Netflix Has Done to TV; What Pandora Can’t Do to AM/FM Radio

December 26, 2017

Looking to recharge your batteries and hit the ground running in the New Year? Spend a few minutes with this End Result, featuring insights from the Age Marketing Fact Pact 2018.

There has been much fanfare surrounding the Internet overtaking TV as the #1 ad platform in the U.S.

What you may not have heard about is AM/FM Radio surpassing both Magazines and Newspapers, improving its position in the media landscape from fifth to third in ad revenue.


What’s even more remarkable than the Internet’s rise in prominence since 2000 (+31.3%)?

How about TV being up (+1.3%) since Y2K. That’s despite cord cutting and Netflix overtaking Cable TV, something that Pandora has tried, but failed to achieve against AM/FM Radio.


In fact, these issues for TV are being compounded with a massive and sustained ratings decline. Media Analysts MoffettNathanson recently issued a report, Worse Than We Thought. According to coverage from Inside Radio, the Wall Street analysts concluded, “When this year started … we were deeply concerned about C3 ratings. The fact is, ratings declines in 2017 were even worse than we imagined with seven of the past eleven months declining double digits.”

What Do Advertisers Want?

In an column entitled, TV’s Cry for Help, columnist Shelly Palmer shares this insight, “Marketers have never wanted to buy a GRP or a CPM. They want to drive velocity or brand awareness or create purchase intent or some other metric of their own choosing. They’re not governed by how well they buy ads, they’re governed by revenue, and everyone is under extreme pressure to perform.”

AM/FM Radio’s Leading Value Proposition

When we position Radio as providing “Cheaper Reach than TV,” we are selling ourselves massively short. More importantly, a race to the bottom on rate doesn’t help advertisers “drive velocity” and certainly doesn’t help Radio.

What rings the cash register? Reaching those with money to spend. People with a paycheck listen to AM/FM Radio. 

In fact, each month, adults in the U.S. (18+) consume 700 BILLION more minutes of AM/FM Radio than pure-play streams. That’s an advantage of almost 600 BILLION quarter hours per year.

At the same time, while unemployment is less than 5%, that doesn’t mean everyone is working. In fact, according to the Bureau of Labor Statistics, while 150 million American adults work, 100 million are out of the workforce. They are at home watching TV.

The current Golden Age of Audio isn’t being driven by podcasts or streaming, but rather by the sustained strength of AM/FM Radio. In 2018, there’s a great opportunity to increase the share of the overall advertising pie being allocated to AM/FM spot revenue.

Radio’s ability to “drive velocity” for clients is directly related to growing your audience with the right mix of employed, heavy consumers of radio, while keeping these Super-Fans and Amplifiers actively engaged with your brand, so they are consistently thinking of you first and most.

Want more fuel for 2018? Read the Ad Age Marketing Fact Pact 2018.

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

Andrew Curran, President and COO

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The Grocery Cart: Revitalizing Processed Food Brands in Organic World

November 27, 2017

Imagine for a moment, you have an iconic morning show featuring Orville Redenbacher. For decades, a beloved personality who has fallen out of favor with today’s consumer.

Orville
Welcome to the world of the Conagra Brands management team, except it’s not just one iconic brand, but much of their processed food portfolio.

In recent years, the tastes and buying habits of American consumers have evolved from canned foods to fresh ingredients and the packaged food industry is scrambling to catch up.

According to Bob Nolan, senior VP of insights and analytics of Conagra Brands in a recent Ad Age article, “We wanted to make one thing, we’d sell it everywhere to everybody and that’s not the paradigm. We want to sell the right food for the right folks at the right time.”

The article goes on to say, “Delivery services such as FreshDirect, Instacart, Peapod, and a variety of meal kits, give people fewer reasons to wander the aisles of their local supermarkets. People also graze throughout the day and cook less, eliminating the need to keep freezers stuffed with chicken pot pies.”

Less occasions and shifting consumption patterns. Without knowing it, Nolan is also describing radio and the shift from broadcasting via the transmitter to streaming and on-demand audio consumption.

A Familiar Refrain: Flat is the New Up

Conagra generates annual sales of $7.8 billion, down from $15 billion a few years ago when they started selling off assets and streamlining their portfolio. This fiscal year (ending in May) sales are expected to be down 2%. That performance is in line with General Mills, which is also expecting sales to be down 1-2%. Some analysts optimistically believe one or both could have flat year over year numbers.

Yet the Glass (or in this case the grocery cart) is Half Full, Not Half Empty

Darren Serrao, chief growth officer of Conagra Brands, shares this perspective: “It has nothing to do with the strength of the brands and everything to do with the products that represent those brands.”

While subscription based food kit start-ups such as Blue Apron connected with both consumers and investors out of the gate, in recent months both Blue Apron stock and the company overall have faced significant head winds.

In part, the recent difficulties for food kit start ups stem from Conagra expanding its product offerings by adding supermarket-distributed frozen meals and kits for dinners, such as chicken fajitas.

In a similar way, Conagra recently introduced a new line of Healthy Choice Power Bowls. As frozen TV dinners have fallen out of favor, applying the name recognition of the Healthy Choice brand to the popularity of Power Bowls is quickly gaining traction.

The way that Conagra is marketing its brands is evolving as well. Rather than the traditional one size fits all strategy, they are identifying and targeting specific consumer use cases and creating multiple versions of the messaging and creative.

For example, P.F. Chang’s sauces and frozen meals are purchased for a variety of reasons. People looking for a quick and easy meal, others who are interested in trying new flavors, but don’t have the culinary skills to make their own Chinese food, as well as those looking for a budget friendly version of going out to dinner or ordering carry out.

It’s not good enough for a brand to own a broad category image, such as Chinese food. Rather the opportunity exists to understand your heaviest consumers and the reasons they regularly use your product and segment the marketing strategy accordingly.

To borrow an analogy from retirement investing, this approach of segmenting target consumers and crafting unique messages for each group is similar to buying mutual funds instead of an individual stock.

Conagra was founded in Nebraska in 1919. Reinventing the business won’t happen overnight, but as they approach their 100th anniversary, they’ve already begun the heavy lifting.

As Conagra’s Nolan puts it, “What made you successful today is the worst possible thing that will make you a failure in the future. It’s easy to get comfortable, saying, ‘We’ve always done this.'”

The iconic Orville Redenbacher and other beloved consumer brands remain, but their product lines are being updated along with a targeted marketing strategy that focuses on connecting with their heaviest users.

For AM/FM radio, while our 700 billion minute per month advantage against streaming is real, we need to be enhancing and communicating the value proposition that we offer employed listeners in the unrelenting mobile world. By communicating targeted and unique messages off-air, you’ll win ratings today, while also building for tomorrow.

Whether it’s new ownership, new competition or just wanting to jump start the new year, we can help. Let’s discuss your competitive situation and how to invigorate your ratings and revenue. Send us an email or call 859-957-1581.

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


Junk Food Science: Creating a Tasty Result

March 4, 2013

Learning about how corporations create junk food is not for the faint of heart and a recent book excerpt in The New York Times Magazine is no exception. In this eye-opening look, author Michael Moss details the role that salt, sugar and fat play in processed food.

As many of us know first hand, humans are predisposed to enjoy these 3 ingredients. Armed with this knowledge, research teams go to work creating our favorite food products.

According to Moss, there is “the tendency for big, distinct flavors to overwhelm the brain, which responds by depressing your desire to have more.” However, if your brain tells you to stop eating, that’s what you’ll do. As a result, junk food tends to avoid creating distinct flavors so that we keep eating.

In fact as Moss continues, “The biggest hits – be they Coca-Cola or Doritos – owe their success to complex formulas that pique the taste buds enough to be alluring but don’t have a distinct, overriding single flavor that tells the brain to stop eating.”

This range, known as the “bliss point” allows people to eat and drink without decreasing their enjoyment, which helps maximize consumption. Although this systematic approach by the industry might not be common knowledge in most households, consumers are far from innocent bystanders.

As Geoffrey Bible, a former corporate CEO points out, “People could point to these things and say, ‘They’ve got too much sugar, they’ve got too much salt.’ Well, that’s what the consumer wants, and we’re not putting a gun to their head to eat it. That’s what they want. If we give them less, they’ll buy less, and the competitor will get our market. So you’re sort of trapped.”

The Other Half of the Equation

This comprehensive strategy is not limited solely to the scientific research that goes into product development. Identifying and engaging the consumers who matter most is also a critical component.

25 years ago, when Oscar Meyer was looking for a way to jump-start sluggish bologna sales, they found that making lunch was a stressful experience for working moms.  This research resulted in the creation of Lunchables. Mom’s had less stress each morning and Oscar Meyer jump started bologna sales. Now with more than 60 varieties on the market, Lunchables is closing in on $1 billion in annual sales.

Meanwhile over at Coke, according to Jeffrey Dunn, the former president and COO for North and South America, “the biggest consumers were referred to as “heavy users.” “The other model we use was called ‘drinks and drinkers,’ ” Dunn said. “How many drinkers do I have? And how many drinks do they drink? If you lost one of those heavy users, if somebody just decided to stop drinking Coke, how many drinkers would you have to get, at low velocity, to make up for that heavy user? The answer is a lot. It’s more efficient to get my existing users to drink more.”

Dunn, who is now involved in the marketing of baby carrots, which are at the other end of the food spectrum from soda, is using the same formula, by “acting like a snack not a vegetable.” From this insight was born the campaign, “Eat ‘Em Like Junk Food,” which highlights, “one of the most critical rules in processed food: The selling of food matters as much as the food itself.”

If you have a well programmed radio station that is not generating the necessary numbers, we can help. For current availability and more information on how we identify and engage the ‘heavy users’ who matter most to your ratings and revenue, please contact Andrew Curran, COO at DMR/Interactive.


Marketing RADAR: Reach And Depth And Relationship

February 3, 2013

Ever seen a struggling retail chain discuss a disappointing earnings report? It can seem as if the customers somehow let them down rather than the company existing in service of them.

Marketers are not immune from this world view. Much time and effort is spent developing strategies designed to efficiently and profitably get customers to behave in brand centric ways.

In this context, Nate Elliott from Forrester recently wrote an insightful Ad Age article that highlights what happens when you follow the journey of how customers actually behave. It turns out that distinctions like traditional and digital media are artificial segments that consumers don’t spend a lot of time thinking about while deftly switching between platforms.

Consumers engage with brands and interact with specific platforms based on where they are in the life cycle of the relationship. According to Elliott, there are four unique stages, “first customers discover a product or service; then they explore it in greater detail; next they buy the product or service; and after purchase they engage with the company from which they bought, as well as with other customers.”

This four stage cycle creates an opportunity to engage using Reach channels, Depth channels, and Relationship channels. Hence the marketing RADAR.

In recent years the terms Earned, Paid and Owned became marketing industry shorthand for a company’s PR, advertising and online efforts. Although effective as an internal frame of reference, RADAR shifts the focus back to the customer.

According to Forrester, “Reach channels get you into the consideration set. Depth channels tell your product’s story. Relationship channels serve your existing customers.” Most importantly, each channel is designed to engage with the customer at a different stage of the journey. Brands need to include all three in their marketing strategy.

The Listener’s Journey

Let’s look at the four stages of this life cycle along with RADAR marketing as it relates to radio.

Reach channels connect with listeners and help them discover your station. Increasingly we see clients use digital outdoor boards to engage commuters and supplement the more targeted aspects of their 360-degree marketing strategy with phone, mail, digital and social serving as Reach channels early in the campaign. Since the most important Reach channel has always been Word of Mouth, we believe in facilitating the share, which is why our Tell-A-Friend platform is so valuable, ensuring person to person referrals aren’t left up to chance.

In the 2nd stage, new listeners are exploring your brand. They are still a P1/P2+ with other stations, but might check out a Facebook post about your station that they see one of their friends commenting on. They also are checking out your station at contest appointment times or regularly scheduled features that they heard about from a co-worker.

As your station adds value to their day and they develop a relationship with your talent, they start to increase their listening, which is the equivalent  of making a purchase in the 3rd stage. This buying behavior, might result in them including you on their car presets or changing the office radio to your station. Your broadcast has become a Relationship channel.

In the 4th phase, your P1 listeners engage with your station as well as other listeners. They immediately open your email newsletter, they attend station events, they participate in your points program,  they comment on and like station Facebook posts, which takes them from being a dormant “Like” to being included in the much more valuable “Talking About This” metric. Best of all, when an invitation to Tell-A-Friend comes along, they become part of your Reach channel. Having journeyed through the four stage life cycle, they begin telling other people about their favorite station.

It’s human nature to try and short circuit this process, but as Forrester indicates, success lies in understanding that each listener is at a different step of the journey and engaging them accordingly.  DMR/Interactive has a unique ability to generate immediate results, while reducing volatility and building sustained growth over the course of the life cycle.

For more information on how we leverage Reach, Depth and Relationship channels to engage the listeners who matter most to your ratings and revenue, contact Andrew Curran, COO at DMR/Interactive.


Going Mobile: Speeding Down the Road Ahead

January 3, 2013

40 years ago the Who released “Going Mobile” off the album Who’s Next. At the time, Pete Townsend was talking about the freedom of living in a RV. Little did he know that a few decades later we’d all be Going Mobile in a whole new way.

The mobile platform offers infinite and fast changing possibilities to brands and consumers alike. Yet it is this fast paced evolution that can make the space challenging. For many brands, online and mobile strategies are treated one in the same. For others, mobile simply means offering an app.

The start of the new year provides an opportunity to think about your station’s mobile platform in a new way. As Jason Spero and Johanna Werther from Google point out, “having an app is not the same as having a mobile strategy…  Successful businesses are now adopting this simple but revolutionary idea: design for mobile first.”

This thought provoking and challenging insight is one of many presented in Google’s aptly named Mobile Playbook. In fact there is such rich content that our recommendation is to set aside some time to review this playbook, while thinking about your mobile platform and the opportunities that exist.

Key Questions for the Busy Decision Maker

This playbook is geared towards today’s fast moving executive and Google offers a framework and guidance around the following questions that are important to your mobile strategy.

1. How does mobile change our value proposition?

2. How does mobile impact our digital destinations?

3. Is our organization adapting to mobile?

4. How should our marketing adapt to mobile?

5. How can we connect with our tablet audience?

These questions merit thought and conversation. In the mobile space, you aren’t just being compared against your traditional competitors, but to any brand that has a mobile presence and a relationship with that listener.

Let’s take at a look at each area and how it applies to radio. As you review the mobile playbook, most of the content is focused on mobile strategies for retailers yet much of the content as well as the mobile insights are worth your time and consideration.

1. The value proposition of mobile. How does your audience want to interact with your brand via mobile? This is an entirely different question than, how do you want them to interact with you? For example, many retailers make the investment to build a mobile site to directly generate mobile sales. However, mobile site developer Digby has found that across their sites, mobile customers use store locators 63 times for every one mobile commerce order.

If streaming is the equivalent of a mobile transaction to a station, what functionality could you offer people who want to engage your brand even if they are not listening?

2. Impact on digital destinations. How does the user experience of using a smart phone on your station website compare to ESPN.com? According to Google’s Mobile Playbook, “Rather than pegging mobile as the ‘third screen,’ ESPN thinks of it as the ‘first screen.'” When you visit ESPN.com on a smartphone, the page is clearly optimized for mobile. Even if you aren’t able to design for mobile first, it should no longer be an afterthought.

For example, we know a couple of important things about Pandora listeners 1). They are heavy radio users 2). 70% of Pandora listening happens via mobile. As a result, how would you describe the experience of these valuable listeners when they come to your mobile site from Pandora? Is your site clean and easy to navigate?

3. Adapting the organization. Who in your organization is your mobile champion? What executives track mobile metrics? Who’s watching the competition’s mobile initiatives and what priority does mobile receive in terms of funding? If you have an interactive department that runs your online properties, these questions become even more important.

4. Mobile impact on marketing. Approximately 30% of emails are opened on smartphones. In addition, the ability to touch and interact with the screen means that the term “click” refers to PCs and laptops not mobile interfaces. In addition, because people aren’t sitting at a desk. mobile search results and banner ads creative needs to be optimized for mobile.

In fact, in our campaigns, for the last several years we have been offering a mobile version of contest registration forms and in our campaign reporting, we break out the mobile performance of digital ad campaign.

5. Connecting with the tablet users. Most listener driven interactions with your brand on tablets are likely to happen on nights and weekends. Along with considering the appearance of your website on tablets, how do your station’s social media efforts look on this platform?

Tablet users are still small in total numbers, but they have increasingly significant buying power. 72% of tablet owners use their device to make a purchase on a weekly basis.

Google’s Mobile Playbook is filled with real world examples that demonstrate how other companies and brands are leveraging the mobile platform. Google also offers Ready to Go Mo that helps evaluate and improve your current efforts.

Mobile is a significant part of our listener recruitment, activation and engagement strategy. We also serve as a resource for many clients who seek to leverage their mobile platforms as another way to stay connected with the listeners who matter most. For more information on how we leverage the value of mobile, contact Andrew Curran at DMR/Interactive.


Post Apocalypse Opportunity: Sharing Control of Your Brand

December 3, 2012

Assuming the world doesn’t end as predicted by the Mayan calendar later this month, the additional time could serve as an opportunity to rethink how you position and promote your brand post 12/21.

The Gap has launched a new initiative called Styld.by, which leverages the talents and influence of the blogging community to promote its new clothing line.

According to Scott Symonds, managing director-media at AKQA, “So rather than trying to push out a message, we create something distributed instead.” Symonds continued in a recent Ad Age interview, “The driving force is the strategic insight.”

The Gap selected 6 of the most popular internet fashion bloggers: Refinery29, WhoWhatWear, FabSugar, Lookbook, Rue and MOG, which prior to the campaign already combined to have almost 1,000,000 visitors per month.

According to Katherine Leonard from lonelybrand, “Fashion bloggers with a small following and similar tastes are growing more and more appealing because they are easier to identify with than fashion magazines or celebrity icons.”

Leonard continued, “Each partner styled looks using items from the Gap’s Spring 2012 line as the basics, which they then complemented with items from other brands. The philosophy here is that normal people don’t dress head-to-toe in one brand, so why not be realistic and create eclectic outfits generated from different stores, eras and price ranges.”

Embracing the Obvious

People not dressing from head to toe in one brand is hardly a revolutionary concept, unless of course you’re a brand manager at the Gap considering a proposal from AKQA to allow bloggers to combine your clothes with clothes from other retailers.

Symonds continued, “For Gap, the brand wanted to regain style authority and positive trendiness … and Gap needed a way to rediscover it.”  By proactively working with bloggers, the Gap created something that would have  been impossible for the brand to generate on its own. Rather than pushing out a message with a targeted buy, the new line ended up being  distributed through a trusted network that co-creates a sense of style and drives sales.

This opportunity is certainly not limited to retailers. As Symonds sees it, “Now, the rise of social has created this awareness of sharing control of your brand with those supporters and evangelists. It doesn’t mean every brand has to let go of control, but it does mean you need to figure out your ‘distributed’ position and how to work with brand evangelists positively.”

The holiday book is a great time to think creatively about your brand and marketing strategy for the upcoming year. Do you know the bloggers in your format or market who are most influential to your audience? How about the listeners who are already regularly talking about your station?

Our playbook workshops are a great way to develop internal strategy, accountability and measurement to generate awareness and engagement amongst the listeners who drive ratings and revenue. For more information, contact Andrew Curran, COO, DMR/Interactive.


Red Bull Stratos: Taking Marketing to New Heights

November 2, 2012

Last month, while Felix Baumgartner jumped from a record height of 128,000 feet and broke the sound barrier during his freefall, Red Bull was also setting records of their own.

As one Huffington Post columnist wrote, “One small jump for Red Bull, one giant leap for business marketing: Red Bull Stratos may be the most successful marketing campaign of all time.”

The event was seen live on You Tube by more than 8,000,000 people. While over on Facebook, Red Bull’s picture of Baumgarner generated nearly 216,000 likes, 10,000 comments, and 29,000 shares within 40 minutes of being posted.

Red Bull did not set out to create a publicity stunt for social media or simply sponsor an event, more significantly they captured our collective imaginations with a strategic investment that historically has been reserved for government agencies like NASA.

Across social media, 82% of the conversations about Red Bull were unequivocally positive. As a point of comparison, on the same day, Starbucks was the 2nd highest scoring brand with just 25% of the posts being unequivocally positive.

Lessons from Space

Assuming your marketing budget can’t send someone into space, what are the key lessons that can be learned from Red Bull?

According to British journalist Nicola Kemp, the first takeaway is that brands need to have a purpose that fans can connect with beyond helping drive sales.

While those of us in marketing and advertising initially gravitated toward analyzing the metrics that Red Bull generated (after marveling at the actual feat itself), another important area of focus is understanding that brands can create an “I was there moment” and capture the imagination of an entire generation. Red Bull made science fiction come to life for kids and adults alike.

Another important lesson is that brands can connect with consumers not just to improve the bottom line, but more importantly to improve people’s lives. By first enhancing the customer’s life, a stronger bottom line will result.

As Lisa MacCullum Carter, managing director of Access to Sport at Nike says,  “Although elite and professional sport can inspire and encourage young people, it cannot on its own increase participation levels and access. Funding is crucial, but effective change will require unprecedented collaboration and action from governments, communities, corporations and civil society.”

Kemp’s final lesson is her most important. If you don’t consistently invest in and promote your own brand, why should your audience? Many experts believe that Red Bull re-invests 30-40% of its revenue back into marketing.

Even without literally sending anyone to space, radio has traditionally done many of the very things that Red Bull accomplished with the Stratos project. For example, when it comes to capturing the audience’s imagination, we’ve been creating theater of the mind with audiences for decades.

In addition, long before Felix Baumgartner came screaming back to Earth, radio shock jocks have been creating “I was there” moments for their listeners.

However at a time when station budgets are increasingly tight and headcounts are low, the advertisers who have traditionally paid us for access to our audience via a spot schedule, are able to create large audiences by generating their own compelling content.

It wasn’t the size of the marketing budget that gave Red Bull the ambition to turn a dream into reality. More importantly, rather than simply trying to bring your own dreams to life, why not make dreams come true for your listeners who matter most.

To learn more about how your station can cultivate listener insights via a Points of Passion project that generates awareness and engagement amongst the listeners who drive ratings and revenue, contact Andrew Curran, COO, DMR/Interactive.