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800.275.2840 MORE NEWS» insideradio.com THE MOST TRUSTED NEWS IN RADIO TUESDAY, SEPTEMBER 22, 2015 Ad Market Sets For Annual Climb With August Up. Buoyed by increased spending during the summer by retailers, the U.S. advertising market is showing signs of improvement. That’s the indication from the U.S. Ad Market Tracker, an index created by MediaPost and Standard Media Index that tracks media spending by many of the largest ad agencies and their clients. The index rose 20 points to 184 from July to August. The August 2015 index is also up 18 points from August 2014, signaling that advertisers are increasing their expenditures. Ad spending typically picks up in August and continues to build though the holiday season, so growth in August is typically a positive sign for the months to come. Among the advertising channels, digital is showing strong growth, rising 29 points in August from July and up 94 points compared to August 2014. Reflecting advertisers’ interest in mobile and social media advertising, those subcategories showed impressive gains in August, with social media advertising up 87% compared to August 2014 and mobile ad spending up 33%. Also making notable gains were Internet radio (up 26%) and programmatic ad buys (up 23%). Overall, ad spending as measured by the index has grown from 163 in January, the lowest point of the year. And, should the upward trend continue, this year’s score is expected to continue to grow; the highest score over the last 12 months came in December 2014, when the index registered 223. Carat Forecasts Gains for Radio. Radio broadcasters, always on the lookout for positive forecasting in the challenges of the advertising environment, have found bright spots in a new Carat report. In its latest spending outlook, the agency predicts U.S. radio ad spending will grow 0.5% in 2015 and 1% in 2016. The agency says ad spending is softer across the board than predicted in its March 2015 report, due to sluggish consumer spending and a difficult winter that pushed down retail spending the first half of the year, notably for automotive. With retail and automotive ranking among radio’s top advertising categories, any softness from those two categories traditionally impacts station fortunes. Overall, Carat predicts the U.S. ad market will grow 4.3% in 2015 and 4.5% in 2016. Those figures are down slightly from March estimates, when Carat saw U.S. ad expenditures increasing 4.6% this year and 4.7% in 2016. Carat says the ad market will be lifted by 2016 political advertising, particularly local, and also from the 2016 Summer Olympics in Brazil. Among the advertising mediums, digital continues to make strong gains, particularly mobile advertising, with mobile ad spending forecasted to grow about 50% this year. By 2018, Carat expects digital advertising expenditures (including mobile) to overtake TV ad spending by $4 billion. That shift is already underway, as TV ad spending is expected to slow to 1.5% growth this year, down from Carat’s March prediction of 2% growth. The ad agency attributes that revision to more advertisers shifting ad dollars from TV to digital platforms, “as online media consumption and access to premium content continues to increase,” the report notes. Streaming Broadcasters Get Copyright Win. In what could be a positive development for broadcasters that stream online, the U.S. Copyright Office has said that private licensing deals cut by broadcasters and pureplay webcasters with record labels are admissible as a benchmark in Copyright Royalty Board proceedings. That decision comes as part of determining new webcasting rates that are set to go into effect next January. As they work to craft new statutory streaming royalty rates, the three Copyright Royalty judges are tasked with replicating a “hypothetical market” under which the current webcasting statutory license doesn’t exist. SoundExchange has argued against considering private deals—such as those that Pandora, iHeartMedia, Entercom and Beasley have cut directly with labels—if that agreement included any terms that copied, were identical to or were influenced by terms of the 2009 Webcaster Settlement Act (WSA) agreement. But Pandora, iHeartMedia, the National Association of Broadcasters and others argued that the judges should be able to take these agreements into consideration as benchmarks or corroborative evidence in the current rate-setting [email protected] | 800.275.2840 PG 1 NEWS insideradio.com TUESDAY, SEPTEMBER 22, 2015 proceeding. Not considering them “would force the [CRJs] to engage in arbitrary line-drawing and second-guessing regarding parties’ intent in entering into license agreements,” the broadcasters contended. In her opinion, register of copyrights Maria Pallante found that while section 114(f)(5)(C) of the Copyright Act does prohibit consideration of the provisions of the WSA by the judges, it doesn’t bar them from considering directly licensed agreements that incorporate or otherwise reflect provisions in a WSA agreement. “Direct agreements between sound recording owners and webcasters for uses covered by the section 112 and 114 licenses would appear to be the type of evidence that Congress had in mind,” Pallante writes. What it means—Read the Copyright Royalty Board take at InsideRadio.com. NAB’s Ad For Radio—Is Congress ‘Listening?’ As the U.S. House Judiciary Committee launches its copyright review “listening tour” on the campus of Belmont University in Nashville today, the National Association of Broadcasters is touting the power of radio airplay in an ad in The Tennessean. The NAB ad’s headline states a quote in bold from Sony Music Nashville chairman and CEO Gary Overton: “If you’re not on country radio, you don’t exist.” It then continues, “Radio and musicians have a powerful partnership. Through airplay, interviews with performers, concert promotion and giveaways, radio delivers $2.4 billion in promotional value to artists and labels each year. And radio is still the #1 way listeners discover new music—245 million Americans listen to radio each week. Let’s keep the partnership strong.” Led by committee chairman Bob Goodlatte (R-VA) and ranking member John Conyers (D-MI), the Nashville tour stop is expected to comprise a wide range of music industry professionals, with future roundtables following the Nashville event. It comes amidst renewed efforts in the music industry to end radio’s long-standing exemption from paying a performance royalty. Broadcasters, with lobbying support from the NAB, are continuing to fight back, via the anti-royalty resolution, the Local Radio Freedom Act, which has 212 cosponsors in the House, and 21 in the Senate. You can see the NAB ad HERE. Chuck Taylor Joins Inside Radio. Veteran journalist Chuck Taylor has joined Inside Radio as a contributor. He will report radio industry news and trends for Inside Radio’s daily newsletter, its continuously updated website and other editorial products. Taylor has written extensively about radio and the entertainment industry for three decades, including a 14-year stretch at Billboard magazine. At Billboard, he served as senior editor/talent, senior writer, radio editor, singles review editor and the columnist of AirWaves. He also held senior editorial positions at sister publications Billboard Radio Monitor and Radio & Records, specializing in the CHR and AC formats. He has been interviewed on an array of radio, music and pop culture topics and has been quoted in The New York Times, USA Today, TV Guide, People, Parade, Entertainment Weekly and numerous other publications. His broadcasting experience includes on-air stints at country WWOD-AM and AC WKZZ-FM Lynchburg, VA, his hometown, as well as voiceover work for commercials and theater. He also hosted Billboard’s weekly online countdown at billboardradio.com. “Chuck is a seasoned and versatile journalist with radio in his DNA,” Inside Radio managing editor Paul Heine said. “We’re thrilled to have him contribute to our mission of providing our readers with news, insights and analysis they won’t find anywhere else.” Boomers See Mobile Ads As Turn-Off. While a significant amount of ad dollars are being reallocated to digital, marketers looking to reach Baby Boomers may be wise to stick with radio. A new report from eMarketer shows Boomers do not [email protected] | 800.275.2840 PG 2 NEWS insideradio.com TUESDAY, SEPTEMBER 22, 2015 respond well to mobile advertising on their smartphones. According to the numbers, less than 8% of the Boomer generation said they would likely purchase a product advertised on their mobile phone, and only 5% want to receive ads on their smartphones. Also, only 13.4% said they regularly used a mobile device to hunt for deals while shopping. While advertisers face an uphill climb to reach Baby Boomers on mobile devices, the demographic is easily accessible via broadcast radio. According to Nielsen’s Q2 Total Audience Report, radio users age 50-64 spend a staggering 68 hours, 46 minutes per month using radio—and likely hear plenty of spots. Even if Boomers are generally accustomed to listening to terrestrial radio, having grown up with the medium, they actually have embraced smartphone technology. EMarketer estimates 59.3% of Americans have a smartphone and, among Boomers, 64.4% of mobile phone users have a smartphone. In contrast, 90.2% of mobile users ages 25-34—a.k.a., Millennials—own a smartphone. While Millennials may be more likely to embrace digital technology, that doesn’t necessarily mean they’re an easy target for advertisers. New research shows many adults 25-34 are using ad-blocking technology when viewing digital content—63% of Millennials use ad-blocking software, according to a Moz and Fractl survey from July 2015. Globally, 31% of Millennials blocked ads online, according to Q2 2015 data from GlobalWebIndex.