Curbside Retail: What it Means for Impulse Buys and Your Station

Retailers have always differentiated themselves on brand, assortment and price.

For Wal-Mart, Target and others, there’s now a fourth leg to the stool: fulfillment (speed and convenience), which is driving curbside pickup and home delivery.

According to Forbes, “How fast and how easily products can be acquired from a brand are now as important to differentiation as any logo, any price point, or any given product itself.”

This changing consumer behavior creates both opportunities and risk.

Americans spend on average $3,800 per year on impulse buys at the grocery store, driving $485 billion in retail sales. Those dollars are not just meaningful to retailers, but critical to individual brands. Whether it’s a 6 pack of craft beer or a bag of Cool Ranch Doritos, as consumers reduce their in-store occasions, being top of mind becomes increasingly important.

As Comscore President Sarah Hofstetter says, “You don’t even have to walk into a store, which means brands are more important than ever before because if you’re not top of mind, you ain’t getting on that shopping list.”

The Ad Age article continues, “Brands must find ways to stand out now more than ever, experts say. When Walmart, the biggest customer for numerous marketers including Kraft Heinz, is highlighting curbside pickup in its ads, it’s clear that brands can’t rely on tried-and-true methods such as in-store displays.”

Radio’s Version of In-Store Display: The On-Air Promo

With seasonal and year over year changes in AQH and TSL, the ability for stations to rely on on-air promos to drive listening occasions is impacted. Regardless how good your product is, if your station is not top of mind as the listener tunes-in, you’re not going to win the occasion.

One important way for retail and brands to stay top of mind is by leveraging insights from the data to truly understand their customers. With online orders, consumers are generating a treasure trove of information into how their family shops and makes purchase decisions, including items that are abandoned in their digital carts.

This level of data analytics also allows for consumers to be segmented, messaged and engaged accordingly. For example, with data from grocery store shopper cards, consumers are sent coupons for complimentary and competing items, personalized just for them.

In addition, retailers and brands are able to see how various consumer segments and demographics behave and prioritize their efforts accordingly. Despite curbside pickup and online retail generating headlines and robust growth, 90% of retail is still brick and mortar.

It’s the same with audio. Streaming and podcasting are generating a lot of buzz, but 90% of consumption and profitability is over-the-air AM/FM.

For radio, our employed, heavy listeners tune-in an average of 31 times per week. Winning more of these occasions from heavy deeps and heavy shallows is the difference between winning and losing. It starts with having a clear brand position and being top of mind before the listener gives a voice command to their smart speaker, gets into their car or arrives at work.

Kraft, Tide and other brand advertisers have started pulling back on hyper-targeted digital ads, which has benefited radio revenue in recent quarters.

In a similar way, despite ongoing concerns about Nielsen sample size, the fact remains that new households are coming into the PPM panel every day and new people are filling out diaries each week.

That reality along with the 6-10% monthly churn in meter carriers, means that a hyper focus on the top 25 listeners in the CPR report is too limiting. It requires you to always be reacting and trying to catch up vs. already having relationships in place with the employed heavy listeners who matter most.

By cultivating a listener database, it allows you to maximize your current ratings and stay ahead of the curve as new Hot ZIPs emerge. The result: you consistently win more of those 31 occasions per week.

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

Radio Listening Increases with Higher Employment, Education and Income according to research

For many, their perception of radio doesn’t match reality, especially as it’s illustrated in this powerful chart from Deloitte regarding employment, education and income.

As the director of research for the technology, media, and telecommunications (TMT) industry with Deloitte, Duncan Stewart has a very interesting perspective on the global media landscape.

His perspective on the Revenue, Reach and Resilience of Radio in 2019 should be required reading for everyone in radio and strategically shared with our advertisers.

What’s driving the misconception about radio? According to Mr. Stewart, “there is a narrative that new media kills old media, so nobody bothers to look at evidence that doesn’t fit the narrative.”

As part of the ongoing series Radio Rally Point, Andrew Curran with DMR/Interactive had a chance recently to catch up with Mr. Stewart.

Deloitte’s Technology, Media, and Telecommunications is a global practice that has been publishing its annual Predictions report since 2001. For 2019, the report features important insights on rapid growth industries such as machine learning, 5G as well as insight on the impact of legalized sports gambling on TV consumption. Throughout this project, what did you discover (or perhaps rediscover) about radio?

Stewart: Our annual Predictions report covers 10-12 different topics every year. As I was working on the topic list for 2019, I noticed that we had not written about radio since 2009! After 10 years, and an industry that is going to be over $40 billion in size, the topic seemed well overdue. The deeper I dug into radio numbers, and as I analyzed the results of the exclusive survey Deloitte conducted, the more I realized that radio was being unjustifiably overlooked. It deserved its own Prediction, and the story was much better than most media analysts seemed to believe.

In the article, you state that “American 18–34-year-olds will likely spend more time listening to radio than watching traditional TV by 2025!” That’s a bold prediction that demonstrates both the challenges facing TV as well as the power of radio. Yet, some might believe the decline of radio has already happened. From your perspective, what creates the perception that “nobody listens to radio anymore?”

Stewart: That prediction actually isn’t very bold at all. If you look at the Nielsen numbers for radio and TV daily listening/viewing for that age group, it is really obvious the lines are going to cross at some point in the next decade. Based on data from November (when the Prediction was going through final edits) that looked to happen by 2025, but based on more recent data, it could be even sooner. Sometimes making Predictions is hard, but this was just simple extrapolation: A chimp with a ruler and a steady hand could have done it!

Plus, I cheated and looked outside North America. I found a trove of radio data for the Nordic countries, and discovered that radio listening minutes for younger demographics was already higher than linear TV viewing minutes in Sweden and Finland, and was going to crossover in Denmark in 2019. The media market in the Nordics and North America are hardly identical, but there are some similarities.

Why do people think that nobody listens to radio anymore? Because they don’t look at the numbers. The data is clear, publicly available and easy to interpret. But it doesn’t fit the narrative that new media kills old media, so nobody bothers to look at the evidence.

In addition to employment driving overall listening, your research reveals that with higher education and income levels, the more likely someone is to listen to the radio. Education, employment and income sound like the audience equivalent of an advertising holy grail. Are these fundamentals driving the resilience of radio?

Stewart: They don’t hurt! Add in the fact that radio weekly reach for young people is now better than TV, and you have four strong demographic reasons for advertisers to think about radio. But as always, I want to put that into context. Radio is not “better than” TV or digital … it is different, and is yet another possible channel to think about. Our argument is not that radio should take over, merely that it should not be ignored.

You prescribe “an aggressive campaign of mythbusting– always backed up by hard evidence — will likely need to be a key strategy for broadcasters and their industry associations worldwide.” Can you share more on the necessity of this prescription?

Stewart: I think the biggest trend in media over the next few years is going to be a shift towards “evidence-based advertising.” This is just like evidence-based medicine: Who cares what everybody is doing in terms of treating knee injuries? Let’s look at the data and see what actually works. As part of that, media analysts and ad buyers are going to need more data on radio, TV, print, OOH and digital. All using truly comparable metrics. I have seen some excellent work from Ebiquity on radio, and I wrote the Prediction in hopes of striking a roughly similar tone and robust use of data.

That said, both Ebiquity and I have a problem. When we are at a conference (this is a real story!), and we come on stage to talk about radio … half the room leaves for a smoke or to get a coffee, and the other half pick up their phones and check their e-mails. We can’t pretend: In the media landscape of 2019, radio just isn’t seen as sexy.

And some of that is partially justified. Global radio revenues (ads, subscriptions and government grants) will be about $40B in 2019, which is about the same size as the video game and movie industries – pretty good! But globally, the magazine industry is twice the size of radio in terms of dollars, newspaper revenues are nearly four times bigger (yes, still), and TV is 10X radio at over $400 billion annually. Size matters…

You mentioned the move to evidence-based advertising. Can you share some additional context in that regard?

Stewart: Looking at the history of advertising over the last 50-75 years, you can see a pendulum as it relates to spending by industry. In the early years of TV (1950s), there was an under-investment in the new platform compared to more established media. By the 1980s, audience fragmentation was happening and ad execs believed an over-investment was taking place in TV as the pendulum started swinging the other way and a pullback happened.

Fast forward to today and advertisers are already starting to realign their investment in digital. This should be a great opportunity for radio and other traditional platforms as decisions become more evidence based. The digital companies flooded the market with audience data, which helped show advertisers what’s possible. Now radio and other mediums are stepping up their game and have an opportunity to tell a very compelling story.

The speed of the pendulum, not just with advertising, but with technology overall continues to accelerate. How much faster can it move?

Stewart: It sure feels that way, from roughly 2000-2013 innovation and disruption occurred at a frantic pace. However, as you can see in this chart, consumer spending on hardware (smartphones, computers, TV and everything else too) peaked in 2013 and has been on a slow but steady decline. Obviously, smart speaker sales have picked up, which is great news for radio, but overall, it’s a $7 billion category in a $890 billion consumer spending universe.

When people aren’t spending their discretionary income on buying new hardware, it leaves room in the budget for subscriptions. Netflix, Amazon Prime, Sirius XM, etc. In fact, we’re not in an era of cord cutting as much as an era of cord stacking. We predict that by the end of this year the average U.S. household will have five different digital subscriptions.

Innovation and disruption are nothing new, but the rate of change in hardware and devices has slowed for now, which creates a great opportunity for radio to leverage its audience data and tell its story.

That’s a great perspective that steps back and provides helpful context to the current media and technology landscape. Keeping in mind this big picture, if you were delivering a keynote to a conference of North American radio broadcasters, what takeaway would you emphasize?

Stewart: Radio’s not dead, it’s not dying, it doesn’t even have the sniffles. The industry is growing globally, is surprisingly popular with Millennials, and most people don’t know that! You know how radio is great for finding that new band before most of your friends know about it?

I picture Millennial ad execs in 2039 sitting around, still eating avocado toast, and bragging to their peers: “I liked radio before it was popular.”

Deloitte’s analysis on AM/FM radio in the report, Technology, Media and Telecommunications Predictions 2019 can be found here along with the complete version.

– Andrew Curran, President and COO

Radio in an On-Demand World: When Everybody Zigs, Zag

Conversations about radio’s evolving role in an on-demand world are inescapable.

Yet, despite a variety of efforts for more than a decade, consumers continue to resist listening to significant amounts of linear programming on smart devices.

Meanwhile, downward pressure on spot revenue, continues to increase.

In the midst of this, the words of Henry Ford come to mind, “the airplane takes off against the wind, not with it.”

Whether we’re talking about audience size, consumption dominance, profitability or other key metrics, the numbers are overwhelmingly in favor of radio.

Much can also be said about the incredible demographics working in radio’s favor, which advertisers tend to overlook in favor of placing ad buys on platforms with click farms and bot traffic.

Meanwhile, our value proposition with advertisers has never been so compelling, our audience is built on three things: education, employment and income.

The higher your education level, the more you work and the higher income you have, the more you listen to radio.

These insights reflect research from Deloitte, which Tim Moore from Audience Development Group highlighted last week in his Midweek Motivator column. It tees up a very compelling elevator speech: the more education, employment, and income a person has, the more radio they listen to.

This article Radio: Revenue, reach and resilience should be required reading for everyone working in radio as well as our advertisers.

In addition, as the world grows more fragmented and individualistic, radio’s ability to deliver a shared experience becomes even more important and enduring.

If you have teenagers using social media, you’ve likely heard about the growing amounts of research that connect usage with depression.

In social media, posts are almost always about self-promotion and curating the perfect life. Meeting a celebrity, taking an amazing vacation, front row seats. The list goes on.

In reality though, there’s a very real cost.

According to research in Psychological Science, unusual experiences alienate us from our peers. “Extraordinary experiences are both different from and better than the experiences that most other people have,” the authors note, “and being both alien and enviable is an unlikely recipe for popularity.”

Turns out, we think that seeing or doing amazing things will make us feel better than people who haven’t; it actually makes us feel worse. It creates isolation and loneliness.

The article continues, “We don’t realize the extent to which we are influenced by people around us.”

These insights about the importance of shared experiences and being part of a peer group, are at the heart of our audience amplification strategy, which leverages Super-Fans of your brand to reach even more of your best listeners.

By empowering your P1s to Surprise and Delight their family, friends and co-workers, while tuning in and enjoying “can’t miss moments” on-air, it taps right into the power of shared experience, which is fundamental to radio’s ongoing competitive advantage in an on-demand world.

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

Multi-Tasking Through a Crisis: Valentine’s Day 2019

If you’re looking for the next crisis, you’ve come to the right place. Candy conversation hearts, the iconic Valentine’s Day candy, won’t be on store shelves this year.

Necco (New England Confectionery Company), the parent company of Sweethearts, ceased operations back in July.

Now Americans are faced with the terrifying prospect of having to use their own words to express their love.

For any station that wants to save their listeners from this nightmare, the candy is being sold online, but due to anticipated demand, rationing has already begun.

Fortunately, plans are already in place to resume making the candy hearts next year. In the meantime, Krispy Kreme is stepping up to help fill the void.

With people wearing multiple hats and often finding that there aren’t enough hours in the day, how do we navigate the crisis of the moment and infinite distractions without sacrificing what’s truly important, but often not urgent?

Multi-Tasking Redefined

For many, multi-tasking is a necessary evil. Sitting through a meeting, means falling behind on email, so you pick up the phone and take a quick look.

Turns out, not all multi-tasking is created equally. According to Harvard Business Review,  there are “two types of multitasking — concurrent multitasking, in which you do two or more activities at the same time (talking on the phone while driving) and serial multitasking, in which you switch rapidly between tasks (preparing your next meeting and answering an email, being interrupted by a colleague, checking Twitter).”

Turns out, serial multitasking boils down to rapidly switching between activities. However, when we’re trying to do more than walk and chew gum or talking on the phone while driving, “there is a stop/start process that goes on in the brain. That start/stop/start process is rough on us: rather than saving time, it costs time (even very small micro seconds), it’s less efficient, we make more mistakes, and over time it can be energy sapping.”

All is not lost. According to an article in Fast Company, “While true multitasking–doing two or more things simultaneously–is rarely effective, sensible toggling among activities can be fruitful. ”

In fact, according to MIT research, “people who juggle between two and four projects at a time tend to be more productive than those who focus exclusively on one. This way, you can continue making progress in one area when you’ve temporarily run out of steam in another.”To help determine, whether or not multi-tasking is appropriate, Fast Company put together this matrix.

Whether the next crisis is real or imagined, the communities we serve turn to radio for context and information, so these skills are essential.

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

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