Political Stars Align in Radio's Favor for Election Spending
Total Page：16
File Type：pdf, Size：1020Kb
Weekly News Recap June 4-8, 2018 Political Stars Align In Radio’s Favor For Election Spending. Political experts say radio has good the industry has a good shot at number of districts in play this year reason to be optimistic about 2018 capturing more political ad dollars will lift radio’s prospects. “We have campaign spending. Fundraising than it did during the last midterm a lot of states that are more rural in levels are up and the election elections four years ago. “With a lot nature and people know the best map is working in radio’s favor. of races that are closer to home, way to reach them is through radio,” And who votes during midterms maybe radio could do a little better he explained. “But even in urban also favors traditional media given the dynamics of how the areas, radio will be important for outlets. “There are so many open election works,” he said. reaching certain demographics as seats, open primaries and activity well. Radio is poised to have a really going on right now that it’s been The election map is working in solid political cycle.” an unprecedented political cycle radio’s favor in a way it didn’t two and from a spending perspective or four years ago. Not only is every Michael Meehan, a Democratic we are seeing people spending House member up for reelection but political strategist who is CEO at money in a variety of ways,” said so are 33 Senators. Squared Communications, agrees Brian Jones, a Republican political traditional broadcast radio and strategist who is a partner at Black Plus there are gubernatorial races television will see “significant spend” Rock Group. in 36 states, including many where this year in part because midterm there are no incumbents such as voters are disproportionally older. California, Florida, Ohio, Minnesota, But what will also work in radio’s Connecticut, Nevada, New Mexico favor is that political ads don’t clog and Idaho. Four years ago, the the radio airwaves as much as they governors’ races were responsible do on TV. “Candidates are going to for nearly a quarter of all political want to buy ads where people are ad spending and Kantar-CMAG listening and they’re not looking for estimates that could grow to 30% politics which is disruptive,” Meehan this cycle. predicts. “I’ve heard from some campaign Despite some high-profile races, folks that radio is worth taking a lot of the money in campaign another look when television gets advertising war chests remains so crowded,” Passwaiter said. unspent at this point in the cycle. So “The fact that radio tends to be experts say the best gauge of what less cluttered for ads makes it an sort of year it’ll be for radio is by Borrell Associates projects $8.8 interesting alternative platform to taking measure of how fundraising billion will be spent during the use when TV is oversold. And radio is going for candidates. “Fundraising current election cycle. That’s a offers reach.” is the key because most of the 6.3% jump over what was spent fundraising by the national parties during the last mid-term in 2014. Political Ad Dollars Begin Flowing will be spent on television, radio and And it projects radio will pocket No ad spending data has been digital communicating persuasion $564.3 million in election-related publicly released so far but messages or negative messages on ad spending in 2018. Passwaiter said Kantar-CMAG opponents,” Meehan said. data shows “healthy” amounts of Kantar Media’s Campaign Media money have been spent in states A general rule of thumb is that half Analysis Group (CMAG) estimates and districts where primaries have the money raised by a candidate 70% of political ad dollars will be already taken place. Of these Illinois goes to running the campaign— spent on television advertising has been the biggest, thanks to an the other half goes to advertising during the 2018 election cycle. open governor’s seat that’s shaping “There’s already more spending this What about radio? While it doesn’t up to be the most expensive this cycle than at this juncture in 2014,” release a radio-specific outlook cycle. Jones thinks that a larger Meehan said. VP/GM Steve Passwaiter thinks Page 1 Weekly News Recap June 4-8, 2018 Radio’s Streaming Ad Revenue To Hit $2.3 Billion By 2022. After three years of modest declines, over the air radio ad revenues are forecast to inch ahead in 2019, according PwC. But online audio advertising from traditional radio broadcast- ers will power the industry’s growth engine over the next five years. PwC says traditional radio advertising in the U.S. will total $15.90 billion this year, down a smidge from $15.91 million in 2017. The forecast calls for a slight increase to $15.92 billion in 2019, then $15.94 billion in 2020, $15.96 billion in 2021 and $15.99 billion in 2022. While the 2017-2022 over-the-air trend is for a meager compound annual growth rate of 0.10%, AM/FM radio’s digital streams are on track to grow by an annual rate of 7.8% over the same period. Here’s the streaming trend line for broadcast radio: $1.65 billion (2018), $1.79 billion (2019), $1.93 billion (2020), $2.07 billion (2021) Emerging From Chapter 11, Cumulus Turns Page On New and $2.20 billion (2020). See more HERE Chapter. Cumulus Media is brandishing more than just a redesigned 46% Of CMOs Rank Radio As An Effective Ad Channel. logo. The company has newfound financial freedom after Radio industry leaders have been working to better tell the emerging Monday from a sometimes grueling six months in medium’s story to big brand advertisers and a new study from bankruptcy court. Cumulus now has a new board of directors, Nielsen suggests they are making solid progress. Surveying new lenders, newly issued shares of stock and new ammuni- chief marketing officers about the importance and effective- tion and flexibility to continue on its turnaround path. As part ness of various media channels, Nielsen found 43% say radio of the court- approved restructuring, Cumulus has shed more is extremely, very or somewhat than $1 billion in debt, reducing its total debt from $2.34 billion important. Looked at another way, to $1.30 billion. The restructuring cancels all of the company’s roughly one in four (23%) ranked existing stock and issues roughly 20 million shares in the re- radio as either highly or extremely organized company. As it said from the get-go, 83.5% of the important, which is in line with equity goes to the former lenders and 16.5% to the general print (25%) and direct mail (25%) unsecured creditors, mostly made up of bondholders. Cumulus but ahead of out of home (20%). will briefly trade under the temporary ticker of “CMIA” on the Nielsen’s CMO Report 2018 notes over the counter Pink Sheets exchange. The company has an that radio continues to lead all application pending to relist its stock on the NASDAQ exchange channels in terms of weekly reach as “CMLS.” Cumulus says it will use its improved financial in the U.S. CMOs were also asked to rate the effectiveness of flexibility to continue the business transformation it launched media channels for their business with 46% finding broadcast more than two years ago, when Mary Berner replaced Lew radio to be an effective channel. Of that, 19% gave radio the Dickey as CEO in late 2015. See more HERE highest marks – 6% ranked it extremely effective and 13% very effective. Another 27% called radio somewhat effective. More Bankruptcy Exit Is Game-Changer Inside Cumulus, Too. than 51% of respondents ranked linear television as either While Cumulus Media’s exit from Chapter 11 helps remove a highly or extremely important, with 30% of respondents call- negative overhang for the radio industry, there is a feeling of ing TV “extremely important.” Among digital media channels, rejuvenation inside the organization as well. “This is a good 79% of respondents ranked search as “very” or “extremely” story for Cumulus and a positive story for radio,” says Brian important, while 73% thought the same about social media. Thomas, Cumulus Country Corporate PD and PD of country See more HERE “Kicks 101.5” WKHX Atlanta. Now, “getting the success of our local story and national ratings turnaround in key markets Translators Are Price Cumulus Pays For Bankruptcy At to clients is critical,” says Louie Diaz, OM, Cumulus Atlanta The FCC. and PD of CHR “Q100” WWWQ Atlanta. Cumulus CEO Mary Cumulus Media is paying a price for effectively changing hands Berner conveyed the news flash to employees at 4:30pm to new owners as part of its Chapter 11 financial reorganiza- eastern Monday, via a live video appearance. In response, the tion. While Cumulus had previously announced it would part company’s FORCEBook intranet fostered dozens of thumbs with FMs in four markets to comply with local radio owner- up reactions. Executive VP of Content & Programming Mike ship limits, the biggest sacrifice McVay says the outpouring hasn’t been confined to just those it is making is giving up several within Cumulus. Programming heads from other radio compa- FM translators, including some nies were high-fiving McVay during a Monday evening Garth in big markets. That’s because Brooks listening party he attended in Nashville. And McVay under the FCC’s rules, a change says he was surprised at the amount of congratulatory emails of ownership after the short-form he received from his peers at other companies, along with air application deadline disqualifies a talent and people in the music business.