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800.275.2840 MORE NEWS» insideradio.com THE MOST TRUSTED NEWS IN RADIO TUESDAY, MAY 12, 2015 Ad insertion, native advertising become part of podcast playbook. With podcasting a new frontier for radio, new ways to monetize the fledgling medium have emerged that go well beyond direct response ads read by hosts. Ad insertion has entered the ring, along with native advertising. Targeting podcast ads based on behavioral data and demographics is becoming more prevalent. Using third party providers, CBS Radio, PodcastOne, audioBoom and other podcast players dynamically insert ads. CBS Radio stitches them into Play.it podcasts, whether the listener is streaming on demand or downloading the audio to their device. Here’s how it works: When there’s a call to the server for a specific podcast, it instantaneously sees what ads are available for that podcast or the demographic behavior purchased by the marketer. It then inserts the ads into the file before it’s downloaded or streamed. “We made the audio on demand business very marketer-friendly,” says CBS Local Digital Media president Ezra Kucharz. Data plays an increasingly important role. “There’s plenty of data, both digitally and through surveys, that can provide all the needed info to brand advertisers on who the audience is and their purchasing makeup,” PodcastOne founder Norm Pattiz says. Native advertising is becoming part of the playbook, too. At its SoundFront presentation, iHeart- Media’s pitch to marketers included inviting them to participate in the creative process for a new slate of podcasts. “We have some ideas, and we want to do it with your brands,” CMO Gayle Troberman said. Client-branded podcasts are a big push at CBS, too, which is working with several brand advertisers to launch podcasts of their own original content toward the end of second quarter. Podcasting transitions from direct response to brand advertising. When PodcastOne launched two year ago, 90% of its business was direct response ads. Audience deliveries were small. But engaged, loyal followings produced strong results and high CPMs. “The podcast audience is worth more for an advertiser because they had to perform a positive act to access the content,” PodcastOne founder Norm Pattiz says. The company’s national brand advertisers have surged from six to 46 during the past two years and it expects to end 2015 with a 50-50 ratio of direct response to brand advertisers. “National brands are starting to use the medium in much more effective ways,” Pattiz says. The company expects to bill $20 million this year, ten times what it booked when it launched two years ago. But despite the runaway success of NPR’s “Serial,” which amassed 80 million downloads, podcasting gets only a sliver of ad dollars. There is no precise tracking of its annual revenue with estimates ranging from as low as $34 million to as high as $60 million with potential to reach $100 million in the near-term. Podcasting’s ace in the hole is a loyal and engaged audience — users seek out and subscribe to specific shows on topics that interest them. Being able to demonstrate a deeper emotional attachment could lead to higher CPMs than your average music stream. “We’re in the early stage and everyone’s trying to assess value,” CBS Local Digital Media president Ezra Kucharz says. “A lot of brands like to associate themselves with passion plays and that’s what this is about.” A shift away from downloads to on-demand streaming. One-third of the country’s 12+ population has listened to a podcast, some 89 million people, according to Edison Research and Triton Digital. While the trend is one of solid growth, measuring how many people listened to a specific podcast after downloading it is one hurdle the industry will need to overcome to give marketers the metrics they’re accustomed to. Companies like RawVoice, Libsyn and Podtrac measure the number of podcast downloads but they aren’t able to convert them into audience impressions. PodcastOne uses Edison to survey its audience and then fuses that demographic and psychographic data with the raw downloads to convert them into impressions. It also tags spots to validate the number of impressions the commercial received at the time it was consumed or downloaded. The way Americans listen to podcasts is changing. There’s more consumption through on demand streaming than downloads, digital [email protected] | 800.275.2840 PG 1 NEWS insideradio.com TUESDAY, MAY 12, 2015 executives say. PodcastOne says 60% of its listeners stream its podcasts. As usage continues to shift away from downloads to streaming, podcast measurement is expected to improve. But even without precise measurement, the trend line is clear. PodcastOne programs are downloaded 140 million time a month and generate 100 million monthly impressions, according to the company. Listening to Play.it has increased more than 30% since it launched. CBS Local Digital Media president Ezra Kucharz sees nothing but blue sky ahead for the medium, thanks to consumers already trained to use services like Netflix and Hulu to access on demand video and platforms like Spotify and Rdio to access music on demand. “You’re training consumers to access content when they want it,” he says. “Now it’s spoken word’s turn.” Radio’s share of local auto dollars to remain above 10%: report. The average auto dealer will spend more than $640,000 on local advertising this year, according to a new report from BIA/Kelsey. Combined with what the carmakers will spend in the local market, it projects $11.3 billion will be spent on local media across all automotive sectors — or more than one out every 10 dollars spent in local advertising. While more dollars are shifting to digital and mobile, the vast majority of automotive ad budgets are earmarked for traditional media. BIA/Kelsey forecasts 77% will go to tried-and-true advertising outlets this year. Radio’s share is estimated at 11.6% for 2015, slipping a point to 10.6% by 2019. “Radio is still an important part of an advertising mix and even as the average quarter hour numbers decrease a little bit, radio still reaches a very sizable portion of Americans,” BIA/Kelsey chief economist Mark Fratrik says. “If you have a local auto dealer with a 72 hour sale this weekend they can be pretty sure he can reach a larger number of people if he does an advertising buy across the top three to five radio stations.” Online radio remains a bit player. The report pegs its share at 0.6% this year, forecasting it to inch up slightly to 0.8% by 2019. That’s in contrast to the rest of digital ad spending, which is forecast to grow 12% a year over the next five years. As a result, BIA/Kelsey estimates 30% of all local auto ad dollars will go toward digital by 2019 compared to 12% today. “Broadcasters can play in this game in a big way by showing that multimedia campaigns are complementary and better than just going straight TV, radio or online,” Fratrik says. Why radio is different from newspapers for car dealers. Over the next five years local newspapers are projected to lose a third of their auto-related advertising dollars. BIA/Kelsey forecasts their current share will fall below radio, shrinking to 9.9%, down from their current 14.7%. “There’s an interesting contrast,” BIA/Kelsey’s Mark Fratrik says. “Newspapers will not maintain their share like radio and TV because they play a different type of role.” More consumers are heading to the internet to gather information for their car buying research, which he believes has supplanted the role of the local newspaper for car dealers. “TV is an image with beautiful women and good looking guys driving fancy cars, and radio is a complement to that by providing information about local dealers and sales,” Fratrik says. “I think that has a lot to do with the advertising mix.” That’s backed up by National Auto Dealers Association data which shows local dealers boosted radio spending 14.5% in 2014 to $1.16 billion. As more is spent on digital, the analysis points to most of the new dollars flowing into mobile advertising which Fratrik expects will resemble TV strategies with mobile video dominating. The BIA/Kelsey report — the latest in its series on various advertising verticals — also points out there’s more to the overall auto ad sector than just car dealers. There are also auto parts stores, tire dealers, and motorcycle and RV dealers. Not to mention gas stations, which AdMall estimates spent an average of $29,000 per location on local advertising last year. Ratings war report: L.A. hip-hop battle tightens. The gap between the two rivals in hip-hop’s biggest battle since 2Pac versus Biggie has narrowed slightly. Emmis’s incumbent “Power 106” KPWR, Los Angeles didn’t reclaim the 18-34 market share it lost in March to iHeartMedia upstart “Real 92.3” KRRL. In fact, its 18-34 number slipped 5.0-4.7 to remain in fifth place. But challenger KRRL wasn’t able to maintain the 6.3 share it achieved in April, sliding to a 5.7 in April, just a full share ahead of “Power.” After having second place in the crucial demo all to itself in March, KRRL shared second place with hot [email protected] | 800.275.2840 PG 2 NEWS insideradio.com TUESDAY, MAY 12, 2015 AC sister “104.3 My FM” KBIG in April — each had a 5.7. The skirmish hasn’t put a crimp on CHR sister KIIS-FM (102.7) which continues to reign supreme in the 18-34 demo, this time with an 8.6, almost three shares ahead of its sister stations.