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TUESDAY, MARCH 10, 2015

Radio’s still testing new spotload strategies. A growing number of stations are launching with low spotloads and vowing to stick with them as a long-term point of differentiation. The trend is most apparent for brands targeting younger demos accustomed to low-inventory online alternatives. Operators are optimistic the lighter loads will help drive time spent listening and translate into a better value proposition for advertisers. Emmis launched CHR “Now 96-3” KNOU, St. Louis on Super Bowl weekend with a promise of “60 minutes commercial-free every time we start the music.” That involves an average seven minutes of commercials per hour clustered into one stop-set, significantly lower than its direct competitor. Emmis plans to stick with the lower inventory for the long haul. “We have a hard cap which we won’t violate,” Emmis president of programming Rick Cummings says, adding that the station launched “fairly close to full” in terms of client demand. Entercom, which cut spotloads in half last summer at Seattle “The End” KNDD, is trying a similar approach in a second market. Country “94.1 The Wolf” WLFP, Memphis prides itself on playing “half as many commercials as the other guys.” More than five months after bowing, “The Wolf” has stuck with a ceiling of six-minutes per hour, divided across two breaks. In Fresno, One Putt Broadcasting last week signed on classic hip-hop KJZN (105.5) with four 2-minute breaks an hour and a pledge of 14 songs per hour. Sister station “Jewel FM” KJWL (99.3) promises “55 minutes of great music every hour” with one spot per break. How committed is One Putt to the low inventory celling? “Over my dead body will those spotloads ever increase,” co-owner John Ostlund says. The pros and cons of lower ad loads. Proponents of lower ad loads are banking on a payoff that goes beyond improved ratings. They believe advertisers will pay a premium for delivering their message in a less cluttered environment. While it’s too early to quantify, Emmis president of programming Rick Cumming says anecdotal listener reaction to CHR “Now 96-3” KNOU, St. Louis suggest they’re sitting through the seven-minute stopset. “If people are willing to stay and consume their messages, then that’s a true benefit for those who use our new brand to advertise,” Cummings says. Entercom-Seattle and One Putt-Fresno hope to create higher demand and drive ad rates up by lowering the supply and increasing an advertiser’s “share of voice.” But after buying three Fresno stations from Wilks Broadcasting in January, One Putt had to inform clients their rates were going up, which cost it some business. Co-owner John Ostlund says the “vast majority” of clients understand the strategy. “They do see the value,” he says, “but that’s not to say every client thought it was a good idea to raise the rates.” In making presentations to clients before launching Fresno’s “Jewel FM” KJWL last year, account execs asked clients what it would be worth to have the only spot in a break. “It was shocking what advertisers told us,” Ostlund recounts. “They said it would be worth significantly more than we ultimately started charging.” While not everyone converted to the new business model, he claims a vast majority of clients agreed to pay 50%-100% rate increases in exchange for being the only spot in a break. But having less inventory to sell, limits a station’s revenue potential and Ostlund concedes that such a strategy may result in “a more modest bottom line.” Quality of ad creative seen as important as quantity. As Alpha Media has grown from bit player to a group of about 90 stations, it has worked to rein in spotloads at newly acquired station clusters, some of which had no limits in place. The goal, according to EVP of programming Scott Mahalick, is to run one minute or one unit less than the competition — to drive demand and improve its market position. That has involved caps of eight minutes at classic hip-hop “Old School 105.1” WGHL, Louisville; CHR “Y100” WXYY, Savannah; and country “96.7 The Bull” WGBL Gulfport, MS, among others. But advertising is, after all, radio’s lifeblood, and so Alpha has put a greater focus on improving the quality of its creative than just lopping off

[email protected] | 800.275.2840 PG 1 NEWS insideradio.com TUESDAY, MARCH 10, 2015 units. The company launched the Voodoo Awards to reward stations for what Mahalick calls “mesmerizing creative.” Audio clips of the campaigns are posted on the company’s intranet for sister stations to use. Better creative increases a station’s chances of getting the audience to stick around through stopsets and having that message be effective for the advertiser, he says, regardless of the number of units. “It takes a concentrated effort and a deliberate focus to make that happen,” Mahalick points out. The goal, he says, is to get listeners about 25 seconds into the spot before they realize it’s an ad. For instance, a campaign for the CW Networks fall season was integrated into a $1,000 Minute contest where contestants had to answer 10 questions correctly in one minute to win the cash. “It was really an endorsement ad for CW,” Mahalick says. “But if you listened to it you had no idea.” Take the Inside Radio Reader’s Poll on spotloads. To improve the environment for both listeners and advertisers, some radio stations are taking steps to reduce the quantity of commercials they broadcast. Inside Radio is conducting a Readers’ Poll on broadcast radio spotloads. Click HERE to take the survey. Study: Online ad loads less than a third of broadcast radio. While some broadcast radio operators experiment with ways to rein in overstuffed spotloads, a study of pureplay webcasters shows their average online radio ad load to be just 2.69 minutes per hour. That’s less than a third of what the average broadcast radio station airs. Conducted by ad tech company Xappmedia, the study examined commercial loads of four pureplays from November through January. It didn’t include any broadcast streamers. With the vast majority of ads served consisting of :30s, the average number of units per hour on the streaming services was 6.45. But like broadcast radio, different webcasters employ different ad deployment strategies. Of the four services studied, one aired mostly 15-second ads for an average of 9.74 units per hour while another averaged just 4.34 ad units an hour. Overall, :30s accounted for 77% of ads served. By comparison, the average radio station in PPM markets aired about nine minutes of commercials an hour, according to a 2011 study by Coleman, Media Monitors and Arbitron. The Xapp report introduces what may be a new metric to radio broadcasters: Time to First Ad or TTFA. Because pureplay streaming is a one- to-one experience, publishers can control how much music or content a listener is served after launching a station before the first ad is served. The study shows the average TTFA was 11 minutes from the start of the listening session, with a variance among services of only two minutes plus or minus the average. “Each of the services has determined that getting 2-4 songs in before an advertisement is optimal for balancing between listener experience and economic necessity,” the study concludes. Broadcast radio and web pureplays share a lot of advertisers. Seven of the top 10 broadcast radio advertisers from 2014’s first two quarters, as reported by the Radio Advertising Bureau, were among the accounts identified by Xappmedia in a new study of advertising on online radio pureplays. Five of radio’s top 10 spenders from the third quarter are also on the list. “There is little doubt that internet radio and broadcast radio are competing for ad dollars and relevance with top audio advertisers,” the report concludes. The study of four pureplay services shows the impact of seasonality on streaming ad loads with a rise between November and December followed by a January fall, reaffirming online radio as an ad platform used by retailers during a critical shopping season. November yielded an ad load of 2.77 minutes per hour, which climbed to 2.84 in December and fell to 2.47 in January. There was even greater variance in the number of advertisers across the survey period. November’s 29 advertisers on the four services nearly doubled to 57 in December before falling back to 44 in January. The number of active accounts varied from service to service. On one there were over 50 distinct advertisers identified while the other three averaged only 22 unique advertisers during the period. In all, 101 different advertisers were identified. The average online radio advertiser bought only one deep. The vast majority of advertisers, 87%, appeared on only one of the services while 10% were identified on two services and 4% on three. No advertiser was on all four services. Entercom says DOJ ‘wrong’ and presses forward with LFM deal. The Justice Department has stalled Entercom’s proposed $105 million deal to buy Lincoln Financial Media, but CEO David Field is confident the sale will close. The only

[email protected] | 800.275.2840 PG 2 NEWS insideradio.com TUESDAY, MARCH 10, 2015 question is how many LFM stations in Denver are along for the ride. “I don’t see the deal getting upended,” Field said yesterday at the Deutsche Bank Media Conference in Palm Beach, FL. “I think the debate is over how many stations we can keep in Denver.” To meet the FCC ownership caps, the math is pretty simple: Entercom would need to spin-off a single FM. The company has already said it plans to put “ 104.3 The Fan” KKFN into a trust until a buyer’s found. But the DOJ may push Entercom to sell more. Field says the two companies’ combined 32% share of the Denver ad market is smaller than iHeartMedia’s 40% share, according to Miller Kaplan. And when you consider that radio has a 7% share of the overall ad market, Field says that would mean its proposed Denver cluster would control 2% of the city’s ad market overall. “Your guess is as good as mine as to why the Justice Department sees an issue — we believe they are wrong,” he said. “We have been cooperating with them fully and we will continue to make our case and believe we will be vindicated.” Field said the 15 LFM stations are strong brands. While there’s some opportunity to increase revenue, he believes the major plus is they’ll be able to improve profit margins by becoming part of a radio pureplay. Client spending ‘uncertain,’ says ad giant WPP. The U.S. economy is growing at around 3% and corporations are sitting on billions in cash. But advertising conglomerate WPP says it doesn’t expect marketers to significantly increase their spending this year, even with their solid balance sheets and record profits. The parent of media buying shops such as GroupM, MEC, MediaCom and Mindshare says its client spending pattern looks “very similar” to 2014 with no big events like the Olympics or World Cup on the calendar to boost marketing investments. “Advertising should grow at least at a similar rate as GDP,” WPP tells shareholders, noting that rate of growth is “relatively depressed” compared to before the recession. “All in all, 2015 looks to be another demanding year,” WPP says. Field: Changing radio’s perception takes perseverance. “Radio is highly undervalued,” says Entercom CEO David Field, to a likely chorus of “amen” from the industry. But the tone is changing, albeit slowly, he says. “We’re making steady progress,” Field told the Deutsche Bank Media Conference. He credits work Nielsen has done with advertisers, including its return on investment study released last year. “If you want to change people’s perception of radio, show them that they’re getting better ROI with your media — and now we have landmark data that shows just that,” Field told the crowd of analysts. But he said to expect an overnight awakening on Madison Avenue isn’t realistic. “It’s a series of conversations and presentations — people’s perceptions take time to change.” Yet Field said talk has turned from whether radio has a future, to how the business is evolving, and more recently, to how it’s working better for advertisers than some of the newer options. “It’s gradual incremental progress that I’m seeing,” he said. Entravision says Piolin’s already impacting its bottom line. Local advertisers are rolling out the welcome mat for Eddie “Piolin” Sotelo, whose two-month old return to broadcast radio is helping drive growth at Entravision. “We’re getting an influx of local advertisers in front of the ratings,” CFO Chris Young told the Deutsche Bank Media Conference. “Once we put a couple of books together, the national advertisers will start to come in the second half the year.” The company credits Piolin’s show for helping its Los Angeles cluster post a 37% revenue increase during January. Under a long-term syndication agreement, Entravision makes up the largest station group for “El Show de Piolin” with 14 affiliates. It also handles ad sales for the show. Entravision says its radio division is pacing up high single digits in first quarter, and Young expects that trend line to continue throughout the first half. “It’s going to be a great year for radio for us,” Young said. Beyond Piolin, Young told the crowd of investors that the drop in gas prices may not have resulted in an overnight flood of advertising dollars. But he’s convinced it’s still on the way. “We’re now on the precipice of seeing that realized,” Young predicted. Tech companies join broadcast fight on ASCAP, BMI rate-setting. The National Association of Broadcasters is joining with four other digital and tech trade groups in pressuring Congress to leave in place current deals that dictate how ASCAP and BMI rates are set. The organizations say they welcome a review to ensure there’s still “healthy competition” but say they also “strongly oppose” any changes to the current rate-setting system. “These consent decrees are necessary for the fair and efficient licensing of musical works and should not be weakened,” they write in a joint letter to lawmakers. They point out it was because of federal antitrust concerns that the rules were set up decades ago in the first place to keep songwriters’ market

[email protected] | 800.275.2840 PG 3 NEWS insideradio.com TUESDAY, MARCH 10, 2015 power in check. Music publishing executives have said those are “obsolete” and “outdated” ideas, but the NAB and the other groups say songwriters still have the upper hand, pointing to four potential violations in the past year. “The consent decrees are more important now than ever before to stop anticompetitive behavior,” they argue. The letter comes as the Senate Antitrust Subcommittee will dive into how songwriter royalty rates are set in a hearing today. In addition to the NAB, the Consumer Electronics Association, the Computer and Communications Industry Association, the Digital Media Association, and the Internet Association all side with broadcasters. ASCAP is set to propose an expedited rate-setting process that will mean radio stations will less likely have to pay interim rates while lawyers fight it out in court. The issue has less to do with FM/AM radio however. Instead, ASCAP chief Elizabeth Matthews will tell Congress the sheer volume of webcasters who enter and exit the business has made the old way of setting rates too slow. UK inks 15-year deal with iHeartMedia. In what may be the biggest radio deal in college sports, the rights holder for the University of has signed an agreement locking in the Wildcats at iHeartMedia stations in Louisville, Lexington and through 2030. The JMI Sports deal covers men’s basketball and football games and women’s basketball and baseball games. UK gets flagships in Louisville (“NewsRadio 84” WHAS and “ 1080” WKJK); Lexington (“News Radio 630” WLAP, “Fox Sports 1580” WWTF and country “98.1 The Bull” WBUL-FM); and Cincinnati (“ESPN 1530” WCKY). All broadcasts will be produced at iHeartMedia’s Lexington studios and JMI Sports will manage all advertising sales. The new agreement also calls for the extension of pre-game shows for football and men’s basketball from 60 minutes to 90 minutes. And iHeartMedia stations will also air promotional messages for UK Athletics and the University of Kentucky throughout the year. The long-term agreement comes in the wake of a $210 million multimedia rights deal JMI signed last year with UK. “We knew from the beginning how important the relationship is between UK and its radio audience, which is why we made this agreement a priority from day one,” says JMI Sports CEO Erik Judson. WLAP has been UK’s station since 2000, and UK’s broadcasts have aired on WHAS in Louisville since 2004. CBS recruits Mennuto for branded content position. CBS Radio has recruited content marketing executive Tony Mennuto as VP of branded content solutions. He’ll develop multi-platform audio and video marketing campaigns under the Altitude Group, the CBS cross-platform sales division. Mennuto arrives from MisterFace, a content creation company he founded in 2009. Earlier, Mennuto was executive creative director of Sound Lounge, where he is credited with building the audio post production studio’s radio, casting and creative service divisions. Howie Carr’s back in Boston. Five months after leaving Entercom’s talk WRKO, Boston (680), Howie Carr is returning to the station’s afternoon drive lineup. This time WRKO is an affiliate of his syndicated show. “As the holidays passed, it became obvious to me that WRKO and Howie belong together,” market manager Phil Zachary says. “It’s that quirky relationship that everyone says will never last but ends up enduring longer than most because both partners enhance the other’s strengths and talents.” Carr’s first show on WRKO will be Monday, March 16. The daypart had been handled by Mike Siegel on an interim basis since Carr left WRKO in November. The station’s 6+ shares have remained fairly steady since then. “I’m happy to return to WRKO,” Carr says in the announcement. Now a self-syndicated host, he also makes note of WRKO’s “great signal with full market coverage.” Carr’s program debuted on WRKO in 1994. Inside Radio News Ticker…Big week for insurance ads…Three of radio’s largest volume advertisers last week were insurance providers. Geico came out on top of Media Monitors weekly Spot Ten with 47,598 spots on stations it tracks last week. That doesn’t include the 9,611 ads that Geico aired to promote its mobile app. State Farm (No. 8) and Progressive (No.9) also made the top 10. The category brought nearly 72,000 ads to radio last week on stations tracked by Media Monitors…WTOP tunes in a TV partner…Hubbard Radio’s all-news WTOP-FM, Washington (103.5) will receive some high- profile promotion on WRC-TV under a just-announced alliance between the two stations. The NBC affiliate will provide weather forecasts on WTOP, while the TV stations will showcase WTOP stories and reporters on TV. The multi-platform initiative also includes the two outlets sharing each other’s content on digital and mobile platforms...People Moves…There’s a new morning show in Phoenix. Read People Moves HERE.

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