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

March 18, 2019

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

March 11, 2019

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

February 19, 2019

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