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800.275.2840 MORE NEWS» insideradio.com THE MOST TRUSTED NEWS IN RADIO WEDNESDAY, MARCH 18, 2015 Big picture shows a healthier view of audio ad business. It’s radio’s “shadow” revenue and as it approaches nearly $1 billion it also shows advertisers are actually increasing their investment in the audio marketplace. That is, if the figures include more than just traditional FM/AM radio. It’s the proof, some executives say, that ad-supported audio remains a growing media sector. Although the Radio Advertising Bureau’s year-end report showed total industry revenue slipped 1% to $17.5 billion last year, a look at the broader audio market shows marketers increased their ad spending by more than 1%. That’s a 2% difference that some argue better reflects how the world is changing. “Audio is a thriving medium and we should be looking at it in that positive sense,” AdLarge Media co-CEO Cathy Csukas says. “There’s an evolution happening — it’s not shrinking, it’s just changing.” Consider Del Frisco’s Restaurant Group, which recently boosted advertising spending for its chain of restaurants in 20 states. COO Jeff Carcara said it’s designed to “increase awareness through media channels such as online display ads, digital and traditional radio, limited print and social media.” By lumping together digital and traditional radio, Carcara joins a growing number of marketers who, in effect, unite audio together. Not to mention on Madison Avenue, where radio departments have become audio departments. Although most digital firms don’t publicly disclose their revenue, two of the biggest new audio options do. Sirius XM Radio’s advertising revenue totaled $100 million last year, while Pandora’s ad billings totaled $732 million. Spotify hasn’t released its 2014 revenue yet, but audio sales are said to have doubled last year for the streaming company. Inside Radio’s tally shows it adds up to an audio marketplace that topped $18.3 billion last year, with grow of 1.3% compared to a year earlier. “It’s not a shrinking industry, it’s a growing industry.” Several streaming companies have pushed the Interactive Advertising Bureau to track streaming audio revenue, but so far the IAB has said the segment is too small to accurately monitor. Spotify VP of North America advertising Brian Benedik says his company is open to reporting revenue as part of a broader tally of audio ad spending. “You have other audio sources that are growing double digits, in some cases triple digits, and it’s not a true picture if you don’t include those,” he says. The former rep firm executive says not including all forms of audio ad spending cloaks a hidden positive story for the industry. In the past all audio ads came from radio budgets, but over the last five years the boundaries of what’s inside a digital budget have expanded to include audio spending that doesn’t pass through what agencies once called the radio department. “The terrestrial broadcasters are going to have to look at this more holistically. There is no way you can just look at it myopically and say this is a ‘radio channel’,” Benedik says. “It is an ‘audio channel’ now with multiple players involved with revenue coming from multiple sources, not just radio budgets, and to me, it presents a healthier case for audio — which is good for everybody.” AdLarge Media, which sells inventory for broadcast and digital companies, believes evolving away from legacy goalposts will show a growing industry, and may even help sell some new types of inventory. “It creates a positive story and an opportunity to talk about the different options that are available to advertisers,” co-CEO Cathy Csukas says. “It’s not a shrinking industry, it’s a growing industry.” Is it an idea whose time has not yet come? While the issue may not matter to advertisers, the broader audio advertising market can’t be entirely divorced from the ongoing industry debate over just what should be defined as radio. Radio Advertising Bureau president Erica Farber says whether the RAB includes services like Pandora in its quarterly revenue [email protected] | 800.275.2840 PG 1 NEWS insideradio.com WEDNESDAY, MARCH 18, 2015 reports is something that would ultimately need to be decided by members. “We definitely know that audio consumption is at an all-time high and the theory that more is being spent in audio than we’re showing I would agree with,” Farber says. Her predecessor, Jeff Haley, has a new vantage point on digital advertising since becoming chief executive of Marketron three years ago. By his calculations, 96% of all sponsored audio content in the U.S. can still trace its lineage back to FM and AM radio. “There are huge digital growth stories at almost every broadcaster in the U.S.,” Haley says. “Spot revenue is down but other pieces of their business are up dramatically so it wouldn’t be hard for almost any radio broadcaster to come into a sales meeting with a growth story.” Some broadcasters say that while a pitch from a medium with a positive story can’t hurt, they wonder whether the characteristics of other audio platforms translate to what’s happening at broadcast radio. Or whether it helps legitimize Pandora as an option. Others say the revenue data warrants keeping tabs on, but it’s still too soon to bring companies like Pandora or Spotify into the fold, at least officially. One radio executive notes some digital pureplays are losing money, so it could be dangerous to include them in the official numbers, only to see them go belly-up and then become a drag on the industry. For WBZ, ratings to match February’s record snowfall. “Newsradio 1030” WBZ had something to celebrate yesterday other than just St. Patrick’s Day. Driven by the snowiest February in Boston history, the CBS Radio all-newser notched its strongest overall ratings since January 2009, when the market converted to electronic measurement. From the holiday period through February, the station rose 5.2-6.4-7.6 among listeners aged 6+. It was first in 12+ (tied with Greater Media classic hits WROR-FM), fourth in 25-54 with a 5.8 and second in 25-64 with a 6.3 (tied with Greater Media AC “Magic 106.7” WMJX). In morning drive WBZ entered the rarified double-digit air of a 10.1 share among listeners 12+ and finished first in afternoon drive with a 7.6 share. The February survey covers January 29-February 25, during which a seemingly endless series of snow events pummeled Boston. The big January 26 blizzard occurred before the February survey began but the region was still digging out from it when the book started. “The impact doesn’t go away when the accumulation stops,” WBZ director of news & programming Peter Casey says. “People are trying to clear things out, utilities are affected and all those other things.” The January 26 blizzard was followed by three weeks of high impact storms that crippled the city’s public transit system. That had people tuning into WBZ in record numbers. Year-over-year cume among persons 25-54 exploded from 220,000 to 324,000. And average Daily Time Spent Listening shot up to 103 minutes after averaging 53 to 59 minutes for the previous 12 months. ‘Speed-bump’ events drove news radio listening in February. News radio programmers call them speed-bump events because they turn daily routines upside down, like the ability to get to work or school. Speed-bump events can drive all- news radio ratings through the stratosphere. They were common across the Northeast in February, even if they were most severe in Boston. The combination of the coldest February in 81 years and several snowstorms helped CBS Radio news WINS, New York (1010) charge 3.7-4.8-5.1 in Nielsen’s February survey. It was the station’s highest 6+ showing since at least September 2010 and a 13% improvement over February 2014. News sister WCBS (880) also made ratings hay out of the winter weather (3.0-3.6-4.0), though not to the degree it did in February 2014, when it had a 5.3 share. Philadelphia was subjected to frigid temperatures and a series of snow events that shut schools and strangled traffic. That brought CBS Radio news KYW (1060) a 6.8 share, its highest since, well, last February when it had an 8.4 share. Last month brought Chicago its coldest February on record. WBBM (780, 105.9) finished first among 6+ listeners in the total week, (5.7-7.2-7.4) as well as in mornings, middays, afternoons and nights. “Newsradio 950” WWJ, Detroit also finished first, climbing 5.0-7.3- 8.0. The snow, wind and cold didn’t just make life difficult for listeners. Reporters, producers and anchors felt the pain, too. “It’s a huge impact all the way around. All of our staff worked extra days and longer hours because that what’s we do,” WBZ, Boston director of news & programming Peter Casey says. “The February ratings are a huge result of the extra coverage we did, the extra staffing that we brought in and the extraordinary number of storms and events.” Rock radio scores ratings trifecta in Denver. When was the last time rock radio commanded the top three ratings positions in a market? You may have to go back to the format’s ‘70s and ‘80s heyday to find an occurrence like Denver experienced in [email protected] | 800.275.2840 PG 2 NEWS insideradio.com WEDNESDAY, MARCH 18, 2015 Nielsen’s February survey.