Pandora's "path to profitability" may be "through car dealerships and mattress shops"

Thursday, April 19, 2012 - 11:00am

To cover its quickly-growing royalty costs, Pandora needs to better monetize its listening audience, especially those listening via mobile devices (for which it's only making two cents an hour; see more on Pandora's finances in RAIN here).

But as it grows (Pandora's share of total U.S. radio listener was 5.79% in March; read more on Pandora's usage growth here), Pandora (and industry analysts) are betting on the more lucrative local advertising market, especially given the added benefits of targeting by age, sex, and ZIP code Pandora is able to offer.

Pandora has run more than 400 local ad campaigns across the country this year. The New York Times spoke with one advertisers, a NJ Honda dealership. "Attracted by Pandora’s ZIP-code targeting, he spent $10,000 to advertise on the service in January," the paper reports. "IPhone traffic to his Web site — which he attributes to the ads — more than quadrupled, (Planet Honda president William) Feinstein said, and so he increased his spending to $15,000, then $20,000." He told the paper, "We don’t need to buy five radio stations. We can buy one."

The Interactive Advertising Bureau (IAB) this week released a study predicting strong growth for mobile, and local, online advertising. Its press release (here) quotes PwC U.S. Partner David Silverman, "By combining some of the best features of the internet, along with portability and location-based technology, mobile advertising is enabling marketers to deliver timely, targeted, relevant, and local advertisements in a manner that was not previously possible. It is for these reasons that we expect strong growth to continue with mobile advertising."

Will this affect local broadcasters? "At the end of the day, the client budget isn’t growing; in some cases it’s shrinking," Dave Marsey, SVP at Digitas, told The Times. "You’re seeing dollars move from out of terrestrial and into more accountable, targetable channels." Broadcasters, however, maintain that Pandora's lack of true local content (news, traffic, weather, community issues) make it something other than "local media."

One aspect in which broadcasters definitively have the upper hand is sales force manpower. CBS Radio sales president Michael Weiss told The Times his company has a sales staff of 1,200. Pandora has fewer than half as many total employees. "The boots on the ground gets you the local advertiser," said Razorfish ad exec Jeff Lanctot.

Read more from The New York Times here.

After a tough 2011, Borrell predicts growth for local radio's online ad revenue

Tuesday, April 3, 2012 - 12:05pm

Borrell Associates says "pureplay" Internet radio generated $206.3 million in streaming audio advertising in 2011, significantly topping broadcasters' $67.4 million. And while Borrell Associates’ new Benchmarking Local Online Media: 2011 Revenue Survey predicts radio will double its streaming audio revenue in 2012, it'll still be only half of what "only-online" radio does.

Borrell says streaming audio ads represented 22% ($67.4 million) of broadcasters’ 2011 online revenue. 

Local stations didn't have a great 2011 online. While the online advertising market grew overall, local radio's share of the pool didn't keep up. While the rest of the online media industry grew 20.6%, says Borrell, radio grew only 6.1%, giving them less than 2% of 2011's $16.4 billion total.

That said, Borrell is looking for radio to turn it around, with a nearly $410 million 2012 in local online ad sales, for a 35% increase over 2011.

(See Borrell's predictions from November here. We also recently reported on BIA/Kelsey's 2011 local online ad revenue recap here.)

Borrell Associates CEO Gordon Borrell will both participate in the "Charting Digital Audio Ad Dollars" panel, and present a "POV" (see story in today's issue) at our upcoming RAIN Summit West in Las Vegas (more here). Read more on the Borrell study here.

CBS launches "Your Day" iPad app to leverage audience gains for combined local media

Thursday, March 22, 2012 - 12:15pm

CBS yesterday announced it's created and launched the new "Your Day" iPad app, which aggregates content from its local radio, television, and online properties. The app adds content from CBS-owned properties like CNet, CBSSports.com, and Chow.com as well.

The "Your Day" app is free and available for 24 of the top U.S. markets.

MediaPost reports, "One of the key strategies has been to consolidate separate Web properties in a given market into one local online hub. In New York, for example, different sites for WCBS-TV (Channel 2), WFAN, 1010 WINS and WCBS 880 were combined into one property -- CBSNewYork.com -- leading to traffic gains beyond the total of the combined audiences for the four properties." CBS is now duplicating that strategy in 25 markets.

ComScore data shows total listening hours for local CBS radio streams are up 20% 2010-2011, and total listening hours per session are up 18% (interestingly, Triton's Webcast Metrics has shown steady decline in Average Active Sessions for CBS from late 2009 through January 2012 -- you can see that here, and our coverage of the latest Webcast Metrics ratings is here).

According to a recent BIA/Kelsey forecast, local online ad revenue across the country will grow from $21.2 billion this year to $38.5 billion by 2016. The growth in the digital segment will offset slower than anticipated growth in total local media advertising revenues, the company says.

Read MediaPost's coverage of the Your Day app here.

Local content hubs earned top rankings in January, according to comScore

Monday, March 12, 2012 - 11:35am

CBS Radio's Philadelphia web portalCBS Radio has found success with its 30 local web portals: comScore ranked them as some of the top local websites online in January. Now the broadcaster plans to take what it's learned and remake its music radio station websites.

CBS began launching local website hubs in 2010, aggregating content from local TV stations, sports radio stations and talk/news stations (RAIN coverage here; see an example portal for Philadelphia here).

"While some radio companies are doubling down on streaming or daily deals, CBS has opted for a more diversified digital business model," writes Inside Radio. "The diversification strategy is paying off."

In January, the network ranked first in Time Spent among regional local media sites, according to comScore. CBS' portals also ranked second in page views, fifth in unique visitosr and visits. "The rankings are especially noteworthy in light of the fact that CBS Local operates in just 30 markets compared to many of its competitors [AOL Patch, MSN Local, Yelp, Yahoo Local and CityGrid], which operate in as many as 150-200 markets," observes Inside Radio.

CBS says unique visitors grew 43% last year ("the fastest growth in our entire peer group," according to CEO Les Moonves). The local hubs are also generating new revenue for CBS, tapping into daily deals, online directories, ecommerce, affinity clubs, performance advertising and other services. "There are real dollars we’re going to start seeing," said Moonves.

CBS Radio's 97.1 new website

Now CBS is "taking a lot of the best practices and strategies we learned... from CBS Local Digital Media and applying them to the music business," according to CBS Local Digital Media president Ezra Kucharz. Specifically, its music radio station websites.

CBS moved its music radio stations to the Local Digital Media division in December, away from CBS Interactive Music Group. Last week CBS began rennovating its music radio station websites -- starting with CHR stations -- looking to add a unified design, social media integration, video, improved advertising and tie-ins with Last.fm, Local Offers and Metro Lyrics.

Inside Radio points to 97.1 KAMP (here and pictured left) as an example of the new website design: archived video interviews, embedded Twitter feeds and easy access to either buy songs recently played on-air or build custom Last.fm stations.

You can subscribe to Inside Radio's daily newsletters here.

Envision launches local high school sports web platform for affiliate stations

Tuesday, January 31, 2012 - 8:00am

Envision Radio Networks' new High School SportsSiteEnvision Radio Networks has launched a web service called High School SportsSite, which provides local high school sports stats to affiliate stations. The site automatically collects high school sports scores used ScoreFeeder.

The goal is reportedly to help Envision affiliates "own high school sports in their market and drive new revenue streams from clients that want to support their community." You can find the site demo here.

Hat tip to Tom Taylor and Radio-Info for reporting the story. You can find more coverage in today's Taylor on Radio-Info newsletter here.

Pandora: AQH rating grew 50-100% in major U.S. markets in 2011, cume up 50-75%

Monday, January 23, 2012 - 11:00am

Pandora's local reach increases

Pandora reached an AQH (Average Quarter Hour) rating of 1.0 or more among adults 18-34 in each top U.S. local radio market during the holiday season in December 2011. That's according to new listener data released by the company as analyzed by Edison Research.

Additionally, the webcaster's weekly cume reached more than 22% in each of the top local radio metro survey areas (again, among 18-34s).
Pandora also released full-year listenership data (as defined as January 6, 2011 to January 4, 2012). This data shows that Pandora's AQH grew 100% in New York over the past year among 18-34 year olds. 
Among both 18-34 year-olds and 18-49 year-olds, Pandora's AQH grew between 50-100% in each top U.S. market over the past year.
Pandora also reports its cume grew about 50-75% in each top U.S. market -- the most growth coming in Dallas/Ft. Worth among 18-34s (75%).
RAIN reported in July that Pandora's 18-34 AQH was then higher than any terrestrial radio station in all of the five largest U.S. radio markets (more here).
You can find Pandora's press release and full listening data here. We have the company's 18-34 AQH ratings chart below.

Pandora AQH ratings (Adults 18-34)
Mon-Sun, 6am-12

City January AQH rating July AQH rating Sept AQH rating Nov AQH rating Holidays AQH rating Full year increase
New York 0.5 0.7 0.7 0.9 1.0 100%
Los Angeles 0.7 0.9 1.0 1.2 1.2 71.4%
Chicago 0.6 0.7 0.8 1.0 1.0 66.6%
San Francisco 0.7 0.9 1.0 1.2 1.2 71.4%
Dallas - Ft. Worth 0.6 0.8 0.9 1.0 1.1 83.3%
Houston 0.6 0.8 0.9 1.0 1.0 66.6%
Atlanta 0.5 0.7 0.8 0.9 1.0 100%
Philadelphia 0.6 0.7 0.8 1.0 1.0 66.6%
Washington D.C. 0.7 0.9 1.0 1.2 1.2 71.4%
Boston 0.6 0.7 0.8 1.0 1.1 83.3%
Portland 0.8 N/A 1.0 1.2 1.2 50%


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