Do You Hear an Echo? Amazon is Fast Becoming an Ad Platform

March 7, 2017

The Amazon Echo has received a lot of attention from radio in recent weeks. First, as a way to increase in-home listening after being described as “Radio’s Next Can’t-Miss Opportunity.” More recently as a theory to help explain how an online stream went to #1 with a bullet in Tampa.


There’s a third angle that is also worthy of radio’s attention and consideration. The role the Echo will play in helping Amazon increase its ad revenue. Amazon’s fastest growing billion dollar division isn’t drone deliveries, it’s advertising. Currently, it’s lumped in as “Other” revenue in their financials.

According to Business Insider, on a recent earnings call, Amazon’s CFO, Brian Olsavsky, agreed that while it’s “very early” to discuss the full potential of ad revenue growth, he acknowledged it was a “good strategy” for the company.

With half of US households already belonging to Amazon Prime, the ability to connect purchase data to ads being served gives them visibility into the full customer buying cycle in a way that Facebook and Google can only dream of.

According to Sir Martin Sorrell, CEO of the world’s largest advertising group, WPP, what keeps him up at night isn’t his 3 month old daughter… it’s Amazon.

As reported in Business Insider, “Nobody in the online ad business has more data about the way we shop, how often we shop, and what items we look at and decide not to buy.”

Yet the proliferation of Echo devices also presents a unique opportunity for radio to regain at-home listening after radios began disappearing from households during the last decade.

We can also use this opportunity to be thoughtful about developing a strategy that keeps your station Top of Mind and puts our best foot forward on a device often purchased initially as a personal assistant. Radio has a tremendous value proposition and dominant market share in audio.

Crafting a compelling value proposition for why your station should be Top of Mind for listeners on voice activated devices is time well spent, especially as voice command also becomes more prominent in cars. To get started, drop us a note and let’s talk about how we can incorporate your on-air Can’t Miss Moments and brand position into a compelling message strategy to those who matter most.

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


Table Stakes: What It Takes to Play the Game

February 20, 2017

Verizon and Walmart have each recently made significant announcements that are generating headlines. However instead of being credited for innovation, these investments are necessary to simply keep up.

For Verizon, it’s unlimited data and for Walmart it’s 2 day online shipping.

Walmart is hoping that by using a $35 minimum order for free 2 day shipping, they’ll be able to gain ground on Amazon Prime. However, it’s already a juggernaut with half of U.S. households belonging to Prime and even more importantly, those households spend nearly twice as much per year as non Prime households.

According to Consumer Intelligence Research Partners, the average Prime member spends “on average about $1,100 per year, compared to about $600 per year for non-members.”

In a story about the shift in strategy in recode, Marc Lore, CEO of Walmart’s U.S. e-commerce division said, “in today’s world of e-commerce, two-day free shipping is table stakes.” At the same time, he called the initiative “the first of many moves we will be making to enhance the customer experience and accelerate growth.”

Switching gears from online shopping to the mobile devices and carriers people use to make such purchases, Verizon is now offering unlimited data.

Just last month on an earnings call with investors, Verizon CFO Matt Ellis announced that adding an unlimited plan is “not something we need to do right now.”

However, corporate strategy can quickly evolve, especially when stock price is underperforming. As reported in MediaPost, “Verizon shares have dropped about 2.3% over the past 12 months, compared with a 78% surge for T-Mobile and a more than threefold gain for Sprint Corp., which has also been aggressively pushing unlimited plans,” observes Bloomberg’s Crayton Harrison.

In both cases, express 2 day shipping and unlimited mobile data, which previously commanded a premium from customers, are now baseline expectations.

Table Stakes for Radio

When we view radio through this lens, many items quickly come to mind as table stakes … engaging personalities, strong music position, multi-platform social media presence, video production, streaming, station mobile app, and most recently, Alexa voice command integration.

However, all of it has become table stakes and no longer provides a long term competitive advantage that can be leveraged and aggressively monetized.

In a world of infinite content creation and distribution channels, the old model built on scarcity and licenses, has been replaced with a new model built on abundance. In this environment, doubling down on your content might not be your best bet. After all, how much content do your personalities actually create when you analyze your clock?

According to Harvard professor Bharat Anand, author of the book, The Content Trap, media companies have “a bias towards content, product and quality.” Yet the real opportunity is to leverage your content to empower listeners to connect with each other.

Want more proof of this strategy? Look no further than Facebook.

Just three years ago, in 2014, Facebook crossed $10 billion in annual revenue for the first time. Overall, it was much smaller than radio. The following year, in 2015, they eclipsed radio for the first time with $17 billion in revenue and in 2016, they started to significantly pull away, generating $26 billion in ad based revenue.

What did Mark Zuckerberg say earlier this month as he reported earnings? “Our mission to connect the world is more important now than ever. Our business did well in 2016, but we have a lot of work ahead to help bring people together.”

What does Wall Street think of this audience connection strategy? Facebook’s market cap is currently $385 billion, $200 billion more than Comcast, the largest media company that focuses on generating content. In fact, you could add Comcast ($180B) and Disney ($170B) together and still fall more than $30 billion short of the market cap of Facebook.

Whether it’s crowd sourced content or professionally generated, the billion dollar question is how does your content connect the audience with each other?

Is your target demo working moms? How are you helping them share dinner recipes or summer camp options for their kids? As a community forms around these conversations, there will be plenty of opportunities to monetize this audience generated content.

Similar to hosting a party, you make sure the guests are having a good time by joining the online conversation, add a few on-air mentions and moderate the inappropriate comments, while letting those at the party do most of the work generating the content themselves.

It starts with knowing your listeners by name and understanding that in a world of infinite content, there are new ways to evolve and grow, which connect listeners to each other and transcend the transmitter.

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

Andrew Curran, President and COO


The World Has Changed: Has Your Marketing Strategy Evolved With It?

January 19, 2017

The explosive growth of technology and mobile continues to accelerate. Yet within this changing landscape there are fundamentals that guide best in class brands.

The Marketing 2020 initiative was launched by Adobe, the Association of National Advertisers, and Millward Brown Vermeer to identify best in class strategies and structures.

In fact, their goal was to methodically study what separates superior marketing organizations from the rest.

According to the Harvard Business Review, the research included “in-depth qualitative interviews with more than 350 CEOs, CMOs, and agency heads, and over a dozen CMO roundtables in cities worldwide.” In addition, quantitative surveys of more than 10,000 marketers were conducted in 92 countries.

From this research, several insights were identified that are significant to radio.

Financially Outperform Your Peers with Data. Top performing brands not only use analytics to improve targeting and delivery of marketing messages, but also incorporate the ability to combine data about what consumers are doing with an understanding of “why they’re doing it.”

Among leading organizations that effectively leverage analytics, the role and impact of marketing touches every corporate function, which also helps to ensure consistency in budget and execution.

The Trifecta of Winning Brands. The Marketing 2020 study revealed the consistent delivery of three essential elements by leading brands.

Functional Benefits: The job the customer is expecting – morning caffeine from Starbucks.

Emotional Benefits:
Fulfill the customer’s emotional needs – drinking Starbucks coffee has become a status symbol.

Societal Benefits:
Helping create a better world – Fair trade coffee and baristas earning a living wage.

For most stations, the Functional Benefits include entertaining companionship along with music and local content. The Emotional Benefits are the enjoyment that listening brings to a commute and work. The Societal Benefits would be the frequent charitable opportunities such as supporting St. Jude’s or Children’s Miracle Network.

This is a different approach than blasting everyone in your email database the same message. That’s where analytics comes in. Data segmentation can also be used to generate stronger ROI for advertisers and help secure sponsorships and annual buys.

The goal is to create a Total Experience with your brand by providing personalized messaging and relevant touch points that generate deeper engagement and consumption.

Not only is this level of sophistication possible for your stations, but consumers are expecting it. After all, your brands are not just being compared to the station across the street, but against global brands and the immersive experiences they are providing your listeners.

In addition, when your latest marketing campaign has come and gone, you have an ongoing asset with your audience database that you can continue to leverage and monetize as you drive ratings and revenue.

Think, Do, Feel: Marketing Centers of Excellence with Distinct, but Integrated Functions

Think: Leveraging data analytics to refine the target and messaging strategies as well as optimize the ROI.

Do: Developing content and creative along with seamlessly executing the multi-platform marketing plan.

Feel: Focus on maximizing the impact of each target consumer’s experience with the brand: on-air, online and at station events.

Although the pace of change continues to accelerate, data analytics and mobile provide amazing opportunities to offer engaging touch points with those who matter most to your ratings and revenue.

To read the entire Harvard Business Review article and for more information about leveraging these Marketing 2020 insights for your station, contact win@dmrinteractive.com.


It’s the Most Wonderful Time of the Year: For Your Favorite Charity

December 19, 2016

The iconic Salvation Army Red Kettle embodies generosity to others during the holiday season (it also recently got some further love during a Cowboys game). In December alone, Americans donate $70 billion to charities nationwide.

kettle

Although many people take time off the week after Christmas, it’s crunch time for non-profits with 10-12% of all donations for the year coming in between 12/28 – 12/31. In addition, two-thirds of all giving during the year, comes from just 5-10% of donors.

The handful of households that make a significant difference is as true for radio as it is for non-profits along with the realities of limited time and resources.

Leading charitable organizations embrace this concentration, because it is much more efficient and effective to generate donations from a few (heavy P1 listening), rather than trying to get $1 from every household in town (cume).

Meanwhile lesser non-profits take the approach of focusing on donor acquisition, which actually comes at their own expense.

A Leaky Bucket

As reported in the Chronicle of Philanthropy, for every 100 new donors added, charities lose 103. That’s the definition of a leaky bucket, especially considering individual giving peaked in 2005 and still hasn’t recovered more than a decade later.

A big part of the problem is that new donors are less loyal then repeat donors. In fact, just 19% of first time donors are retained compared to 63% retention for repeat donors.

But here’s another insight that leading non-profits know … heavy donors (those who give $250+) are 150% more likely to continue giving than those who give less than $100. Not only are they worth more, but they are also more loyal.

Obviously every major donor at some point made their first gift and every current heavy P1 had an initial tune-in, but the driving force for successful charities and radio stations alike is to get more out of your current fans before recruiting new ones. In addition, there’s an opportunity to understand the characteristics of your current Super-Fans, so you can focus your recruitment efforts to get more people just like them.

Charitable organizations that regularly outperform their peers follow these donor retention strategies, which have a variety of relevant applications to radio.

1. Send donors a personalized thank you after each donation. By “personalized” it doesn’t simply mean a mail merge, but rather for example, a picture of someone who directly benefited from the gift. Sounds like a lot of work, but it’s twice as hard to replace a donor.

In radio, do we cross reference people who purchase tickets to a station event with people in the VIP email club and send these Super-Fans any acknowledgement? How about people who come to a remote at your station’s #1 advertiser? Simply look at the entry forms for the giveaway and if they’re in a Hot Zip, drop them a note.

2. Learn about your donors, including their philanthropic passions, family, and employment. For most stations, in depth listener knowledge is defined as the database records that have a name, address and email.

Are they employed? If so, what’s their regular work schedule? Do they have kids? All basic information that can be systematically gathered over time, which will allow you to better engage and monetize your audience.

3. Schedule donor-centric events such as networking opportunities or appreciation luncheons. Many stations just rolled out the red carpet for their client holiday parties. Ever done something similar for your best listeners who drive your ratings? An easy place to start would be to super serve contest winners who come to pick up their prize vs. getting them out the door as quickly as possible.

4. Be confident and ask for the next gift. Don’t just assume you’ll automatically get it. Just like charities need to consistently ask for the next donation, we need to ask for the next tune-in. The most common reason people don’t give is that they weren’t personally asked. Yet, charities believe all they do is ask people for money. What’s the disconnect? The request needs to be personal, frequent and compelling.

Same is true for listening occasions. People have a lot of choices and if they aren’t literally in front of a radio, are they going to Google your station homepage to find the stream and start listening? Cut out the middle man and make it easy on your audience with direct links to listen online.

Some underestimate non-profit organizations, because they focus on the mission and overlook the strategic component that’s essential to ongoing success. For more information on maximizing your approach to the few who matter most to your ratings and revenue, drop us a line.

On behalf of Catherine Jung, Doug Smith and the rest of the DMR/Interactive team, thanks for reading and driving radio forward.

Happy Holidays from all of us here.

Andrew Curran, President and COO, DMR/Interactive.


Food for Thought: The Bottomless Bowl of Infinite Scroll

December 9, 2016

Ever noticed you or your spouse scrolling endlessly on Facebook? What starts as a quick look turns into 10 minutes of time spent randomly wandering through Facebook.


It’s no accident… welcome to the bottomless bowl of infinite scroll. This doesn’t just apply to social media, it’s hard wired into human DNA. According to Cornell University, when someone is given a bottomless bowl of soup, people eat an astounding 73% more than if they have to refill their own bowl. This type of behavioral economics is a key aspect of the Facebook business model, which worth noting, generated $7 billion in revenue during their latest quarter.

Humans are inherently lazy. While you might think that it doesn’t take much effort to click on a link at the bottom of a story, it’s more effort than Facebook believes is necessary and they are not alone.

But what about page views? Take a look at ESPN… the Worldwide Leader in Sports. As the bottomless bowl moves from one article to the next, the address in your URL changes without the user doing anything. Here’s an article about the NFL MVP race, as you scroll from one article to the next, pay attention to your URL.

Meanwhile for daily newspapers including the legendary Page Six, it’s still a page view strategy built on one and done.

Not to be outdone, while trying to increase page views and time spent, radio websites are almost exclusively one and done as well. When you click on a story or article on any station site, you can scroll to the bottom of the bowl (article) in 3-5 seconds. True both on mobile and desktop. Radio would do well to emulate Facebook and ESPN, while distancing itself from the user experience found on local newspaper sites.

On-air, radio isn’t just competing with stations up and down the dial and it’s even more true online.

The people visiting your website are highly engaged fans. Why not keep their attention longer and keep your brand top of mind with an updated web strategy. It could be the perfect gift to give yourself this holiday season.

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

Andrew Curran, President and COO, DMR/Interactive


Everybody’s Working for the Weekend: DOL’s 12/1 Overtime Rule Set to Impact Listening

November 21, 2016

Radio’s at-work dominance is unparalleled among media platforms. Across formats and markets, 75-80% of the audience is employed with 65% of weekday listening happening away from home.

For radio this doesn’t just represent a 40 hour work week, it represents 160 available quarter hours. More realistically a 50 hour work week represents 200 quarter hours and on down the line.

Courtesy: guardian-jp.com

Starting next week, the available quarter hours for millions of non-exempt American workers might take a hair cut as employers are in the process of making final HR decisions to maintain compliance with the FLSA.

These changes provide plenty of food for thought about radio’s role in the workplace.

After all, getting in the car and arriving at work are the two most important Moments of Truth for radio… the point when consumers turn on their preferred audio companion.   

For our part, these overtime changes have inspired us to revisit radio’s connection with its core consumer: employed persons and we offer these observations.

1. People are Living Paycheck to Paycheck: Even after these changes take effect, non-exempt workers aren’t going to feel like they’ve won the lottery. In fact, according to the Federal Reserve, almost 50% of Americans are unable to cover an unexpected $400 expense.

It’s a big reason why incentives matter. Even non-cash giveaways such as gift cards and movie passes help stretch a family budget.

Looking out at this economic landscape, understanding the role of incentives for Nielsen households, along with how important at-work listening is to heavy radio consumption, this year we officially trademarked Double Your Paycheck for use by our clients in addition to other Win@Work messages.

2. The Gig Economy and 9a to 5p Schedules: Every time you see the Post Office delivering Amazon packages on Sunday, it’s a reminder that a set work schedule is no longer guaranteed even for the Cliff Clavin’s of the world.

In fact, according to the Government Accountability Office, 40% of all workers are now contingent (temps, independent contractors, part timers, etc). When a station starts its “workday” at 9am with 90 minutes commercial free, are we unintentionally writing off members of the Gig Economy who regularly work non-traditional schedules? Not to mention full time employees working four 10 hour days or who telecommute and have been at work since 7am. How is radio winning their Moments of Truth?

For many of our marketing campaigns, we provide a listening grid so people can customize their contest entries based on their work schedule and when they can listen.

3. Radio Makes the Workday Better: Our most fundamental value proposition in winning Moments of Truth is that people enjoy listening to the radio. This was the in depth finding of Britain’s RAB back in 2011 in a report entitled, “Radio: The Emotional Multiplier” and it continues today.

People act in their own self interest. Faced with a variety of audio entertainment options, each day people seek out their favorite radio station to make their commute and workday more enjoyable.

When given the opportunity to meet a DJ or tour the station, Super-Fans are like kids on Christmas – they can’t get enough.

The American workday continues to evolve and radio will innovate along with it as we find new ways to serve our core consumers: employed persons.

To discuss how you can make the most of the changing workday and the 160 quarter hours it represents, please send us an email.

On behalf of Catherine Jung, Doug Smith and the rest of the DMR/Interactive team, thanks for reading and Happy Thanksgiving.

Andrew Curran, President and COO, DMR/Interactive


More Cowbell: Radio’s Untapped Mobile Advantage

October 24, 2016

SNL is doing some of its best work with the Trump-Clinton debate parodies. Another iconic skit, More Cowbell, featured Will Farrell, Jimmy Fallon and Christopher Walken and speaks to the crossroads where radio finds itself.

Does radio double down and give audiences and advertisers More Cowbell or focus on reinvention in the mobile space?

Courtesy: NBC.com
Fresh off his best July since 2012 with Q3 up 8% over 2015, Art Sutton, President and CEO of Georgia-Carolina Radiocasting, had this to offer Tom Taylor last week about what drove their strong results, “Nothing special or unique going on in our company. Just doing the simple basics consistently.” In SNL parlance, More Cowbell.

Sutton continues, “We’ve always had far too many people in the radio business who are looking for the latest ‘new’ thing, when all they need to do is do the ‘old’ thing better. You do this when you really don’t believe in your own product or simply don’t know how to do good radio.”

As an industry, radio is going to have difficulty achieving $20 billion in revenue by 2022 (#20×22) solely on digital growth. In the long run, we will succeed by increasing the monetization of our core products.

Why can’t radio predictably rely on digital growth? Because increasingly, digital revenue belongs to just two players: Facebook and Google.

According to AdAge, Google and Facebook collectively earn “72% of the digital and mobile revenue outside China.”

The story continues, these two giants “are gaining even more sway, thanks to a legion of employee teams dedicated to most of the largest U.S. and global advertisers, sometimes embedded with marketing departments and always closely aligned.”

These Facebook and Google employees are part of global advertising agreements and have a role, “unlike anything the marketing world has seen before.”

For other media companies, trying to win digital business from the outside is like bringing a knife to a gun fight. At the same time, the world isn’t standing still and AM/FM radios are increasingly hard to find in homes, work places and even cars, so what can be done?

Enter the California Roll

According to author and tech startup guru Nir Eyal, “People don’t want something truly new, they want the familiar done differently.”

Take for example sushi. Back in the 1970’s Americans wanted nothing to do with raw fish, tofu and seaweed. “Then came the California Roll … its impact is undeniable. The California Roll was made in the USA by combining familiar ingredients in a new way.”

Another example, early computers. By using familiar terms/icons like folders, notepads and trash cans, the complexity of this disruptive technology was made accessible and familiar.

Citing a more recent example, Nir reminds us that “the rebranded Apple Wallet helps users feel comfortable with the technology by making payment options look just like mini credit cards. Even though there’s no technical reason to do so, Apple understands the power of the familiar.”

What does this mean for radio? When it comes to the mobile space, radio is not playing to two of its core strengths: ease of use and familiarity. As the car becomes increasingly complex and we compete with more platforms for attention and loyalty of the audience, we are at a disadvantage trying to replicate apps and interfaces designed by digital brands instead of leveraging the best parts of a radio interface that consumers already understand.

In fact, customization and the ability to skip songs are two of radio’s biggest weaknesses, which are exposed rather than softened when the mobile experience of a station feels more like Pandora and Spotify than radio.

Imagine station streams and apps designed as presets on a radio interface featuring all the stations in a local cluster including their online only streams, making it as easy to switch from one station to another on a phone as a traditional car radio. Familiar done differently.

As his Eyal’s Nir and Far blog points out, “Our aversion to things that are outside the norm is particularly hard on companies producing radical innovation – no matter how beneficial they may be. If using a new product does not feel familiar, it faces severe challenges.”

According to BJ Fogg with Stanford University’s Persuasive Technology Lab, “People are generally resistant to teaching and training because it requires effort. This clashes with the natural wiring of human adults: We are fundamentally lazy. As a result, products that require people to learn new things routinely fail.”

Our P1 Super-Fans and Amplifiers seek out their favorite radio station 2-3 times per day. They certainly want More Cowbell from radio, we just need to leverage our familiarity and ease of use to drive occasions and TSL on mobile devices. Otherwise, we risk audience and revenue erosion as we try and replicate digital only brands on the infinite dial.

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

Andrew Curran, President and COO, DMR/Interactive