|
|
 |
|
|
|
Top Radio Execs Make Upbeat Impression In L.A.
LOS ANGELES -- January 31, 2008: The Southern California Broadcasters Association and marketers' trade organization thinkLA jointly presented a powerhouse panel discussion Thursday morning on "The Status and Future of Audio-Anchored Advertising," with Clear Channel Radio President/CEO John Hogan, CBS Radio President/CEO Dan Mason, Emmis Chairman/President/CEO Jeff Smulyan, Univision President/COO Gary Stone, and Citadel Chairman/CEO Farid Suleman. (Radio One President/CEO Alfred Liggins had also been scheduled but did not appear.)
After an introduction by SCBA President Mary Beth Garber, moderator Kyle Acquistapace -- EVP/Director/Media Planning for ad agency Deutsch/Los Angeles -- began his introductions with, "The topic today is the future of audio-anchored advertising, formerly known as radio."
Each of the execs then gave some opening remarks, beginning with Hogan, who set the generally upbeat tone. "Radio today for consumers is a terrific medium," he said. "It is a vibrant, robust, ubiquitous, easily accessible, diverse, reliable, high-quality source of entertainment and information. For advertisers, radio today is effective, flexible, targetable, allows for easy implementation, allows for a wide variety of creative approaches, and it is an exceedingly efficient way to reach consumers."
Hogan acknowledged that "radio today is challenged" by new technology and new competitors, but said, "Radio is up to that challenge. We compete very, very effectively."
'Our Problem Is One Of Perception'
Then, making a point that would be echoed by several other panelists, Hogan said, "Performance and capabilities are not our problem. Our problem is one of perception. Radio today is perceived very differently from how it actually performs." He pointed to radio's technological advantages, online and in the rollout of HD Radio, and in its move into the cellular arena.
"Another perception," he said, "is that radio has lost audience. And the truth is that we have our challenges as consumers have more choices." He said radio has been competing successfully for that increasingly distracted audience, with more than 90 percent of Americans tuning in to radio every week. "When you look at how we have fared in the face of our competition," he said, "we have managed to keep 85 to 87 percent of time spent listening."
Another misperception, Hogan said, is that radio is "somehow limited or unable to provide new solutions for advertisers as they face new challenges. Just the opposite is true." He said it's "Not just radio, it's the power of on-air, coupled with the power of new distribution platforms like online and like cellular."
Mason began by talking about his early radio ambitions and admiration for DJs and for radio's ability to reach out during emergencies. "I've known since I was 12 years old that this was the medium I wanted to be in," he said.
He went on to talk about the advantages he sees for radio from electronic measurement. "PPM is going to revolutionize this industry," he said, "because we've worked with an antiquated diary system that is 30 years old." "He called the early PPM test results in New York "outstanding" in terms of cume, pointing out that the PPM shows Clear Channel's AC WLTW/New York with a cume of 5 million. The crowd applauded that statistic, and Mason added ruefully, "I think we're second."
'I Will Turn Into A Werewolf'
Mason went on, "If I listen to one more analyst or one more satellite advocate say that radio doesn't work, I will turn into a werewolf, I promise." He pointed to some successes at non-CBS stations, including Citadel's News/Talk KABC/Los Angeles and its long-running, successful blood drive program, and Entercom News/Talker WWL-AM/New Orleans, which, Mason said, was "the only station, radio or TV, the only voice in New Orleans during [Hurricane] Katrina." He continued, "Do you honestly believe those people were listening to iPods? For this industry to have to defend itself against iPods is not only ridiculous, but it's wrong."
Smulyan also talked about the challenges for radio and said, "Our plan is to fight back. This is an industry that is united, coming together, and we're previewing it here before the largest radio market in the world."
He also cited some stats to show that radio's decline has been exaggerated, saying, "This is the same decade where we've seen the rise of satellite, the Internet, cable TV, mobile phones, and, with all this, radio has lost only 3 percent of its reach. And with population growth, there are more people listening to radio today in the U.S. than at any time in its history."
Smulyan also echoed Hogan's point about radio's perceptual problem, saying the "perception is that radio's stale, it's yesterday's news, it's a dinosaur." He continued, "What we'll do with our audience is engage them, and engage our advertisers, and meet these challenges head-on." He pointed to the Radio 2020 initiative, launched at NAB2007 in September, and said, "What we have to do is remind customers of how big a part of their lives radio has been."
'We're Not Hiding From New Technology'
Smulyan continued, "We're not hiding from new technology, we're driving it. One of the hottest-selling features for the iPod is an FM tuner." Then, in a wry aside on struggling Rhythmic AC KMVN/Los Angeles, he added, "I'd like to tell you that all of them are tuned to 93.9. I can't say that. But one of the biggest reasons for MP3 sales over iPods is that tuners are built in." The iPod is nearly the only digital audio player available that doesn't come with an FM tuner, but Smulyan said said he believes Apple will soon commit to radio tuners in its market-dominating device.
"Our goal, in the next five years, is to have a radio tuner in every portable phone, in every PDA sold in the United States," Smulyan said. "We want to reach 400 million more devices in the next five years."
Stone spoke next, asking the audience to "take to heart the things you hear that are similar from each one of us." He said, "I am very excited about the future of the radio industry, and Spanish-language radio in particular," adding, "Hispanics are more connected to the media they listen to than their non-Hispanic counterparts."
Looking at radio's new competitors, Stone said, "I think it's important to remember, in this area of hot new technologies, that radio listening is still very high." He pointed to the reach numbers the PPM is showing and said, "Radio's strengths as a local medium are paramount," particularly during disasters when "no other media is left standing."
Stone pointed out that he's been in radio for 38 years, then said he's announcing that "I'm no longer in this business. Instead, I consider myself to be in the audio delivery business."
'What Changed?'
Suleman got a laugh from the crowd as he began, "At this stage, I'm resigned to where I can repeat what everybody else has said and bore you to death, or I can choose to paraphrase what has been said and put you to sleep. I choose the latter."
Suleman agreed that radio has a perceptual problem, and asked, "When did this perception of a problem in radio start? I think it's a coincidence -- about six years ago, about 2001 -- it coincides with the massive consolidation that occurred in radio. So what changed?"
Suleman said that, with consolidation, the focus moved from marketing to pricing. "I think it kind of started a downward spiral in pricing," he said, "and since then we've all focused on taking revenue away from each other, rather than focusing on effective marketing solutions to get radio to grow."
Acquistapace then asked the panel where radio's creativity is going to come from in the future. Hogan pointed to initiatives like Clear Channel's dedicated content development team and its Format Lab, and Mason cited CBS's move to use air talent across clusters. "You'll see less from our company of an individual silo approach," he said. "We'll push content across all stations using the best that we have."
Asked what consumers want to see from radio formats, Smulyan said, "There are 300 million answers to that." He went on, "We've been criticized because we overresearch. We talk to our audiences every hour, every day, and we'll continue to do that."
Acquistapace then asked about perceptions of radio at the agency level, observing that clients sometimes dismiss radio, saying they don't listen themselves, or they believe radio advertising creative is weak compared to other media.
Suleman said he doesn't think the problem is at the CEO level, but at the media planner and buyer level. He told the audience, "We don't sell radio. You guys are the ones that do the selling."
Stone said, "When the economy took its tumble back in 2001, a lot of industries came back, but radio didn't come back as we hoped it would." Agencies, he said, were lured to new media, adding, "The salesperson for radio has kind of gotten beaten down over the years and started believing what buyers were telling them about what their product was worth. And that's got to stop."
Acquistapace then asked the panelists to look ahead 10 years, to 2018. "Physical media's dead," he said, "nobody's buying a CD or a DVD, commute times have doubled or tripled, and the music publishing industry as we know it today barely exists. What does radio look like? What role does it play in people's lives?"
Mason said radio will continue to use its strengths of audience engagement and calling people to action, as well as its targetability. "We can cut an audience within a 40-mile radius of a client, or we can go as far as 30 million people," he said. Radio's "ability to reach out and touch and keep a listener engaged is what we'll be selling, mostly."
Suleman said he sees greater audience fragmentation ahead, but continued, "I think radio TSL will go up, quality of programming will go up."
Stone also believes more fragmentation is coming. "Core demos could get much more narrow with the availability of frequency that HD is going to give us," he said.
'Fragmentation Plays To Radio's Strengths'
Hogan agreed, and added, "Fragmentation plays to radio's strengths." He went on, "As we look into the future, the ability to provide more choice and more diversity is also apparent. You can experience it today, listening to the HD2 channels being broadcast in addition to the terrestrial channels." And online, he said, "There is an almost limitless opportunity to program to a fragmented audience."
Asked about HD Radio and its traction with consumers, Smulyan said adoption is going to take time. "There are a billion radios in the United States today," he said. "We're not going to replace a billion radios in a week and a half." Mason agreed, saying, "If you look and see how quickly this curve is coming, it is remarkable." He said the real discussion will be about HD chips and the distribution channels that will open up when the chips appear in iPods, cell phones, and other devices.
"HD is just going to explode on us," Stone said, "and we may not all be ready for that."
Acquistapace then asked if radio is getting ahead of advertisers as its packages more and more often include online and cellular. Hogan said, "I'm not sure we've led faster than agencies have been able to respond. It's more of a question of how we work together in a rapidly changing environment. Our responsibility, as broadcasters and agencies, is to figure out how to work together."
During the Q&A, one questioner asked Hogan whatever happened to Clear Channel's "Less Is More" initiative, to which Hogan replied, "The reason I don't focus as much on 'Less Is More' is because it has served its purpose and it's part and parcel of what we do." He said the initiative to reduce spot breaks and offer a greater range of ad lengths has been "extremely successful," but it's also "a little bit in the rear-view mirror."
Another questioner asked if there's any industry group working with consumer electronics manufacturers on getting radio tuners into devices, and Smulyan responded, "The answer is yes. The HD [Digital Radio] Alliance is working on it."
The next questioner made a long and passionate speech about how radio has "forgotten what made it great" and needs to "go back to the entertainment industry, not a bunch of technology."
Smulyan responded with, "We started by saying that if we aren't relevant, if we aren't entertaining, nothing matters ... The reality is that we are reaching people every day because we are entertained. Our job is not to lose sight of that."
A questioner from an agency said she has been "begging radio stations to sell me good radio ideas" but is getting constant pressure to buy other elements. "When are we going to go back to selling radio for what its qualities are?" she asked.
"It would be a lot easier," Hogan replied, "if there were no iPod, if there wasn't an Internet." But, since there are, he said, "We're in a position to take advantage of them. I wouldn't suggest that it's at the expense of radio, it's thinking about radio differently."
Comment on this story
E-mail this story to a friend
Sign up for Radio Headlines
|
|
|
|
|
|
|
From the Publisher
|
|
|
