11/19/13: Online/digital will power ad-revenue growth

Brad Hill
November 19, 2013 - 12:00pm

BIA/Kelsey today released its Annual U.S. Local Media Forecast for the next four years, with data covering 2012-2017. In it, two pillars of local-media revenue growth are identified: digital, and mobile. Traditional revenue (such as over-the-air and print) are forecast to remain essentially flat.

The report’s top-line forecast is bullish. Local media revenue growth is predicted to pace at a compound annual growth rate (CAGR) of 2.8 percent. That forecast maps dollars to grow from $132.9-billion to $151.5-billion after four years. The growth is driven by an optimistic online/digital forecast, which sees that revenue segment growing at a CAGR clip of 13.8 percent. Traditional ad revenues will experience fractional growth during the period, with an annual growth rate of one-tenth of a percent.

At a quick glance, the report might seem uninspiring for radio, whose participation on the digital side rises from 0.4 percent to 0.5 percent. But Mark Fratrik, Chief Economist at BIA/Kelsey, refutes that as a gloss: “It’s a half percent of the total advertising marketplace. The total marketplace [will experience] about a $19B increase. Radio will have a higher percentage of a larger pie.”

Doing the arithmetic, a slightly larger portion of a much bigger pie translates to substantial dollars. Radio’s ownership of the 2013 digital pie is worth approximately $532-million, and radio’s slightly increased share of the larger 2017 pie will be worth about $758-million. That dollar growth over the four-year period is 42 percent.

Talking to RAIN this morning, Fratrik emphasized the lumpiness of a radio industry which unevenly pursues digital-revenue opportunities.

“Some radio companies are much more aggressive than others at generating digital, online revenues. The increase of digital share is good news, [and] there are some broadcasters who are doing better than that. Any radio station has the potential to do better [than the forecast numbers]. Radio has assets that many other media companies covet. The local content, the local sales staff, and relationships with local advertisers.”

Brad Hill
November 19, 2013 - 12:00pm

This article by guest contributor Jennifer Lane was first published in Audio4cast

With more than 200 million registered users, Pandora’s collection of user data is substantial. Now they are beginning to use that data to create marketable audience segments that advertisers can use to target their campaigns.

The first of these “proprietary audience segments” created by Pandora are Hispanic and Spanish speaking users of the service. To create these segments, Pandora cross referenced their registered users with zip codes that have a high population of Hispanic and Spanish speaking listeners, using publicly available census data. It’s still inference based targeting, meaning that the buyer has to agree to make assumptions about the consumer based on where they live, but it’s an improvement over cookie-based technology, which makes inference based assumptions as well – usually assuming that someone visiting a certain site matches a certain set of established criteria.

Critics will argue that users often give false registration data as well, and that is certainly a factor, but probably not a significant deterrent for buyers who are looking for any improved ways of reaching more of the people they want to reach, fewer of those they don’t.

Studies have shown that listeners are quite tolerant of targeted ads online, especially when they are targeted to offer products that the listener might find useful.

In fact, Pandora’s capable of slicing up their audience by market, zip code, age or gender, or the kind of music they listen to, and has been doing that for a long time. These new customer segments are available in media buying software that makes it very simple for agencies to identify, price and purchase. It’s a smart way to market their large audience to advertisers and showcase their targeting capabilities. This video features Heidi Browning, Pandora SVP of strategic solutions, discussing the streaming service’s targeting capabilities. 

Brad Hill
November 19, 2013 - 12:00pm

Today’s POTD spotlights pureplay aggregator LoudCity (www.loudcity.com), which, like larger players RadioTuna and Live365, enables and hosts personal Internet radio stations. LoudCity does an outstanding job creating a feeling of community and curation. Many LoudCity stations distribute their brands on separate websites. But the LoudCity experience is satisfying in its own right.

A genre directory helps you get your bearings. One of the platform’s best features is the Artists Playing Right Now module, which serves up thumbnails of musicians and bands. Click on any one to flip onto that station’s page and join the stream. Each station has. Facebook commenting embedded.

Although not a unique feature, we find the “right now” concept, as opposed to the artist/song search engine found at RadioTuna, to be fun and effective as both a music-discovery and station-discovery device.

There’s no pop-up player that we could find (our preference), but the embedded player at the top of the page worked flawlessly in our testing across all stations we sampled. So, if you’re willing to devote a full browser tab to pureplay listening, you’re in good hands here.

Bonus: Each station page lists the previous ten tracks programmed. That list provides a quick indicator of whether you’ll like the station going forward.

REMEMBER: Pureplay Buffet archives our Pureplay of the Day selections. It’s a listening feast!