Rage Against the Machine

Rage Against the Machines

Making predictions is so hard, especially about the future
– Yogi Berra

It is not without some satisfaction to know that 2017 was a disruptive year for digital advertising. Proctor and Gamble and JP Morgan pulled over $200 million dollars out of their digital ad budgets based on poor ROI results, or to use digital’s term, ROAS or Return on Ad Spend. Meanwhile, Facebook has endured blistering criticism and scrutiny about the accuracy of their audience data and reporting standards.

Adding to client rage is the nagging issue of bots, malware, and the environment of what sites are carrying a client’s image through the numerous, unknown third party “networks”. It is now projected that audience fraud, which is mostly ads seen or heard by non-humans, will approach a worldwide loss for clients of $16.1 billion with a B in 2017.

Material disruption in any industry always leads to significant change and opportunity for other industries to advance and so it is that 2018 should finally be the year that Radio and its pure digital platforms begin to receive the value and respect from major advertisers that Radio so richly deserves.

And here is why:

According to Ad Age, 64% of marketers are unclear about the origins of their data sources, and three of four admit they are not confident that their digital ads are reaching the right people. In an effort to make their ad budgets work harder and provide more return on investment, advertisers are starting to demand more transparency from the digital giants, including transparency on fees, which could cause consolidation for digital media buying.

The trend towards actually knowing if major brands are reaching their target will continue as Amazon looms over every marketer’s thinking. Without fanfare, Amazon has created a one-billion dollar a year digital advertising monster convincing vendors to spend their advertising on Amazon’s platform. Kroger has launched a similar model for its vendors, touting its loyalty program and consumer shopping habits. There has never been a more disruptive time for media spending at all levels and in all media.

According to GroupM, the projected share of media in 2018 will perform as follows:
43.3% for TV – 33.1% for Digital – 10.9% for magazines – 6.2% for newspaper – 4.2% for Radio – 2.4% for out of home. Additionally, when asked, 97% of agencies will invest in social media site Facebook, 64% will use Instagram, 60% will use YouTube, and 38% will still invest in Twitter.

Despite all of its ad fraud, lack of accurate consumer targeting, poor commercial and image environments, and documented non-human viewership, digital remains as broadcast Radio and TV’s main ad budget killer. Our collective response to digital’s encroachment on “our clients” is either aggressive denial or worse, a belief that if we keep staying the course on how Radio does business, we will survive. Right.

May we suggest a better approach to growing our industry?

Let’s join the client conversation.

Radio needs to be in “the room where it happens” when target marketing, same store sales, market share, conversion rates, brand awareness, and actual, documented audience delivery is discussed. Not at the buyer’s desk, but at the planning meeting and the account team meetings and preferably, at the client meetings. The Internet Advertising Bureau continually hosts client industry events on both coasts using various aspects of internet advertising to begin (and continue) a conversation with clients. Radio should host its own industry summits; not just to sell, but to help facilitate the dialog and learn how best to blend Radio’s strength with client advertising goals and concerns.

We recently spoke to 350 auto executives at a J.D. Power Auto Conference in Los Angeles as the run up to the massive LA Auto Show. We met with astute auto industry people who asked solid questions about Radio and professed a lack of awareness of Radio as “digital is the big dog now”. It became obvious to us that if we could speak (and listen) to these executives at these types of conferences every month, we could change budgets, minds, and yes, misconceptions about Radio and our digital platforms.

Rediscover Radio.

From audience cume and TSL listener growth, Radio’s popularity, as measured by Nielsen’s actual listening data, (and not bots) is at an all time high with a 97% reach of the U.S. population. No other digital media can claim such audience reach, not even TV.

The commercial environment offered by Radio is filled with engagement, personality, peer to peer relatability, attentive and captured consumers in their vehicles, and a trust and believability from its listeners that no other media enjoys. And it’s all delivered in real time.

There are no ad blockers with Radio, no “skip this ad after 5 seconds” links, and certainly no doubt as to the target audience each Radio station is reaching. And since Radio licenses are still controlled by the FCC, clients can be assured their message will not be heard surrounding vulgar, racist, or unsavory programming. A client’s public image should be everything.

Radio’s digital platforms are real, measured, and highly targeted.

Radio’s digital platforms, mobile apps, and social media extensions are the ideal media full circle touch point. With broadcast Radio providing the needed reach and targetability, clients can then utilize the same station digital offerings to reach the same loyal audience again, in a different environment. And with a visual ad that complements the audio ad, and on a different device, and all at a different time of day. Imagine the client’s message mentioned to the morning team’s twitter following or at station sponsored concert or event? Imagine the trust clients have just built for their brand, and the affinity associated with their targeted consumer.

Can we also discuss zero ad fraud with Radio’s digital platforms?
The average Radio station in the U.S. in 2017 generated 90% of its revenue from over the air commercials, NTR and events, and 10% from its digital platforms. The cold reality is that percentage has not changes in years. If Radio is to grow its digital revenue, it must learn to collaborate with its clients in new, forward thinking partnerships that allow for multi media ad spending while increasing Radio’s voice and spend in these right-brain conversations.

Radio can “rage against the machines” but it’s a non-productive emotion. If we know “the machines”, their strengths and their weaknesses, then Radio has the unique and enviable ability to adapt and grow with any of our clients and their digital partners. We will not be a tag along, but rather the equal and powerful partner that we are.

If the Radio industry develops this positive approach to creating value with a deeper dialog about our digital and broadcast worth, we will then be serving our clients with richer and more robust solutions to their growing marketing and competitive challenges.

We can “rage against the machines” or we can harness our inherent value and grow with them.

We can control our Radio’s destiny, and our own.

Thom Callahan
Southern California Broadcasters Association
January 2, 2018

Rage Against the Machines



SCBA President writes new post about “Media Reallocation Now”


SCBA President writes new post about “Media Reallocation Now”
September 7, 2017

Los Angeles, CA, August 8, 2017 – Southern California Broadcasters Association President Thom Callahan urges the Radio industry to adapt a “Media Reallocation” strategy for both client’s and Radio’s growth. The SCBA post describes Radio’s real strengths and competitive advantages that clients need to review again, especially in today’s disruptive business environment. The latest “Thought Leader” post from the SCBA, which is entitled “Media Reallocation…Now” is at http://www.scba.com

“Media Reallocation is based on an unshakeable belief (backed by facts) that Radio and its numerous digital platforms can be more efficient and effective than other media and should be earning a larger share of our clients’ precious ad budgets. Not because we are greedy; but because we want our clients to invest their media dollars wisely. By doing so, their success and ours are assured. Real partners in business do that,” said SCBA President Thom Callahan.

Media Reallocation Now

Pushing Back on DERP

The term DERP originated from those little rascals on “South Park” and its literal meaning is simply this: people who keep saying the same thing no matter how much evidence accumulates that it’s completely wrong.

DERP is everywhere of course, but it does seem to be especially concentrated towards Broadcast Radio. The latest heaping of DERP seems to becoming from the pure plays, which with Apple’s 3 billion dollar jump into the Internet play list space, is now collectively insisting they will finally push Broadcast Radio aside.

The DERP crowd believes that Apple’s huge base of customers will fall in line and spend $10 a month to hear mostly music they can hear anywhere, while initial research has already concluded that at best, only 21% of the available online listening audience will move to Apple’s new service. Even Apple can make mistakes. Remember the Newton?

Not to be outdone, Spotify wants you to start watching videos (Better CPM’s from video than audio no doubt) while Pandora continues to lose money and has stopped reporting monthly subscriber numbers since they have no good news to report. Please note that there is no pure play on the planet that can describe its audiences as listeners, only Broadcast Radio can do that.

Reason #55 to invest in Radio instead of pure plays: Radio has actual, real live listeners that can be counted by Nielsen. Pure plays can only offer a subscriber number, which is like Cable TV, the set is on, but is anyone watching or for pure plays, is anyone listening? Think on that, please.

The DERP also touts that the “connected dashboard” will squeeze out Broadcast Radio as the auto manufacturers start to charge the pure plays and satellite music services for the beach front property of the in-dash of the future and freeze out the AM/FM band as an option for tomorrow’s motorists. And on and on it goes. What a bunch of DERP!

Reason #22 why AM/FM Radio will always be on your dashboards: 88% of all those surveyed insisted that AM/FM Radio is a “must have” when shopping for a new car or truck. These potential car buyers are curious about Internet Radio but NOT as a replacement for Broadcast Radio. Auto manufacturers: Please take note of what your customers really want to listen to the most in your cars and trucks!

Rather than share its audience and welcome legitimate audio competition as Radio has always done for decades, the DERP wants to “negative sell” its way to some warped sense of destiny or predictions of the future. And all at Broadcast Radio’s expense. We get it. When you are reaching for legitimacy, you want to compare yourself to something that already is. That must be the reason they are all calling themselves RADIO at every chance.

The really good news for Broadcast Radio is the DERP keeps getting it wrong…again.

In Southern California, Broadcast Radio remains as rock solid as ever. Please read that sentence again for your own peace of mind. And now, a few shots of DERP repellant for everyone’s use:

  • Total revenue for the month of June 2015 was up 1.1% from June 2014. That’s right, up! (Source: Miller Kaplan Arase LLP, Total Market Revenue, June 2015 vs. 2014)
  • Radio’s loyal listening base is unchanged despite all this pure play competition. Our Jan-June 2014 average weekly cume was 10.5 million and for the same period in 2015 it is unchanged at 10.5 million.  (Source: Nielsen Audio, Monday-Sunday, 5:00AM-5:00AM, LA Metro, 12+)
  • Our listeners also spent more time with Radio as average weekly time exposed grew from 10 hours to 10 hours and 15 minutes over the same Jan-Jun time period YTD.  (Source: Nielsen Audio, Monday-Sunday, 5:00AM-5:00AM, LA Metro, 12+)
  • Advertisers keep coming to Radio for brand awareness and market share. In the first 5 months of 2015, 380 new advertisers have discovered the power of Los Angeles Radio by investing $22,298,890. Over $22 million in 5 months! This is a remarkable sign of confidence in Broadcast Radio and this is only one market, albeit, the biggest revenue market in the United States.  (Source: Miller Kaplan Arase LLP, X-ray, January – May 2015)

Need more DERP repellent? Let’s follow the money by advertiser category.

  • Home furnishings and Floor Covers felt right at home with Radio as this category moved up by 0% through May YTD.
  • Drug stores/Pharmaceuticals gave healthy doses of Radio to their advertising budgets and grew their Radio advertising by a whopping 4% YTD through May.
  • Real Estate/Retirement Communities must see huge benefits to Radio advertising as this gigantic category increased its spending in Radio by 3% in May YTD.

And there are more DERP Busters to look at by category from May 2015 YTD:

  • Financial Services grew by 4%
  • Healthcare grew by 6%
  • Restaurants grew by 0%
  • Department/Discount Stores/Shopping Centers grew by 5%
  • Auto part/Service grew by 9%
  • Lawn and Garden grew by 8%

May is the latest category information we have as of this writing. However, it’s safe to assume these categories will only go up as the summer season, Radio’s biggest months, will only see these categories and more grow even larger on a YTD basis. More to come on that.

We can’t hear you DERP; did you say Broadcast Radio is in trouble? Please offer any facts now… as we can’t find any, like in NONE.

We could go on and on but you should get the picture by now. We can only assume these clients read and heard the same DERP as well but ignored it as the growth of their business is more important to them that the digital bad mouthing given to Broadcast Radio by anyone connected to the digital space.

Reason #86 to invest in Broadcast Radio. All of these categories increased their spending YTD for one simple reason. Radio works for them in so many ways; whether it’s the endorsements, LIVE remotes, NTR events, concerts, album parties, sports sponsorships, news sponsorships, reach, frequency, loyalty of our listeners, or the 1,000 ways Radio touches our lives every day.  Can any pure play do that?

Please, just say NO to DERP. The facts will always set you, and Radio free.

Broadcast Radio is alive and well, and as important, it keeps growing in spite of so much fragmentation or maybe it’s thriving because of all this audio competition from all of the numerous internet pure plays, satellite music, and anything else calling itself Radio but that is not. When consumers get to choose their listening platforms, they always come back to Radio.

As a listener, once you get hooked on LIVE Broadcast Radio, and all it does to entertain us, inform us, confide in us, keep us safe, keep us company, and most of all, keep us connected and involved with our community, as we listen to talent we know and we can trust…

How can any playlist compete with that?

Push back on DERP. Radio and our clients will be stronger for it.

Radio’s Resiliency

If we look at the last two years of the blind media coverage given to the pure plays, Wall Street’s infatuation with all things digital, and an irrational and costly rush by advertisers to social media and digital platforms, (ROI anyone?) you would think that Broadcast Radio was losing listeners, and perhaps its nine decades of absolute reinvention and resiliency.

We are told the media landscape today is a fractured, highly selective, and uber targeted environment and with so many consumer choices and distractions that have sprung up (or at least that’s what we have been told) over the past two years that directly compete with Radio’s listeners and their attention, you’d bet good money that Broadcast Radio was…on the ropes or at the very least, declining.

The problem here is that none of that is true. 

Continue reading

Brave New World for Radio

The year is 2015 and it is the time of Radio’s rebirth. The crushing reality that digital, the pure plays, and traditional, appointment TV had not delivered the market share or brand awareness that so many predicted only a few years back, has finally dawned on the accountants, manufacturers, media experts, bloggers, and various agencies who were the vocal proponent of almost any media except Broadcast Radio.

It is also the dawn of sophisticated consumer research coupled with actual purchases and filtered through the prism of an impartial ROI media analysis. The term ROI became synonymous with Radio as case study after case study proved decisively how powerful and cost effective Radio truly was, and always had been. Years of reducing Radio to single digit media budgets had ended as Radio finally took its place as a full partner at the media table of advertising campaigns across the country.

Advertisers faced brutal competition on all fronts and an ever mobile and restless customer base that clearly listened to local Radio; and so advertisers learned they could no longer invest in the “shiny new objects” or a promised revenue return that could not be substantiated or proven over time. They abandoned the various “new best things” in favor of the documented power of Broadcast Radio, and in all its forms and devices from which it was constantly airing content 24/7.

It is also the time of actual Radio listener growth. Despite all the competition from so many platforms and so many entertainment and information options, Radio listening continued to grow. Its universal human appeal could not be stopped or even slowed from the massive marketing assaults of Sirius/XM, Pandora, the In-Dash media options, and all of the other Internet pure play music services, which now numbered about 10.  Continue reading

Kia Motors America Shifts Gears in Radio’s Favor

Kia Motors America wants to cut its hefty dependence on third-party shopping sites for online sales leads and we applaud this strategy 100%. Kia’s goal is to bring more quality leads to their dealers by directing prospects to kia.com and not buy and sell “leads” to their dealers from third party sites such as autotrader.com, cars.com, and autobytel.com, to name just a few.

The problem, which is industry wide, is that these third party sites do not offer the quality leads that dealers need to convert to a sale. The current internet definition of an auto internet lead is anyone breathing who has filled in their contact information. The second issue is one of price expectations. These third party sites boast about lower dealer prices if one registers with them.

So, what is the Kia dealer getting when it buys third party leads from these and other auto aggregating sites?

Unqualified leads and prospects who have an expectation of a lower price since, after all, this is the internet and these sites promote lower dealer prices. Not only are the leads that Kia dealers are buying unqualified, the prospect is expecting low, low prices and begins the discussion with “What deal are you offering me?”  Continue reading

A Responsibility to the Truth

It seems that digital advertising has consumed the thought process and the budgets of so many advertisers and their agencies these days. Spending on digital advertising, which includes social media, search engines, websites, and mobile devices, is expected to rise 17% to $50 billion in the U.S. in 2014. That’s 28% of all U.S. Ad spending this year. In fact, one major client we know is being forced by its manufacturer to spend 25% of their annual budget in digital advertising. The stampede to participate in digital advertising and throw serious money at anything labeled “digital” has somehow ignored a critical basic question; who is this audience they are trying to reach and does it really exist?

The rush to be attached someway or somehow to the Internet because the “experts” have told our clients to has somehow suspended our collective responsibility to understanding the truth about web traffic and the disturbing and downright dishonest use of who and what is on the web and why.

And why should Radio Care about this? Well for openers, your client’s total budget, which includes Radio, has been on average, reduced in 2014 by at least 25%.

Do I have your attention now?  Continue reading