Audio Delivers Big Results For Both Consumers and Advertisers

Audio in its many platforms has become a beguiling alternative for both consumers and advertisers compared to television and social media.

For consumers, the idea of “radio” has taken on new meaning. It is no longer an analogue, old timey sound box. Now it offers a range of new platforms that provide a myriad of fascinating content from transportive AM/FM to self-select and recommendation engine content, to podcasts to audio books to information provided by smart speakers.

For marketers, the cost of television advertising defies gravity with increasing prices for inventory despite a shrinking and fragmented audience. CPMs for social media have also risen with diminishing results. In a marketplace riven with rising costs and diminishing returns, advertisers are finding that audio delivers the consumers they want in an immersive environment with cost effective options. Notably, these consumers are much younger than television whose average age is 57 years compared to 49 for radio.

A recent study by iHeart revealed that consumers currently spend about a third (31%) of their media time with audio. But, despite the fact that ad-supported radio drives scale, advertising dollars have yet to match this amount of usage. With radio, the ability to add incremental reach with lower cost should be extremely appealing.

With more data available through various and new platforms as well as the increasing use of machine learning to normalize and structure the data, audio offers a heightened ability to target cross-platform. Audio creative has also taken giant leaps in quality, efficiency and prove-ability compared to video. Currently, audio is as measureable as digital and TV and offers measurement solutions for every KPI and channel. Further, being able to target while knowing that consumer privacy is maintained (unlike in social media) offers an additional comfort level for marketers.

Talent plays a big role in the trust and influence of audio ads. Seventy-seven percent of listeners trust the information they receive from radio personalities which makes radio two times as trusted as social media. When it comes to overall impact, radio proves to be the most influential at the point of purchase compared to other media, with AM/FM radio accounting for 49% of visits to stores within a half hour of exposure to messaging. The second highest media was Live TV at 26% and, interestingly, outdoor ranked 5^th at 13%. Overall, 75% of measured consumers indicate that radio is the last media contact they have before shopping.

When it comes to iHeart specifically, their ability to reach a mass market audience age 6+ compared to television and social media is unsurpassed, according to Nielsen and Comscore. And, in a special Tik Tok case study using radio to drive new audience growth, iHeart, specifically, out-performs other audio companies in attracting adults 18+. Overall the company reaches 90% of Americans with both national and local presence. Its strength is proving successful among marketers with increasing spend topping $4 billion, dwarfing other audio options.

So in a media world of increasing content and platform choice, technological advancements, a call for privacy that still offers the ability to target effectively, there is no better choice than audio for both consumers and marketers. Radio delivers on all levels.

This article first appeared in www.MediaVillage.com

Artwork by Charlene Weisler

Busting the Demo Logjam: A+E Provides Fresh Ways to Reach Valuable Audiences. An Interview with A+E’s Pam Gibbons

We know the industry’s open secret - The standard demo breaks of 18-49 and 25-54 are hopelessly out of date and don’t reflect the true value of today’s consumers and their buying power. The industry has been slow to change … until now. 

 For the past couple of years, A+E Networks has been quietly working with agencies to integrate broader demographic breaks within traditional linear deals, packaged with digital and social wherever it made sense.

A Much Needed Demographic Transition

For Pam Gibbons, Senior Vice President Advertising Sales, A+E Networks, this transition is a much needed correction to an evolving media market. “The migration into the different TV platforms has gotten more dramatic and it became more obvious that traditional breaks of 18-49 and 25-54 just don't make sense when you look at the median age of the cable viewer,” she stated.  To that end, an effort was made, as she explained, “To think ahead and keep our business in a healthier place. We realized something really significant needs to change to keep things moving forward.”

Gibbons and her team implemented a focused strategy to, “Go to the marketplace and do business differently to capitalize on the total audience. We started conversations with agencies and clients, bringing research to them, showing the audience migration and also stressing the value of the older audience.”

Arguably one of the last prejudices in media is the 55+ cohort. It is high time to reevaluate this incredibly important consumer group. “Fifty plus audience is not what it was 20 to 25 years ago,” Gibbons noted, “It is not just how big of a part of society 55+ is, but how much money they're spending and how people are working longer. The old way of thinking about 55+ who is set in their ways and only wants to buy the same brands that they always been, is just not the case. Research proves this out.” Armed with compelling data, Gibbons and her team sprang into action. “We started having conversations way ahead of actual marketplace negotiations. There were a lot of obstacles. Some adapted to it quicker than others but we certainly had great success.”

Advertiser Solutions That Change the Landscape

Gibbons’ approach to the marketplace offered several solutions. “Our philosophy was to bring to light who you're reaching and in which places. Research shows the migration of the younger viewers to TV everywhere platforms,” she stated and added, “We also talked about solutions. We've been developing a Weekend Originals block that we brought to clients to reach audiences with different original content,  getting away from the traditional mindset of originals only being on in Prime. Our Weekend of original programming was sold to our clients at no premium pricing.”

In addition to this, “We are also in the marketplace in a pretty big way with audience targeting solutions,” especially for those clients who pushed back on targeting older demographics, whether because of the ad category or product. “These are all different solutions that we brought to market, that was part of our success. It wasn't something that we forced on people. We see benefits on both sides of the table recognizing the value of linear TV and all these different buckets. There are all these ways that we can help your clients get what they need by getting away from the traditional ways of doing it like just on 18-49 and 25-54,” she explained.

Advertiser Response and Next Steps

Working with advertisers to craft the most effective way of reaching their consumers has proven very successful for A+E Networks. “The response was pretty great in this upfront marketplace. We closed eighty advertisers who moved towards the 55+ demo and I want to say that close to half of our upfront revenue is now on these breaks. We really had tremendous success. But we also have some work to do. The conversation that is ongoing as we move into the ‘22 planning cycle. We've already had several meetings, which is hard to believe. It seems like the upfront season never ends anymore.”

She also believes that the tide is turning for the expansion of audience demographic breaks. “We made some really significant gains. We've all been talking about the change of our industry for so long and I really think that it's really happening now,” she concluded.

This article first appeared in www.MediaVillage.com

 Artwork by Charlene Weisler

 

Pandora's Insider's Guide to Digital Audio Drives Growth for Local Businesses

There is something compelling about audio. It commands attention, offering an intimate experience to the listener in an uncluttered environment. For Liz Lacey, vice president of sales marketing for Pandora, audio works especially well for all sizes of advertisers from small to medium to large. 

"Small and medium size businesses often don't think of audio," she noted, "They immediately go to search and social. They think audio is hard. They don't really know where to start. Our goal is to make audio accessible, give them the tools that they need and make them feel confident that they can incorporate an audio strategy to complement their social and search campaigns."

Pandora's Insider's Guide to Digital Audio for Local Business

To that end, Pandora has created a local advertising eBook, which, Lacey explained, "talks about the advantages that audio can bring to the table: an uncluttered environment, ads that are served one at a time and adjacency to brand safe content. It also talks about the differences against other tools such as social, search and even broadcast radio." The book is part of a larger strategy by Pandora and serves as an evergreen marketing material for digital audio and internet radio for local businesses.

In short, Pandora offers advertisers, "audio ads at scale, tapping into the power of Pandora's logged-in user base which reaches 150 million users with the flexibility to target however you need to. Streaming audio's flexibility, intimate storytelling ability, and targetability takes center stage for business looking to reach local audiences efficiently. In today's challenging times, small and local businesses need to be able to adjust their messaging based on the changing dynamics of their local market. With streaming audio, local advertisers can easily swap out audio ads working with Pandora and our Studio Resonate creative team."

Impact of the Pandemic

The impact of the pandemic especially on small businesses has been profound. According to Lacey, "In March we saw many advertisers, not only small and medium businesses, put a pause on their campaigns. But we did see that audio—because of its ability to be more agile and cost less to produce versus a TV spot—come back pretty quickly in the second quarter. We spent a lot of time this year educating businesses both large and small about how streaming audio can be an effective solution to engage their customers by adjusting their media and messaging strategies to meet the mindset and behavior of the consumer in their current state."

Research has backed up all of these efforts through the use of Soundboard, Pandora's 75,000 listener panel of users who have opted in to allow Pandora to poll their insights and behaviors. "Starting in March, we launched a multiple wave study to understand how our listeners feel and what they want from brands, what is working and not working and used that as an opportunity to talk to our advertisers to guide them on how they can use audio," she explained and added that there has been growth for advertisers using audio during the pandemic because of the medium's agility, flexibility and efficiency.

Digital Audio Advertising Components

Perhaps one of the most innovative aspects of Pandora's data gathering is the ability to personalize at scale. "When we use our dynamic ad product which allows us to use different data signals to personalize a message based on different scenarios, we can build many different iterations to support a single creative idea," she stated. It starts with understanding the consumer, and Pandora's ability to reach these audiences at scale. "We collect billions of data points daily on our listeners—whether brand's want to bring their own first party data to append to Pandora's massive data set or use Pandora's robust first party data for turnkey targeting solutions, advertisers can reach the right consumer, in the right environment, and in the right mindset and mood (of the listener)."

A billion data points begs the question, what data is collected and what metrics are used to measure? When users register on Pandora their behaviors are bucketed into three categories—declared, observed, and inferred audience data. Declared are attributes such as email, age, gender, and zip code. Observed is learning based on the user's interactions with the interface, including stations, songs, artists, genres, or music engagements (i.e., thumbs, skips, replays, etc.) Lastly, inferred data is what's inferred about the user based on their technographic (device), geo data, and behavioral (i.e., ethnicity, HHI, political leanings, parents, students, etc.) "We can then offer advertisers 2,000+ pre-set audiences that are already developed based on all of the data we ingest and analyze," Lacey stated. With metrics and measurement, "We do everything from website pixel tracking to measure lower funnel direct response metrics such as site traffic and conversion," she noted, to "branding and awareness. We are leading the charge in the industry around audibility, working closely with Moat by Oracle Data Cloud, our first party measurement partner, to test Audibility measurement and reporting aligned to the 2-second MRC standard. Pandora has been investing in research with one main goal in mind: create holistic audio measurement capabilities to help advertisers better analyze the effectiveness of the audible impression."

Pandora boasts something called Intelligent Ad Delivery which is "an ad delivery system that allows us to know when it is best to serve an ad in the right moment by taking into account an individual listener's behavior with the platform." Additionally, Ad load is relatively uncluttered compared to terrestrial radio with only one to two messages per pod compared to as much as a block of eight ads.

The Value of Digital Audio

"Audio is interesting because it reaches audiences that are not necessarily consuming traditional media, which is our position when we talk to advertising partners who might be going heavy into television and AM/FM broadcast radio," she explained, "If you are trying to reach a younger audience you need streaming audio as a supplement to achieve that audience reach." And when it comes to advertisers who rely on social and search, digital audio adds amplification of the message. "You can grow awareness, increase consideration and boost results," she concluded.

Click here to download The Insider's Guide to Digital Audio for Local Business.

 

This article first appeared in www.MediaVillage.com

 

Automated Ad Sales: Past, Present, and Future

Automated ad sales have been around longer than some might think. The first central ad server was actually introduced in 1995 for online advertising, according to Clearcode.

Over the course of the past few years, media companies have realized the value of automated ad sales beyond digital, and it’s currently expanding into a range of platforms.

Early Days of Advertising

Ad buying started as human to human interaction. Research departments would track performance trends and create estimates for sales. Agency planners would find the best fit for their client’s target consumer. Then, agency buyers and media sellers would meet to negotiate price, delivery expectations, and contract guarantees that would be executed over the broadcast or calendar year.

Transitioning to Automated Advertising

With the rollout of the internet and digital platforms came the ability to more easily capture data at various points in the consumer experience. More data-driven systems entered the marketplace and, as a result, merged the planning and buying processes. Digital, with its real-time capabilities, enabled a seamless planning to execution process, with buys electronically moving from the spreadsheet or database to ad server.

For those with a deep history in media sales like Arlene Manos, president emeritus of advertising sales at AMC Networks, data has been the game-changer.

In an interview with Manos, she noted that “Selling is now more applicable to specialized projects, which go beyond running a straight ad, such as sponsorship of events and integrated marketing.”
Direct response sales departments, in particular, aren’t needed if proper automation is in place. Sales digitization through automated advertising enables sales executives to forgo the elemental aspects of sales and apply their talents more strategically.

The Television Marketplace

Today, digital supply and demand marketplaces streamline processes by instantaneously calculating availability, negotiating price and CPM, delivering the units, and solving the problem of under-delivery closer to real-time. And, because the process removes human fallibility, there is also greater transparency and control for both buyer and seller, delivering greater value to both sides of the transaction.

But for some, the movement to a data-centric automated ad sales market has resulted in a stand-off. “Agencies, media companies, and independent tech companies are all building proprietary platforms,” said Hanna Gryncwajg, VP of enterprise accounts at TVSquared. Agencies believe they should have the process control because “they know their client’s marketing goals and needs” while media companies that have invested heavily in platforms and processes “don’t want to give up the ability to optimize their content, data, and platforms across their asset portfolio.”

The struggle for control is still being played out, but it’s clear that automated ad sales’ ability to streamline processes and provide transparency across the selling-buying ecosystem delivers value for content owners and distributors while also maximizing ad targetability. “Content is no longer king,” Gryncwajg asserted. “It is audiences that are king and finding an audience match that provides ROI to a marketer via automation always wins.”

This article first appeared on the Videa blog.

Credit Suisse: The Future of TV Advertising is Below-the-Line!

While there are financial analysts who are predicting a dark future for linear TV advertising spend, Omar Sheikh, US Media / Cable Analyst from Credit Suisse sees sunny skies. His company published a thematic report this week, outlining their long term view of global advertising and on a call, he outlined the report’s takeaways. 

TV is Poised for Greater Growth

Embarking on a full analysis of the future TV media market, Sheikh started with the question - What is the basis of competition between the advertising product offered by all of the media and technology platforms out there? “In the early 20^th Century it was reach,” he noted. “Then with the advent of TV it was engagement. And since the advent of internet advertising in 1995 it has become relevance,” as media becomes more able to target specific audiences.

With the advancement of technology like machine learning, the ability to target audience becomes even more precise. Because digital can make full use of this technology, the general consensus is that the growth of digital advertising is projected to be robust by taking share from other budgets. Does this come at the expense of linear TV? According to Sheikh, no, and this is where Credit Suisse deviates from the general financial wisdom. “Investors think that digital growth will inevitably come at the expense of the growth of TV,” he remarked, “We disagree with this view.”

While he projects that digital growth will continue to be strong with projections of +60% in the US by 2030, TV will also grow even if digital share doubles. “In fact we think that TV ad growth can accelerate from a 2% per annum we have seen over the last three years to 5-7% between now and 2030,” he shared.

Where will this growth come from? The spending on all media is about 45% of overall marketing spend. The other 55% is spent on below-the-line marketing like price promotion and sponsorship.  Sheikh believes that advertisers can shift their investment from below-the-line to fund growth in digital and other media. And with continued innovation in the TV market, it will become easier and more precise to target the relevant consumer via dynamic ad insertion and linear TV. “Both are moving TV into the sweet spot of ad target positioning,” he noted. And by combining reach with relevance, “the ability of the TV product to recapture market share is structurally improving,” he concluded, with targeted linear in particular fueling this growth.

OpenAP Will Help Facilitate TV Growth

Targeted linear TV advancements like the recently announced OpenAP will help pave the way towards the projected TV growth spurt. OpenAP, according to Sheikh, “gives advertisers a gateway to advertising on linear television” by enabling advertisers and networks to use data to more narrowly target subsets of relevant consumers in individual shows beyond the Nielsen data. “This will deliver a much more efficient linear ad feed, which reduces the waste in reaching people when the ad is not relevant,” he added.

Sheikh explained the process by an example of reaching truck buyers. Whereas previously the advertiser would purchase on age and demo across a selection of shows on a network, the ultimate conversion would be relatively low. “The same sales goal could be achieved by targeting a much smaller subset of potential truck buyers like current truck owners whose lease is about to expire,” he posited. The smaller subset of a highly targeted relevant group of consumers can lead to the same (or better) sales outcome.

Traditionally it was impossible to target such a small group, but now with the advancements of technology and the ability to combine first party (such as customer lists) and third party (such as lease expirations) combined with syndicated data (such as set top box or Nielsen), advertisers can buy more efficiently with less waste and networks can maximize the value of their inventory with higher CPMs and fewer makegoods.

“OpenAP enables an advertiser to standardize the definition of their audience across all of the networks of Fox, Turner and Viacom so they don’t have to go through the same process three times, enabling them to buy a guaranteed narrow target audience rather than a broad gender / age Nielsen guarantee,” he concluded. While, at this time, nothing approaches the highly focused narrow targeting of audiences of digital, this does enable advertisers to dramatically reduce waste.

Conclusion

For those investors who may be concerned with the future strength of media stocks, the advice from Credit Suisse is don’t be. Looking ahead to 2030, inventions like IoT, wearables and smart cars will make it increasingly easy to reach and target consumers. While this may hurt old time marketing like direct mail and telephone marketing, those ad dollars will flow to digital and … yes … TV. In fact, Sheikh believes that “TV advertising growth will accelerate.” So, as for me, I am sticking with my media stocks and envisioning a cushy retirement.

This article first appeared in www.MediaVillage.com

Looking Ahead at the On Screen Summit

We often hear from media industry executives that not only is change occurring in across the industry, the rate of change is accelerating. This year’s On Screen Media Summit which took place last week in New York parsed the areas of change across the on screen landscape both in and out of home. 

There are no sacred cows; all points of media are being impacted from retransmission, digital distribution, measurement, metrics, content recognition, addressable advertising, bundling and even a shifting of target consumer valuation. Where will it all lead? Here are a few opinions from the conference:

Increased Importance of Revised Measurement

Does the current C3 television measurement need to evolve? According to CBS’ Les Moonves, "The world is changing rapidly and this year is the tipping point.  The viewer can now get content in all sorts of different ways. …We need to expand measurement and need to get paid for all of it... We also need measurement beyond three days. We want to get paid properly.” But as cross platform distribution expands, the lack of a standardized platform agnostic measurement capability hampers the full valuation of content. John Pascarelli of Mediacom sees potential in creating applications on the set top box that can help in measurement.

Updating the Target Demo … Or Not?

Les Moonves questioned the continued use of 18-49 as a sales delivery target. “One of the greatest bullsh*t numbers is 18-49. Writers say ‘it is the only demo that advertisers care about’ but it is a lazy way to look at the world and it is giving advertisers adults 50 plus for free.” His opinion is that it is time that 50 year olds get recognized because they have more buying power than 18-49 year olds. His suggestion is to shift the target demo slightly upward to 25-54 and, citing the continued success of 60 Minutes, target different age groups for different shows. Taking a different view was GroupM’s Irwin Gotlieb who supports the 18-49 status quo. He spoke of the psychology of demographic targeting which he referred to an “aspirational age group” where a 12 year old aspires to be like a 17 year old and a 65 year old aspires to be a 40 year old. In this way, 18-49 captures the psychological essence of the viewer, no matter how old they chronologically are. 

Technology Rules

Tom Rogers of TIVO gave an update on the advancements of the TIVO box including an Over The Top integrated solution from any device in the home including iPads.  TIVO has also developed a program audience research data business compiling STB data that measures not only what they are watching for programs but also for commercials.  Jeremy Helfand from Adobe noted that the days of forgoing content delivery because it couldn't be monetized are over.  He credits dynamic ad insertion as one of the most significant technology developments today.

Content Continues to be King

Breaking Bad Executive Producer Mark Johnson spoke about the importance of scripted series in network brand development. Breaking Bad helped classic movie network, AMC, achieve greater recognition and industry cache. And great long form content such as feature films can be packaged in  ways that offer viewers greater choice. Susan Cartsonis of Storefront Pictures spoke of the flexibility of content delivery explaining how a film company can release their films in two ways  - by dividing the film into segments so commuters can view in shorter, smaller installments and also releasing it to theaters in its original, complete long form. Compelling quality content continues to be a pivotal component of success. Some things never change. But the way it is delivered to the consumer is evolving.

Consumers Are Driving Advancements and Creativity

As viewers can consumer video on many different platforms and both in and out of home, it is clear that, as Jeremy Helfand said, “The living-room-on-the-go is the new reality.” So how can we monetize these new platforms and add value to the viewing experience? Peter Low of EnSequence suggests that there are three ways to add value 1. Overlay content and create opportunities for advanced advertising, 2. Increase time spent viewing and 3. Create ratings with greater measurability and ROI.

Advanced Advertising is Coming into its Own

As the industry focuses more on advanced advertising, Frank Foster of Comcast Spotlight noted that there are four data sets used in advance advertising – identifiers,  transactional data, optimization components and the reporting capabilities. Comcast, he says, is rolling out advanced advertising in five cities based on their new audience-based technology. Irwin Gotlieb concludes that “TV will be far more effective once it is addressable…. It will reduce waste and increase effectiveness... And the potential revenue form addressable is astounding.”