A Few Things We Discovered This Year

As we head into a weekend filled with college and NFL football and get ready to ring in the New Year, here are several insights we discovered in 2018.

Smart Speakers are taking away occasions from Smart Phones. Especially among those who are trying to cut back on screen time. Meanwhile Voice Command is shaping up to be a zero sum game. Unlike screen displays, the algorithm for voice only returns a single result. More here.

Technology and AI aren’t going to kill off the workforce. “Once, the whole of humanity were farmers, now only 3% of the population work the good Earth.” AI will automate boring work and free people up for better jobs that haven’t been created yet. More here.

Negative, repetitive thoughts are a fact of life. Most people have 50,000 negative thoughts per day. Radio provides an oasis from all that noise and negativity. More here.

Winning the streaming battle is proving to be a hollow victory. As revenues have grown for streaming audio platforms, so have the losses. More here.

There’s a tremendous appetite for AM/FM Radio to tell its story with strength and confidence. Whether it’s Westwood One’s Everyone’s Listening blog, Bob McCurdy’s column or Radio Rally Point, there are powerful stories being told. Radio’s glass isn’t half empty or half full, it’s overflowing with 9 out of 10 minutes of audio going to AM/FM. More here.

Look forward to another year of learning and discovery in 2019.

On behalf of Catherine Jung, Doug Smith and everyone at DMR/Interactive, thanks for reading and working to drive radio forward.

– Andrew Curran, President and COO

Retail Fights Back: Lessons for Radio from Brick and Mortar

Despite the massive growth of online shopping, brick and mortar still drives 90% of sales.

That’s right, e-commerce will be just 10% of all U.S. retail in 2018.

That 10% however, represents over $500 billion in sales, so retailers have adopted a radical new strategy to drive in-store foot traffic: “be less annoying.”

After being slow to respond to the convenience of online shopping, retailers from Walmart to Macy’s to Target are not just increasing their e-commerce efforts, but are doubling down on their core business.

With an early Thanksgiving this year, retailers are looking to maximize the 32 days between Thanksgiving and Christmas, which also includes a rare 5th weekend. This combination along with a strong economy should allow Nov and Dec retail sales to hit $1 TRILLION for the first time.

When it comes to making sure the item is in-stock before leaving your house, much of the guesswork is gone at big box retailers.

Local store inventory is available online along with the location of the product mapped in the store.

Perhaps more significant are “skip the line technologies” where employees at Target, Walmart, Macy’s and other retailers can “help shoppers pay and check out from anywhere in the store.”

In terms of giving people a reason to visit and generating buzz, pop-up shops and local artists making Instagram worthy designs that people will want to photograph and share are elements that can’t be replicated in an online shopping cart.

Other approaches such as in-store exclusives, dedicated events, maximizing the use of available floor space to include waiting areas with comfortable chairs and televisions are all strategies that retailers are bringing to life as they seek to surprise and delight their best customers while “maintaining a laser focus” on their core.

OPPORTUNITY FOR RADIO TO SHINE

As retailers continue to reinvent the in-store experience, the combination of radio’s employed audience with money to spend and the ability to have air-talent describe first hand how the revamped shopping experience is something that listeners don’t want to miss, creates a tremendous opportunity with an important advertising segment.

In addition to the unrivaled reach that radio delivers these national brands, the audio dominance of AM/FM radio compared to streaming and podcasting remains undeniable.

The opportunity to “be less annoying” is something that also applies to AM/FM radio. While many people focus on high spot loads, when it comes to user experience, a strong case can also be made for improvement in other areas.

On-air promotional inventory is regularly utilized to highlight smart speaker skills as a way to interact with the station, even though the actual skill being promoted doesn’t work as described or take you to the station stream.

Radio’s ability to get listeners to hear a message and take action is essential to our business model. Anything that risks undermining our credibility, especially in an emerging area as important as voice, should be carefully examined.

There’s a great opportunity to re-imagine station remotes, starting with the name. Instead of having a couple of hung over interns sitting under a tent, spinning the prize wheel, radio could borrow the retail concept of a pop-up location and breathe new life to station appearances, especially in Hot ZIPs.

Request lines and questions on social media that go unanswered are all begging for radio to follow retail’s lead and “be less annoying.”

As Rolling Stone recently reported, album sales (across download, CD and vinyl) are in a tailspin that only appears to be accelerating. Presumably, this will continue to drive streaming royalties and limit the ability of pure-plays to turn a profit.

In the midst of cord cutting, misdeeds by social media platforms and brand safety concerns, AM/FM radio has the opportunity to grow revenue and demonstrate leadership as audio’s biggest and most profitable platform.

As you look ahead to 2019, there’s a great opportunity to revisit your approach to the fundamentals and maintain a laser focus on those employed listeners who matter most to your ratings and revenue.

On behalf of Catherine Jung, Doug Smith and everyone here at DMR/Interactive, thanks for your work to drive radio forward and Happy Holidays.

Andrew Curran, President and COO

Lessons from the Dugout: Something to Chew On

Before pitching the game of his life to clinch the World Series for the Red Sox, David Price had to win the first post season start of his career, which came against the Astros in the ALCS. Following that game, Price saved a unique souvenir, “I got the bag of sunflower seeds I was eating in the ninth inning.”

Sunflower seeds have become the modern version of chewing tobacco in dugouts. In fact, on their way to winning the record setting 18 inning marathon, the Dodgers made a shrine of paper cups and bananas with sunflower seeds poured on, “as an offering to the baseball gods.”

However, success in baseball along with Nielsen ratings isn’t based on superstitions or gimmicks. Sunflowers offer a couple of meaningful takeaways, which radio can benefit from.

Sunflowers start the day facing east and as the sun progresses across the sky, the face of the flower follows along, resetting itself each night back to the east.

In a similar way, winning stations follow their core, employed listeners and map the customer journey, understanding the unique opportunities that exist throughout the day, whether it’s winning a tune-in or other types of brand engagement.

Heavy listening P1s tune-in on average 31 times per week, not to a single station, but to radio overall. How many you win depends on your strategy both on-air and off.

Considerable time and effort is spent on the on-air product, minimizing tune-out and growing TSL. Rightfully so.

It’s equally important to generate top of mind awareness off-air, when your core listeners are away from the radio. After all, listeners can’t tune-out if they never tune-in.

With repeat and varied touch points, focused on the life of the listener, you can drive in-car and at work tune-ins, while also keeping your station top of mind during the other parts of their day when they are away from the radio. This approach maximizes brand loyalty and mindshare, so you win their next listening occasion.

Mapping the customer journey for advertisers is also critically important, especially as it relates to radio’s unrivaled ability to deliver targeted messages to employed consumers with money to spend.

However, the real magic of sunflowers is found below the surface in their root system.

Each sunflower has a deep and extensive root system that goes well below the surface.

In a similar way, winning stations match a strong signal with a deep and extensive set of roots in the community.

Being entrenched in your local market is a key point of differentiation for stations that win the ratings and revenue battle.

The ability to have roots not only in your current HOT Zips, but also in neighborhoods where measurement will occur down the road, helps set winning brands apart.

For more information on mapping the customer journey of your employed listeners and building deep roots with those who matter most, contact win@dmrinteractive.com.

On behalf of Catherine Jung, Doug Smith and everyone here at DMR/Interactive, thanks for your work to drive radio forward.

Andrew Curran, President and COO

HOW TO MAKE MONEY WITH AMAZON: START SELLING THEIR INVENTORY

In March of 2017, we highlighted that Amazon was “fast becoming an ad platform.”

Just a year and a half later, the tech and retail giant rebranded their advertising business into the intuitively named, Amazon Advertising. The initiative reflects the platform’s rapid growth and maturation from being lumped into the company’s “Other revenue” category last year to being on pace to generate over $8 billion this year.

As radio ambitiously rolls out skills to drive at-home tune-ins, Amazon prepares to launch voice assisted ads on Alexa.

Like Facebook before it, Amazon would likely have hockey stick revenue growth with or without millions of dollars in free promotional inventory from radio encouraging listeners to check out the platform.

However, there appears to be a disconnect between the valuable on-air inventory being given to promote smart speakers and a clear monetization strategy for radio.

In the meantime, Amazon’s advertising strategy continues to accelerate.

Within radio, there’s near universal agreement that spot loads are too high.

Yet we run promotional inventory that highlights another rapidly emerging advertising platform that by 2020 will likely be larger than the entire radio industry, while we struggle to promote our core on-air product that drives over 90% of AM/FM’s revenue.

Adding insult to injury, we’re not reaching digital natives with a smart speaker, streaming message. Instead, we are taking that message directly to our employed, core listeners who seek us out and continue to listen on actual radios, essentially undermining our own self interest.

Perhaps this valuable on-air inventory could be repurposed to reinforce and promote on-air listening, while mixing in an occasional smart speaker promo, using a ratio that reflects the amount of listening that we would reasonably expect the devices to contribute 12 months from now.

Meanwhile, spending time off-air, crafting a compelling value proposition for your employed listeners, which will keep your station top of mind on voice activated devices and in the car along with a corresponding monetization strategy is certainly time well spent.

Worth noting, even a voice activated world without presets is very much a moving target. Take for example the MIT Media Lab, which is already developing technology that can generate search commands based only on what you’re saying to yourself. As Popular Science describes it, “It’s like having Siri listen to your internal commands.”

Until then, we are playing checkers, while Jeff Bezos plays chess.

As evidenced by his recent interview in Forbes, “Friends congratulate me after a quarterly-earnings announcement and say, ‘Good job, great quarter,’ and I’ll say, ‘Thank you, but that quarter was baked three years ago.’ I’m working on a quarter that’ll happen in 2021 right now.”

On behalf of Catherine Jung, Doug Smith and everyone at DMR/Interactive, thanks for reading and working to drive radio forward.

– Andrew Curran, President and COO

Open Letter to Radio 2018: We’re Making the Turn with Abundant Wind at Our Back

An Open Letter to the U.S. Radio Industry,

The last 12 months have seen a variety of significant milestones involving AM/FM Radio.

Some of the most notable events include:

– iHeart is in the process of massively cutting its debt as it navigates bankruptcy.

– Entercom closed on its acquisition of CBS Radio.

– Cumulus emerged from bankruptcy.

– Nielsen has included radio data in advertiser planning tools including Local Media Impact, a cross-platform resource.

– P&G, the world’s largest advertiser, rediscovered the power of radio to sell its premium consumer products to our employed listeners.

The magnitude of these changes, both individually and collectively, is difficult to fully quantify at the moment, but the significance will be felt for years to come.

Each one serves to enhance the vibrancy and strength of AM/FM radio, the 800# gorilla of audio.

Meanwhile on the digital audio side:

– Amazon eliminated its investment in original podcasting on the Audible platform.

– Pandora, once believed to be a “radio killer,” has seen Spotify overtake its lead for Average Active Sessions.

In fact, “winning” the streaming battle is proving to be a hollow victory. As revenues have grown for both platforms, so have the losses, while spot revenue for AM/FM continues to put billions to the bottom line nationwide.

Spotify has lost nearly $2 billion and Pandora has lost more than $1 billion in recent years. For its part, when talking about Apple Music, CEO Tim Cook says, “we’re not in it for the money.”

In a recent Fast Company article, Cook continues, “Music inspires, it motivates. It’s also the thing at night that helps quiet me. I think it’s better than any medicine.”

With a perspective like that, it’s not much of a surprise that Apple has long been critical of platforms using algorithms to select the music. As their CEO says, “We worry about the humanity being drained out of music, about it becoming a bits-and-bytes kind of world instead of the art and craft.”

The “art and craft” of song selection sounds very much like a tip of the hat to radio programmers, from the head of the first U.S. based trillion dollar company nonetheless.

As we embark upon another Labor Day weekend (the unofficial holiday for radio’s core, employed listeners), there’s ample reason for those working in and around radio to appreciate the current wind at our backs.

Let’s use this momentum to enhance our core business model and push even harder to drive overall growth for our industry to $20 billion by 2022 (#20×22) as we continue to serve our local communities (links refer back to the previous Open Letters to Radio).

On behalf of Catherine Jung, Doug Smith and everyone here at DMR/Interactive, thanks for working to drive radio forward.

Happy Labor Day,

Andrew Curran
President and COO
DMR/Interactive

Radio’s Resilience: It’s Not Just In Your Head

According to the National Science Foundation, the average person has up to 60,000 thoughts per day. Of those, 80% are negative and 95% are exactly the same repetitive thoughts as the day before.

Self-doubt, critiques, negativity up to 50,000 times per day. Of those, 45,000 will be back again tomorrow.

Research continues to show that social media platforms can increase anxiety/stress/depression and for some, phones are becoming an addiction.

Despite the ubiquity of smartphones, Nielsen’s latest Total Audience Report states, AM/FM radio maintains an advantage of 13.5 to 1 over smartphone streaming in weekly TSL.

Even for true believers, it’s an astonishing level of dominance in 2018.

Enter prior research from Britain’s RAB to shine light on AM/FM’s audio dominance that’s fueled by employed persons. “On average, when consuming radio, happiness & energy scores increase by 100% and 300% compared to when no media is being consumed.”

As Boston College professor, Michael Keith says, “Why else do people listen to music radio, other than to get enjoyment out of it? People don’t listen to radio to be depressed, certainly not when it comes to entertainment radio or music radio. The whole idea of listening to radio is to gain companionship and, at the same time, enjoyment.”

He continues, “Radio is like ice cream, you choose the station that tastes best to you – the flavor you like the best is going to give you enjoyment.”

Anxiety about the impact of traffic delays on your schedule. Anger after being cut off by another driver. Your boss is a jerk. Your co-workers need to pull their weight.

50,000 negative thoughts per day.

In the midst of this tidal wave of negativity, along comes radio. Our heaviest users tune-in 31 times per week as we offer an enjoyable alternative to the thoughts bouncing around their heads.

Yet with smartphone adoption now exceeding 90% among P18-49, it’s important that we explore ways to transcend the transmitter.

As an industry, smart bets are being made about the future distribution and consumption of audio programming, even while a profitable business model and significant consumption remain illusive on streaming and mobile platforms.

Along those lines, best selling author Ben Hardy offers some advice for the road ahead.

It’s Better to Be Prolific than Perfect

“Among the 50 greatest pieces of music ever created, six belong to Mozart, five are Beethoven’s, and three Bach’s. But in order to create those, Mozart wrote over 600 songs, Beethoven 650, and Bach over 1,000.”

HD Radio, Podcasting and Streaming represent some of the high profile innovations championed by broadcasters.

Although none have hit an economic tipping point, it’s important we are prolific in our innovation efforts without sacrificing time and resources for the AM/FM mothership.

Good Timber Does Not Grow with Ease

The largest trees in the world are the Redwoods in California. As the saying goes, “further the sky, the greater the length.”

In order for a redwood sapling to make it, it has to become one of the tallest trees on the planet. No small feat, but it happens again and again.

In a similar way, radio is up for the challenge of strengthening our dominant audio position as the mobile world continues to grow.

The bigger the challenge, the bigger the opportunity to rise up and meet it.

On behalf of Catherine Jung, Doug Smith and everyone here at DMR/Interactive, thanks for your work to drive radio forward.

Andrew Curran, President and COO

AI: Nothing Artificial About Future Job Growth

With AM/FM radio audience driven by employed persons, the opportunity for Artificial Intelligence to create an explosion of jobs is of great interest.

According to futurist Daniel Jeffries, “At our most basic level we’re survival machines. We imagine terrible futures so we can avoid them.”

In fact, there are several noteworthy insights from his column, Why AI Will Bring an Explosion of New Jobs that challenges current headlines, which focus exclusively on the elimination of jobs due to automation.

“For 1.8 million years humans were hunter gathers. Our only real problems were where to find our next meal and how to find shelter from the elements and predators. Everyone had the same job. Find food. Don’t die. But over time we created stronger farming methods, ways to distribute that food, figured out that crop rotation kept the soil fresh, evolved ever more powerful pest controls and solved the problems of famine and food production.”

“Where once the whole of humanity were farmers now only 3% of the population work the good Earth.”

“We automated the jobs of the distant past and moved up the value chain of creation. That’s a good thing and that is what’s happening once more. It’s just a little harder to see because each leap we make takes us to a higher level of complexity and we have to evolve to meet that complexity.”

“There’s a powerful force at work here. It’s a pattern that goes back to the beginning of human history and continues up until this very day. Each time we’ve destroyed all the jobs we’ve progressed to a new stage in our evolution with more wide and varied jobs, ever more specialized. We haven’t created less jobs, we’ve created more jobs.”

“The real promise of AI is automating away boring work and freeing us up for better jobs. And it’s also about doing the work we can’t do that well in the first place. AI will change every aspect of society. There won’t be a single job untouched by it over the next decade.”

“That’s what makes humans special. We always find a way.”

New Collar Jobs

With business leaders from Richard Branson to Bill Gates calling for Robot Taxes to support workers displaced by technology, it can appear that Universal Income can’t be far behind. However, there are increasing calls to pump the brakes on the death of the American worker.

According to an article in Wired, “Imagine where we would be today if policy makers, fearing the unknown, had feverishly taxed personal computer software to protect the typewriter industry.”

The article continues, “Calls to tax AI are even more stunning because they represent a fundamental abandonment of any responsibility to prepare employees to work with AI systems. In many cases, these are “new collar jobs.”

Relevance to Radio

Fundamentally, this is great news for radio. When people get up and go to work, they are heavy users of AM/FM radio. When they leave the workforce, they become heavy viewers of television.

In the near term, Fast Company believes that in less than a decade, half of U.S. workers will be freelance and cities are woefully behind in making themselves relevant to this workforce of tomorrow.

With more than 80% of AM/FM listening being done by employed persons and 75% of listening taking place out of home, the emergence of smart speakers, which are adept at on-demand, personalized consumption, won’t magically return radio listening to the kitchen.

However, the real opportunity with these devices and their associated skills might instead be to reach people working from home and generate new listening occasions from heavy users.

In addition, creating habitual usage of voice command prompts, which will be increasingly important during driverless commutes, would be another smart investment that pays dividends down the road.

In the meantime, this dual smart speaker approach compliments your existing strategy of driving ratings and revenue with over the air listening by employed persons.

Further, if your city doesn’t already have a strategy to attract and recruit talent, including a strong start-up ecosystem, it’s in the direct interest of your station to get involved in conversations around future workforce development and job creation. After all, not much radio is consumed by people out of work.

On behalf of Catherine Jung, Doug Smith and everyone here at DMR/Interactive, thanks for working to drive radio forward.

Andrew Curran, President and COO