for traditional broadcasters should indeed be digital, it is questionable whether radio operators will be able to capture a fair share of that activity.
Why is that? Well, if you think about life before the Internet, radio was struggling to get past the 7% slice of the media pie, despite being a legacy business with strong local brands and big personalities.
In the new digital world, is radio entitled to a larger share of dollars, given the more sophisticated brands and media sources that are already preying on advertisers?
Radio is going to have to earn every digital dollar in a new world with iAd and sophisticated marketing tools. And if that's going to happen, radio is going to need to reach a more enlightened state about what it's going to take to be truly competitive. This has a much higher degree of difficulty than doing battle for ad revenue with newspapers, billboard companies, and the Yellow Pages. Oh, for the good old days.
Back at RAIN in Las Vegas last month, Radio Paradise's Bill Goldsmith referred to broadcast radio streams as "second class citizens." And he's not wrong.
In the cold harsh light of day, how high on the priority list is the digital stream? Who's paying attention to the user's streaming experience, from the overall sound quality to the way that commercial breaks are filled? Do programmers - burdened with long and getting longer checklists of priorities and duties - have the time to focus on streaming issues?
You can answer these questions for yourself. But when you consider how pure play outlets like Pandora only have to focus on their streams - not transmitters or towers - it's a simpler more linear world.
BIA/Kelsey's pronouncement assumes that radio operators are laser-focused on digital research, growth, and development. Those licenses to print money have been revoked.
In order to compete in this new environment and reap the financial benefits, it will require putting digital initiatives front and center.
Not as afterthoughts.
P.S. On Wednesday (5/19) at 1:00 p.m. Eastern Time, I will be participating in a free webinar, presenting the key findings from our sixth annual Technology Survey. It will be a fast-moving hour, including smart phones, Pandora, social media, streaming, and even Howard Stern. It is sponsored by Triton and AllAccess, so join in if you have the time.
You can register at this URL: https://www2.gotomeeting.com/register/820047627
Hey, it's Friday, and it's a beautiful day. Enough hard work and serious thinking for one week.
Let's kick back, whip out our mobile devices, and play a little game.
Talk to you Monday.
P.S. On Wednesday (5/19) at 1:00 p.m. Eastern Time, I will be participating in a free webinar, presenting the key findings from our sixth annual Technology Survey. It will be a fast-moving hour, including smart phones, Pandora, social media, streaming, and even Howard Stern. It is sponsored by Triton and AllAccess, so join in if you have the time.
You can register at this URL: https://www2.gotomeeting.com/register/820047627
Our mobile application division - jacAPPS - was fortunate to be included in a recent article in the New York Times devoted to the exploding world of in-car audio entertainment. Written by John Quain, the piece focused on how the dashboard is becoming the epicenter of automotive attention.
<CLICK HERE TO READ NEW YORK TIMES ARTICLE>
We saw powerful indications of this back in '07 when our "Bedroom Project" identified how the car was rapidly becoming the last bastion of core radio listening among our 17-28 year-old listeners.
Three years later and now every automotive manufacturer - as well as many aftermarket companies - is racing to outfit car interiors with a myriad of compelling entertainment options. For traditional radio broadcasters, the goal to be one of 6, 12, or 18 AM/FM presets has been eclipsed by the rapid increase in digital choices, seemingly growing exponentially.
Even among P1 radio fans, our just released Technology Survey VI shows that in-car iPod access is at an all-time high. Among those who own an iPod (or similar device), six in ten now have the ability to connect it to the cars they drive. This adds considerable pressure for radio stations to deliver a strong product in an environment that is beginning to resemble the cable television landscape.
Quain points to mobile applications as an avenue for local broadcasters to play this game. Citing efforts by Clear Channel with iheartradio, our jacAPPS station-branded apps, and Michigan-based app developer Livio, he sees a path for radio to actually expand its footprint using the car as the launching pad.
As Quain notes, "Ultimately, the incursion of Internet-based music services and radio station streams may be less about annihilating yet another business model than it is about breaking down barriers. For the first time, small local stations will be able to reach an entire driving nation, so some broadcasters may see their audiences swell as more listeners find them on Internet-connected car radios. In the end, it may simply be a case of radio is dead, long live radio."
Does local radio need to continue to invest in strong local content in order to keep pace? Will radio companies have to develop applications that are prominent, clever, content-rich, and viral? Yes, on both counts. But the best news is that as we have been preaching since the App Store opened 22 months ago, Steve Jobs has created the means for traditional radio broadcasters to buy the hottest beachfront property on the World Wide Web.
The market has never been better for radio.
At the recent British Columbia Broadcasters Association conference, Mark Ramsey captured a few snippets of media pundit Bob Garfield's brash explanation for why broadcast media is in trouble (Bob used a more graphic term).
The line that caught my ear:
"You don't know shit about your audience."
While Bob went on to offer something of a prescription for broadcasters, the reality is that on that point, he is correct. I'm not crass or smart enough to tell you what you need to do in order to win in this new environment. But I do know this - most broadcasters simply do not have the necessary information to craft out viable strategies in this crazy environment. And because the competition has now expanded exponentially, knowing what consumers are thinking is the most valuable commodity of them all.
The radio industry spends millions of dollars on ratings to simply tell us who's listening and when. Today's Media Monitors married with PPM data now graphically show us when meters are migrating based presumably on what a station is doing at that precise moment in time. But if most of what you know about your audience is coming only from Arbitron and Nielsen...
You don't know shit about your audience.
That's because ratings merely tell you who and what but never why. The understanding comes from learning the perceptual and behavior reasons why consumers tune in (and out) stations. Is it the brand, does it make them happy or angry, does it make them smarter, or is it just fun?
If you're now hooked on the immediacy and accuracy of streaming data from sources like Google Analytics or Ando Media...
You don't know shit about your audience.
It is not enough to know how Pandora has lapped the field or whether your mobile app has been downloaded more often this month than last. If you don't understand the motivations that are driving these behaviors, you're missing the rationale and emotion behind these usage patterns.
If you're continuing to traipse to Hiltons and Marriotts to play 600 hooks to 90 people in a meeting room, you're testing lots of songs, but...
You don't know shit about your audience.
The challenge goes well beyond what songs they like. We're now dealing in choice, access, variety, and the barriers (commercials, fees, etc.) that consumers must wade through in order to get the music they enjoy. Anybody can learn that "Won't Get Fooled Again" tests while "Slip Kid" doesn't. It's the rest of the information about how music is discovered and consumed - as well as where - that is the Holy Grail.
Much of the perceptual work that stations commission merely scratches the surface of true listener tastes. That's because we continue to ask the same questions:
Which station plays too many bad songs along with the good ones?
Which station is the concert authority?
If WAAA went off the air, which station would be your next choice?
If those are the questions you're continuing to ask in those $30,000 perceptual studies...
You don't know shit about your audience.
Learning about what consumers do when they're not listening to the radio - assuming they still are - is just part of solving the Rubik's Cube that is media behavior. The digital and entertainment worlds have rapidly expanded and in the process, have become more complex. Just as consumers aren't enjoying the same media and gadgets as they did twenty years ago, using the same old research tools can't possibly measure the scope of what they're using now. And instead of asking the questions, we would all do well to listen to consumers tell us their stories about how media and technology are changing in their lives. And how we might be able to still make a difference and provide something additive to the experience.
Learning the motivation behind behavior is key. That's why many of the free, open source studies that are conducted in and around the radio industry are important, especially when they tell us more about why consumers do the things they do. "The Bedroom Project" that we conducted with Arbitron is a great case in point. While three years old, that study clearly showed where the puck was moving, using breakthrough ethnographic research instead of the usual Q&A format.
Similarly, those Arbitron/Edison "Infinite Dial" studies longitudinally tell important stories about trends relating to media, gadgets, and how consumers feel about them. Like our Technology Surveys - now in their sixth consecutive year - they are designed to help broadcasters understand the lay of the new land, going well beyond their favorite morning shows and prizes they want to win. Say what you will about Arbitron - they have funded much of the research that benefits all of us.
It is difficult for programmers and managers fighting the ratings and sales battles on the streets of cities and towns everywhere to be able to think big enough to have this perspective. So it becomes the onus and the responsibility of broadcast companies, the RAB, and the NAB to make these R&D investments that can inform their employees of the mega-trends that are impacting radio and the rest of the media pie.
The pundits, know-it-alls, frustrated cynics, and false prophets don't have any more answers than you do. If you want to learn about your audience, you have to invest in information. And you have to ask the right questions.
It has never been more important that you DO know shit about consumers, whether they're still listening to the radio or not.
While reading the various industry trades and assorted media and digital related emails I receive every day, the contrast between a couple of them hit me right between the eyes.
In a recent Radio-Info column, sales consultant Lindsay Wood Davis called out sales managers for all those "stinking, rotten deals" that have been cut in order to get revenue on the books." And now that the economy and the media advertising space are recovering - in some cases, quickly and impressively - there are the inevitable inventory problems popping up everywhere. He suggests using the RAB, hiring a consultant, and using a good yield management system.
Wood calls this "Scuzball City," and his article is an attempt to get sales management teams thinking strategically, especially as the recovery takes hold.
This is good advice, and understandable given the desperate straits radio was in just a few months ago. But in all fairness to sales managers everywhere, booking any business last year was Priority #1 so a low rate/limited inventory dilemma is not surprising given just how bad the radio business picture has looked.
But contrast radio's sales woes with Apple's new iAd mobile advertising initiative. By placing great value on the mobile opportunity, Steve Jobs is coming at this from a position of strength. On paper, you can discredit the iPhone space for still being relatively small in the big scheme of new media penetration.
But you can't knock Jobs' balls. He's going after the big boys and he's putting a $1 million price tag on campaigns. Jobs is looking for $10 million for a group of launch advertisers. That's a lot of change for mobile ads, but Apple will do the right thing, making commercials look and feel like apps. They aren't going to feel like those cranked out donuts that radio production guys slap together on a Friday afternoon. And there won't be remotes tossed in for "value added."
By starting out strong, loud, and proud, Jobs is sending a message about the value of his real estate - today and in the future.
Jobs isn't selling by the numbers. They're not that great in mobile at this early point, especially at a time when many advertisers certainly aren't spending like the good old days.
This is a concept sell. Apple is all too aware of the CPM commoditization madness that has inflicted old media over the decades. With iPhone, it's not about reach and frequency - it's about cool ads that function like apps. It's about creating a great environment, and sharing the opportunity with advertisers and marketers.
A time of desperation and panic for radio was inevitable, given the way the economy tanked and the way in which radio has traditionally been sold. Reach and frequency and cost per point don't get results. It's about environment, packaging, platforms, and advertising vehicles that consumers notice and talk about.
You'll never find Steve Jobs in Scuzball City.
In focus and L.A.B. groups over the past year, I continue to be impressed by how many radio listeners enjoy participating, rather than be the passive consumers most have been for their entire lives.
Maybe it's the explosion of shows like American Idol, where the whole country can vote for the up and coming stars they love - or hate. Or the way that Major League Baseball continues to tally fan votes for the All Star Game. Or whether the mass adoption of Facebook and other social networks simply provides everyone with a forum for opinion, comments, attitudes, and observations.
As many mourn the death of journalism as we have known it from the traditional Fourth Estate persepctive, the end result is that everyone has become a writer, reporter, observer, pundit, and maven.
So what does this mean for radio, personalities, and teams?
The audience wants to be involved in your life, and revels in having a say over the things you do. This isn't as ominous as it sounds, and in fact, can be engaging and loyalty-inducing.
A recent case in point is Toronto Raptors' star Chris Bosh. Nearing the end of his contract and the dawn of his free agency, Bosh has a big decision to make.
And in social media fashion, he's turned to his friends and followers for advice.
Late last month, his tweet to his more than 100,000 followers (think about that) was:
"Been wanting to ask. Where should I go next season and why?"
Sure, this is a good topic for sports talk radio, but it's an even more interesting discussion on Twitter.
And to clarify the question an hour later, Bosh offered this more succinct tweet, with a nod to Mick Jones:
"OK... Let me rephrase the question. Should I stay or should I go?"
Some of the media observers have interpreted these missives as Bosh needing attention, love, and affection.
I think he's stirring it up, engaging fans, circumventing the media, and creating a great soap opera - all at no cost, thanks to the viral nature of our digital environment.
This isn't hard, but it does require that personalities open themselves up, provide some transparency, and actually be willing to face the good and the bad from their audience. For professionals who enjoy the privacy and physical anonymity offered by a mic and a hunk of glass in a soundproofed room, this is a major leap.
But it is also a way to continue to be a part of a conversation that is rapidly passing them by. Consumers are finding other media personalities outside of radio to worship, while broadcast owners are wondering whether the ratings they generate are worth the salaries they pay.
At a time when broadcast managers now have to grapple with issues like who owns social media assets, personalities and management teams have a great opportunity to work together to rekindle some of the fan flames that have not been especially hot these past few years.
Throughout this past week, I would like to thank regular readers for indulging this series of posts about Pandora. If I didn’t believe that Pandora’s ascension was significant, I would not have devoted as much space and thought to this emerging media phenomenon.
As I have pointed out over the past several days, Pandora demands our thought and attention, just as MTV did in the ‘80s, and satellite radio did in recent years.
Radio does not exist in a vacuum. In simpler times, it really may have been about WLS versus WCFL. Today, broadcasters need to grasp the broader realities of media consumption and consumer needs and wants in an environment of seemingly infinite options.
So let’s look at some of the results from the newest Jacobs Media Technology Survey about Pandora. The study was fielded earlier this year across 78 rock-centric stations, generating more than 26,000 responses. These are hard core radio listeners – the types who actually join email clubs, carry meters, and contribute the lion’s share of listening. And their views are very germane, especially when they point to an emerging threat.
As our survey shows, among those who stream any Internet radio, nearly three in ten spend time listening to Pandora. If you program to fans of Alternative or Triple A stations, that percentage moves even higher.
We then went on to explore how these core terrestrial listeners who tune in Pandora compare the two products. As we’ve discussed over the past several posts, Pandora is being marketed as “radio,” in much the same way that XM pursued terrestrial radio listeners with its “Beyond AM…Beyond FM..XM” campaigns.
So putting Pandora head-to-head with commercial music radio, these core radio station database members’ opinions are clear and important: More than half contend that Pandora is a better option for music than most commercial radio stations:
Now that’s a finding, and it speaks directly to a message we’re getting loud and clear from some of radio’s most loyal listeners.
It is important that terrestrial radio broadcasters understand the changing competitive environment, so in a follow-up question, we asked respondents about the things they don’t like about Pandora. While many are satisfied, the lack of local DJs and hometown programming content are Pandora barriers – and local radio opportunities.
That is, if terrestrial stations are still willing to invest in the proprietary assets that put them on the map in the first place.
This isn’t about attacking Pandora or Tim Westergren. If anything, you have to respect what he and his staff have accomplished in defining a new brand of media entertainment.
It is about understanding the new digital chess board, not creating “Meatball Sundaes,” and crafting plans and strategies that can help broadcasters better compete in the months and years ahead.
There’s a new kid in town, and he’s growing up awfully fast.
No, you didn't read today's post headline incorrectly.
The new buzzword in social media is "like" and it will have major implications on the revenue growth of Facebook over the next several years. For Pandora, it's a new - and explosive -way of growing fans and listeners.
On the web, when someone indicates they "like" something - a song, a comment, a video - it amounts to a personal recommendation or endorsement. And we know the power of word of mouth influence on just about everything. As Tom Asacker told us at a Jacobs Summit several years ago, a recommendation from a trusted friend "trumps" any empirical data you could gather.
Tom told the story of a friend looking for a new car. After conducting exhaustive online research, checking out all the sites from J.D. Power to Edmunds, the big decision was finally made. But at a social function later that day, this same person ran into a friend. After recounting the Internet car quest he had just undertaken, the friend tells him that having once owned that same car, he would never buy one again due to a myriad of operational and reliability problems. So despite those mounds of hard data, a personal recommendation - or lack of one - from a friend holds sway with most people.
This is also why we continue to use the "Net Promoter" scale in every research study Jacobs Media conducts. Sure, it's important to know who's "the concert authority" or which station has "the most entertaining morning show," but the measure of "recommendability" is the holy grail of product marketing and growth.
Nielsen research also underscores the "holy grail" of recommendations from trusted friends. Once someone you know gives a product, movie, or radio station a "thumbs up," it provides greater marketing impact than TV ads, billboards, and bus sides.
Facebook's Mark Zuckerberg knows this to be true, and that's why "The Power of Like" will change the nature of social media. You will see that little "like" icon all over Facebook, urging you to make a value judgment which will then be available to your "friends." Of course, players like Pandora are partnering up with Facebook, so much of the music that you share and recommend to friends will be sourced to them.
And we know that when it comes to music, radio plays an important role - but the endorsement of a song or band from a friend, co-worker, or even a kid can be credible and effective. This year's Jacobs Media's Technology Survey underscores this point. Looking at all the different music discovery sources, you can see the strength and power of a "like" vote from a trusted friend. Now contrast that with Pandora's rank and the reach of Facebook, and you can easily visualize the potential of their social alliance.
This "Open Graph" concept is the beginning of Facebook redefining social media's impact on the search and the Internet. There are privacy questions galore, but the bottom line is that Facebook's big partners - like Pandora - are going to get bigger and more important. If you think Pandora's audience is impressive now - 50 million and growing strong - imagine the organic growth that will take place by tapping into Facebook's crowd - 8 times larger.
Yesterday, radio listeners and sports fans alike lost a true icon. So did we as broadcasters.
Ernie Harwell, the voice of the Detroit Tigers, passed away at the ripe old age of 92. For decades, Ernie was the radio connection to the team, and served as the voice that many of us associate with baseball and growing up, sharing games with dads and other family members, and simply living here in Michigan.
But Ernie's influence was even greater because he was a true gentleman who respected others, big and small, while always finding the good in everyone and everything. As I listened to Ken Calvert and Jamie Samuelsen on WCSX open up their show to fans, players, and friends (something you won't hear on Pandora, by the way), and Drew & Mike play back some great Ernie moments from their incredible archives, I'm reminded about how different broadcasting is today.
In short, Ernie defined civility. At a time when ratings are made by shouting, screaming, and insults, Ernie must have secretly despised "shock jocks" radio, Reality TV, and most talk radio. Yes, these genres entertain - but at a cost. Someone is always the victim, and anger is the fuel that propels these shows. Ernie didn't speak that language.
It all came to a head in late 1990 when the Tigers and WJR made perhaps the dumbest personnel decision in the history of radio when they fired Ernie in an effort to ostensibly go after younger demos. Now I've been a part of some bonehead hiring and firing decisions, too (Phil Hendrie was the first morning guy at KLSX in the late '80s, so there you go), but none was bigger and more outrageous than Ernie being ousted from the Tiger Stadium broadcast booth.
The move inspired public outrage unlike anything I've seen before or since. The entire state of Michigan was incensed, the rest of the media went crazy, and WJR was deluged with calls (and probably death threats).
The only person who displayed not a trace of anger, remorse, or negativity was Ernie. In today's world, a similar situation might inspire lots of tears or bravado or a Facebook fan page protest (think Conan), and other "viral" attempts to persuade management to reverse their decision.
In Harwell's case, he let nature take its course. The "new and improved" play-by-play team didn't have a chance. And a couple of years later, Ernie was back behind the mic where he belonged, and the planets realigned. The Tigers still sucked, but at least Ernie was the voice that ushered in each spring, giving Michiganders a sense of hope and continuity.
At a time when "You lie" is celebrated, when shouting, outrage, exaggeration, and innuendo are encouraged, and you win ratings on "American Idol" by humiliating hard-working amateur contestants, Ernie Harwell stands out even more as a throwback, a gentleman, and as someone who became out of step with how it's done.
Too bad. At a time when being bad, mean, nasty, and bold is celebrated, Ernie always pointed to a better way. We could learn a lot from Ernie Harwell.
We’ve been talking about the impact of Pandora this week, so let’s move right to the data.
First and foremost, Pandora has emerged as the premier Internet radio station, now amassing more than 50,000,000 sign-ups. This is significant because as a media source, Pandora now has critical mass. And its position in Apple products, in cars with Ford SYNC, and through the Facebook network guarantees growth and exposure for the foreseeable future. In many ways, Pandora has redefined the space.
Secondly, it has reached its goal, largely because of mobile. As Tim Westergren stated last year, “Our future is going to be more mobile-centric than I had even thought – and sooner.”
Easy for him to say because Pandora captures 30,000 new sign-ups a day – just from the iPhone platform. And last Christmas Day, Pandora nailed down 200,000 sign-ups – an incredible number. So during a week that most of us simply take off, Pandora celebrated its biggest “new cume” experience.
Here he is again, talking about the power of mobile for Pandora:
"(Mobile applications are) a real driver. Between the iPhone and BlackBerry, we get half our new users from mobile. It's really changed the perception of what Internet radio is. For a long time we were stuck in this bucket of computer radio both in the minds of listeners and advertisers. Now, everyone is beginning to realize that this is really radio. You can take you iPod and plug it into your car or stereo system at home. So there's been this wholesale recognition that this is the future of radio. The places that were once the sole domain of broadcast-the car-are now the highest growth areas for Internet radio."
Pandora is no longer stuck in any bucket. Westergren simply believes in being where people are, and that’s why Pandora has new subscribers coming from a wide range of gadgets, media, and brands.
By mid-year, Kurt Hanson of RAIN/AccuRadio estimates that Pandora will have about a 1-share of all U.S. radio listening by the end of this year. (By his calculations, they’re sitting at a .8 right now.)
That may not sound like a world beater, but when you consider all of the different places in which Pandora can be accessed, that level is sure to rise. And while Pandora will always have a limited spot load and will not approach the terrestrial radio’s advertising numbers, some analysts estimate the Internet station could approach $100 million in revenue this year.
Some believe that while Pandora’s emergence as the premier streaming station may be noteworthy, the size of its audience and revenue base are still paltry in the big picture.
Yet, with 60,000 new sign-ups a day, Pandora is building cume, unlike any radio station any of us have ever seen. When a local station has a cume bump of 60,000 listeners in a PPM book, programmers get ecstatic. Pandora does this every day – and it’s all about their strategic goals.
Pandora has a plan. The average radio station might launch a cume-building promotion now and again, but in Pandora’s world, it is all about new sign-ups, all the time. Stations use contests and giveaways. Pandora does it with music, less clutter, and convenience.
And now, by tapping into the 400,000,000 Facebook users, Pandora’s “cume” is going to get even bigger. That’s tomorrow’s blog post topic.
Interestingly, I have talked with some heavy hitters in radio who still laugh at Pandora – its audience size, its advertising performance, and at Westergren himself.
All this week, we're talking Pandora. So permit me to evoke a different medium - film - for a moment.
Maybe you remember Woody Allen’s Zelig back in the ‘80s. Before there was Photoshop, Woody inserted this character into famous historical scenes. It was a technical triumph, although not one of his better films.
In many ways, that’s how it feels with Pandora’s Tim Westergren. Everywhere you look, there he is.
First and foremost, Steve Jobs is on stage, laying out his new OS4 platform for iPhone at a highly publicized conference last month. And the next thing you know, there’s Tim Westergren, as Apple holds up Pandora as the paragon of music streaming in the mobile space.
Then a couple of weeks later, Westergren and Pandora are a significant part of Facebook founder Mark Zuckerberg’s major presentation at f8 about how his social media monster is going to weave in music preferences and friend recommendations in an innovative way. Once again, Pandora is at the center of a major tech/social announcement.
If you check out Ford SYNC’s demos, what do you see? Yup, Pandora is their shining example of how the SYNC interface makes it easy for drivers to vote on songs while driving the kids to school:
It seems like everywhere you look, there’s Westergren:
OK, I made that last one up.
But Westergren is all about ubiquity – for his brand and his streaming radio product. By making sure that Pandora can be accessed just about everywhere – on mobile devices, in cars, in a wide variety of gadgets, on computers – Westergren is enabling more and more consumers to enjoy offering “thumbs up” or ‘thumbs down” to songs that are produced by his music genome.
And in the process, he’s building strong top-of-mind awareness for Pandora, enabling more sign-ups, more rounds of financing, new interest from advertisers, and more buzz. Pandora is about music passion and word-of-mouth, and Westergren works it like no other. While Sirius and XM depended on gazillions of dollars in TV, print, and other media, Pandora is taking a more viral approach – and mastering it in the process.
Tomorrow, let’s look at Pandora and mobile – the turbocharger behind its surge over the past year.
There’s been a considerable amount of talk in the industry over the past year or two about Pandora and exactly how broadcast radio should think of them.
We’ve devoted several posts to Pandora in this blog, especially after attending a Meet-Up here in the Detroit area late last year. At that time, Pandora founder, Tim Westergren, talked about his plans to change the media world – specifically radio:
"We are very ambitious about what we want to achieve with this company... We are setting our sights on really changing this thing called radio - completely. Our goal is to replace broadcast music radio with something more personalized; something more inclusive than it’s ever been before and to ultimately build a musician’s middle class.”
Well, that got my attention.
We’ve also noted that Westergren has actively lobbied the millions of Pandora members to support the so-called performance tax so that broadcast radio pays its “fair share.”
In this context, Pandora might strike you as a threat if you work in broadcast radio, and recent results from our newest Technology Survey reinforce that notion. Pandora is hot, Pandora is buzzworthy, and to many core radio listeners – the ones who sign up for station databases – Pandora is a superior music product to the FM stations in their markets.
So, over the next few days, we’ll take a look at Pandora – friend or foe – and examine what they’re doing right, what FM radio can do to more effectively compete, whether this is another satellite radio threat that’s a lot of hype, or something altogether different. We’ll also take a look at the numbers from our recently released Technology Survey, so you will have a better sense of what real radio listeners are thinking about Pandora.
As always, the best topics are the ones in which you participate. So as “Pandora Week” rolls out, please feel free to chime in with your comment.
