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

IS YOUR AUDIENCE CHEATING ON YOU? THE TINDER EFFECT ON BRAND LOYALTY

Choice is rapidly multiplying, while attention spans get shorter. The result, greater consumer promiscuity.

It’s the Tinder Effect. Something new, fresh and different always just a swipe away.

According to marketing guru, Bonin Bough, “I’m nervous for traditional businesses. Many were so arrogant that they didn’t learn how to capture data about consumers.”

As executives want to put the horse back in the barn on consumer loyalty, Bough says that’s not going to happen. Instead he suggests something much different. Creating an engagement model for promiscuous consumers.

Mastercard’s rock star CMO Raja Rajamannar takes it a step further. Story telling is dead. In its place are “huge opportunities for brands to build more meaningful connections with consumers.”

Along the way, marketing turns into a force multiplier for Raja’s brand and business.

Priceless: Mastercard’s 4 Step Strategy

1. Understanding What Matters Most to Consumers

2. Positioning the Brand so it Aligns with What Consumers Are Passionate About

3. Integrating Every Part of our Business Around Connecting with Consumers

4. Building a Platform that Translates the Brand into Personnel Experiences

Mastercard’s brand positioning has moved from being transactional to experiential. “The best way to pay” has become “connecting people to priceless possibilities.”

According to Rajamannar, “It’s not enough to tell stories about priceless experiences. We need to align the stars for our consumers and help them create their own.”

Translating it to radio, this robust strategy is another indictment of the Contest Pig mentality or the “Find ‘Em, Fool ‘Em, Forget ‘Em” approach to audience development.

According to Psychology Today, the way to improve the fidelity (loyalty) in a relationship “is to build a greater connection.”

Loyalty, especially when people have other options that are just a swipe away, takes ongoing effort. Manipulation, control and negativity don’t get you very far.

Rather, fidelity is “best accomplished by increasing their motivation and desire to stay with you.”

Where to start? The journey of a thousand miles begins with a single step. Get to know your audience by name.

Each day we partner with stations across formats, markets and ownership groups that leverage the ratings and revenue impact of relationship marketing.

By super serving those employed listeners who matter most with Surprise & Delight opportunities, you increase the passion and loyalty of your P1s by strengthening the relationship each one has with your brand and encouraging them to Amplify the message via Word of Mouth Marketing.

Regardless of where you are on the journey, let’s talk about next steps.

Contact Catherine Jung or Doug Smith today.

On behalf of everyone here at DMR/Interactive, thanks for working to drive radio forward.

Andrew Curran, President and COO

Radio’s Glass: Half Empty, Half Full or Overflowing?

For every 10 minutes of audio consumed by Americans today, more than 9 minutes goes to AM/FM radio.

In a fragmented, mobile world, this is the definition of market share dominance.

And the story keeps getting better.

AM/FM radio generates 720 BILLION more minutes of listening per month among P18+ than smart phone streaming audio, including the pure-plays. On an annualized basis, that’s an advantage of 9.3 TRILLION minutes per year (The Nielsen Comparable Metrics Report, Q2 2017).

720,000,000,000 per month/9,300,000,000,000 per year.

All those commas and zeros represent a jaw dropping advantage.

Politicians talk about billions and trillions as if they are interchangeable, so it can be difficult to truly appreciate the magnitude of AM/FM’s dominance.

As a point of reference:
One billion minutes = 1,902 years
720 billion minutes = 1,369,440 years.

One trillion minutes = 1,902,587 years.
9.3 trillion minutes = 17,694,063 years.
(Source: Google)

To put it in the context of dollars and cents, a million dollars is the height of a chair, a billion dollars is the height of the tallest building on Earth and a trillion dollars goes 600 miles into outer space.

In addition, 85% of listening to AM/FM Radio is done by people with a job, which means they have money to spend with our advertisers.

In the words of numbers guru, Good Will Hunting, “How do you like them apples?”

There are a lot of exceptional organizations advocating on radio’s behalf: NAB, RAB, Nielsen, Numeris, Katz Media, NextRadio, Radio Connects, state broadcasting associations, local market consortiums as well as network syndicators and broadcast ownership groups.

Yet, with all those groups telling our story, who’s the most important advocate for AM/FM radio? YOU.

Light a candle, rather than curse the darkness.

Further evidence? Look at the dominance of AM/FM radio in the Infinite Dial 2018 Report from Edison Research.

For many digital companies and platforms, it’s “fake it until you make it.” Not AM/FM radio, we’ve got the data and a passionate community of local listeners on our side. Not to mention profitability.

If there’s something “wrong” with radio, it’s how we see ourselves and allow others to perceive us.

The mobile and digital revolution is 25 years old and AM/FM remains the top reach medium at 93%.

Our audio dominance and employed audience provide an enormous competitive advantage. In fact, as people grow into their careers and make more money along the way, their AM/FM listening continues to increase. Music to the ears of our advertisers.

AM/FM is the 800# gorilla of audio and truly a brilliant, ad supported business model that allows the audience to access their favorite stations and content without a subscription.

Let’s celebrate what’s right with AM/FM radio.

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

Andrew Curran, President and COO

Taking a Bite from Apple: Learning from the Best

“Success leaves clues.” With that adage in mind, I leaned into a recent Fast Company article that proclaimed, “Apple forms the tightest emotional connections with customers of any brand in the world.”

It’s a bold statement, yet it’s readily believable and it stands in sharp contrast to the radio adage, “Find ’em. Fool ’em. Forget ’em.”

That’s bad dating advice, and it’s even worse when it’s a listener strategy and loyal fans are described as contest pigs.

On the other hand, Apple’s approach, “leaves clues” that radio can benefit from observing.

Apple Weaves Its Products Into Lives, Makes Itself Indispensable

According to the research by MBLM and Praxis Research Partners, Apple ranked number 1 in the study for “ritual,” which is the extent a brand is seen as being essential to users’ everyday existence. As one respondent said, “Apple brings me closer to everyone and allows me to be more productive and gets things done faster and easier.”

Insight for AM/FM: The relationship the audience has with their favorite personalities and station represents an invaluable emotional connection that provides listeners with companionship and access to the world during the solitude of drive time.

Being indispensable doesn’t mean you will remain there. What’s your strategy to retain and grow your P1s as you Surprise and Delight those who matter most to your ratings and revenue?

Apple Keeps Steve Jobs Alive

As Fast Company reports, “Apple products feel like they’re driven by a human vision, not by the cold calculations of some big corporation.”

Despite the fact he’s been gone since 2011, Steve Jobs still gives consumers an indelible link with a real, authentic person, and Tim Cook follows in those same footsteps.

“Historically Apple has made users feel that we are different or stood out from the crowd, we’re in it together.”

Insight for AM/FM: A human vision, not a cold calculation by a big corporation. Does technology allow stations to excel at being Live and Local or does automation simply generate more cost saving efficiencies?

This opportunity doesn’t rest exclusively with station employees. When an entire office is playing a contest and helping keep track of the clues and winning names, it feels like “we’re in it together.”

For example, when a national contest gets localized by inviting a winner into the studio to get their fifteen minutes of fame, as WEBN, the iconic rock station did here in Cincinnati last week, the brand comes to life.

Apple Starts With The Customer And Works Backward

People often connect with Apple products because they seem to be built with an understanding of what the user wants (sometimes even before the user does). Key functions are radically simplified on the device and they usually “just work.” “Its products delight, it engages, and it delivers,” the researchers said.

With this in mind, Apple isn’t interested in being first to market.

Microsoft had tablets on the market decades before Apple. Same with Blackberry and smartphones. As Tim Cook said, “It doesn’t bother us that we are second, third, fourth or fifth if we still have the best. We don’t feel embarrassed because it took us longer to get it right.”

Insight for AM/FM: Despite living in a world increasingly dominated by smartphones and digital technology, the audience continues to overwhelmingly seek us out by listening on traditional radios, especially during their commute and at-work.

In fact, while stations want their content to be conveniently accessible across platforms, whether it be on a smartphone or a smartspeaker like Alexa, the reality is that consumption of AM/FM stations on those devices is very limited and will continue to be.

As a result, absent a clear audience-centric strategy, simply streaming your on-air content on more and more platforms, primarily designed for on-demand/personalized consumption, might be counter productive and never add much in-metro listening.

Along the way, the incremental effort takes attention and resources away from on-air content. execution and audience development, which has a clear and proven monetization strategy.

Overall, while Apple creates emotional connections around the globe, AM/FM radio has a similar local relationship with our employed P1s who drive ratings and revenue.

The challenge is to maximize our core AM/FM business model, while thoughtfully and patiently planning for the future.

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

Strengthen and Defend the AM/FM Mothership

Just like your listeners, not all mobile users are created equal.

Mobile expectations are rapidly accelerating, while consumer loyalty and attention waiver. Reports indicate 80% of App users churn every 90 days.

It’s a daunting task to keep filling the funnel at a rate that outpaces attrition, especially when so many users don’t matter to your bottom line.

In a world of fake social media accounts and bot traffic, who are the users that actually matter to achieving your business objectives? How do you most efficiently replenish App downloads with the heavy users who will deliver the highest lifetime value?

90-95% of station revenue comes from on-air revenue. As a result, stations are increasingly using their digital assets to strengthen and defend the AM/FM mothership.

If a user downloads your App, but doesn’t have a job, it will be very difficult for them to consume enough audio to matter to your brand.

According to Matt Lawson, Director of Marketing at Google, don’t base your analytics strategy just on the existing measurement tools that you already have access to. Instead, start with your key outcomes and determine the best way to measure those goals.

Employment is the #1 driver of heavy radio listening. How is this metric being measured among users who are downloading your App and interacting with your online platforms? From a ratings standpoint, Nielsen is measuring employed listening. On the digital side, the measurement tools are the easy part. The bigger challenge is to identify the overall strategy that serves the mothership.

App That’s More Popular than Uber or AirBnB

Hilton Hotels and Resorts has a long history of innovation from offering the first television in rooms to being the first on-site airport hotel.

According to Geraldine Calpin, Hilton’s Chief Marketing Officer, “Having a history of being good at firsts doesn’t keep you there.” The goal is to be “constantly raising the bar, not bumping into it.”

Hilton wants their best customers to have frictionless travel moments. Since we live on our mobile devices, why should the experience at their hotels be any different?

From advance online check-in, where you can select the location of your room to using your phone to unlocking the door without first stopping at the front desk to pickup your key, the app has you covered. Not to mention the lowest rates available anywhere online.

Providing a frictionless travel experience was brought to life with the Stop Clicking Around marketing campaign.

The results include 90+% retention rate for their App (when the average retention is 20%). In addition, the App’s rating went from 1.5 stars to 4.7 stars.

In fact, it’s the No. 1-rated hospitality app in the Apple Store, ranking higher than any competitor, third-party booking site or anyone else in hospitality, including Uber.

The success is not just limited to their app. According to Christopher J. Nassetta, President & Chief Executive Officer of Hilton, during a recent earnings report, “We feel great about our set up for 2018 and our ability to continue delivering record-setting results.”

Infinite Choice is an Illusion

Despite more than 2 million Apps available for download, when it comes to actual usage, infinite choice is an illusion. 90% of sessions involve using three or fewer apps with Facebook, text messaging and Amazon being consistently ranked at the top.

In addition, heavy mobile users – the top 10% overall – tap and swipe their screens a remarkable 5,427 times per day and spend 3.75 hours on their screen.

Despite this significant amount of daily consumption, the average mobile session lasts less than two minutes.

How Does Your Brand Stand Out?

In a hectic, fast paced world, people seek out familiarity and brands they know and trust. Fortunately, not all listeners are created equal so you can be selective about who you recruit and engage.

Although infinite choice remains an illusion, the power of heavy users is real. The top 10% of mobile phone users consume 50% more screen time than average users. In a similar way, your heavy P1s dominate your listening with 2-3% of your cume generating 50% of your total quarter hours.

As a result, there’s a great opportunity to recruit and engage the employed, heavy users who have the most listening to give and will generate the biggest impact on your ratings and revenue.

This mothership strategy encourages investment in new digital and mobile platforms, while recognizing that our core listeners continue to overwhelmingly seek us out on the radio, especially during their commute and at work.

Therefore, while we make our content conveniently accessible across platforms and on our App, the primary role of these digital initiatives is to compliment and enhance our core on-air business.

DMR/Interactive’s 360° Listener Engagement Strategy brings the mothership strategy to life by incorporating station digital initiatives within an overall marketing strategy that generates Top Of Mind Awareness and occasions with those employed, heavy listeners who matter most to your ratings and revenue.

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