NextRadio To Personalize Radio Ads In Cars

COMMENTARY

• by Laurie Sullivan , Staff Writer @lauriesullivan, Yesterday

Consumers will soon have an option to save an ad they hear on the radio with a push of a button on the steering wheel of their car. Paul Brenner, president at NextRadio, says the button will support a new type of personal, data-targeted advertisement in cars similar to those found while listening to ads on smartphones.

The custom-targeted ads rely on tons of data, some of which is collected by the car.

The first commercial version -- introduced at CES more than two years ago -- will debut in 2018. Brenner says it has been a long production cycle and a lot of work.

Data & Programmatic Insider:  Where do you see better use of data and programmatic media buying driving the radio industry?

Paul Brenner:  We are trying to apply the same innovation you've seen in the smartphone into the car. I believe there's a substantial change coming with Android Auto. Consumers will have much more say on what types of apps integrate into the car, similar to the way you do on your smartphone.

Data & Programmatic Insider:  Do these changes prompt a new media-buying model?

Brenner:  We are forging ahead on the smartphone, using the user to modify the media buying of radio, especially in cars. It will become more important in the car because that's where the majority of radio listening occurs. We're building systems that can be used to change the media-buying model.

Data & Programmatic Insider:  Is programmatic technology and data personalizing radio ads in the car the same way as on the smartphone?

Brenner:  Yes. There's a three-year cycle to build features into cars, and we've been working with a few automakers for about that long. The things we bring to market in 2018 have been in the works for a while. They are fully focused on using the data from the car for a better, more targeted experience. We're always aware to stay away from any driver distractions.

Any video, excessive or image-based ads will always remain difficult to make prominent. But [then there's] targeted audio or suggestive audio that prompts a driver to take an action like pushing a button on their steering wheel to save a commercial or call a phone number in the advertisement. Companies are starting to develop these types of advertisements, and we're part of those conversations. 

Welcoming Gen-Z: Be Inclusive or You'll Be Irrelevant

By Jack Myers July 25, 2017 1stFive Village Archives

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On August 3, Turner, Horizon Media and MediaVillage.com will welcome 350 interns who are working this summer in New York City-based media, advertising, marketing and entertainment companies. The 4th annual 1stFive.org Summer Interns Experience is gathering the first class of Generation Z to join our community for a shared introduction to our business and to each other. Born after 1995, Gen-Z is the first to have grown up in a world in which the Internet and mobile devices were always present. They're our first window -- our prism -- into future generations that will be born into a world with technological innovation beyond our conception: driverless cars, pilotless airplanes, ever-present media, the Internet of Things, robotics, artificial intelligence, virtual reality, blockchain, Nintendo Go on steroids. This generation has grown up in a time of unprecedented access to information and global connectivity, but they have also grown up in a world of upheaval and constant disruption. From the September 11th terror attacks to the real estate bubble burst and subsequent recession; from the incessant attacks on Hillary Clinton they were born into to the radicalizing triumph of Donald Trump, tumultuous events have been the backdrop of their lives so far. Chaos is the norm. Change is simply a reality.

Based on my conversations and interviews with hundreds of young people and their parents over the past decade, a study I commissioned among more than 1,000 young men and women, and three books I authored about Gen-Z and young Millennials, I can confidently report that Gen-Z and Millennials are dramatically different generations. Millennials are the offspring and inheritors of many of the least appealing qualities of Boomers, Gen-X and Gen-Y, while Gen-Z represents a completely new entry into the genetic pool, bred as much on the Internet and media as they have been by their parents – and in many cases even more so. They're a small generation but an exceptional one from which we can learn a great deal. Those who make the investment to engage with their new Gen-Z team members will find they offer uniquely valuable insights and organizational value. Those who assume they are Millennials on steroids will miss an opportunity to be witness to a generation who will be our guides and leaders through a tumultuous period that will make the last two decades seem to have passed in slow motion.

They have seen the old systems fail and see no reason to keep them around. After all, in their lifetime technology continually advances so quickly that phones are considered outdated within a year. Gen-Z does not believe in perpetuating anything that isn't working. They are not destructive, simply disruptive. They believe themselves to be both responsible for and capable of manufacturing their own happiness and success. In order to do that, they have no qualms about breaking down long-standing institutions and transgressing traditional boundaries, such as gender, which they view as artificial and outmoded.

The End of Gender?

Second wave feminism, with its cry that "Biology is not Destiny," pushed the concept of gender as distinct from sex into the social discourse in the mid-1960s. But psychologists and academics had identified the distinction at least two decades prior. In 1945, an article in the American Journal of Psychology defined gender as "the socialized obverse of sex."
Today, most people understand that the word sex is used when you are discussing the biological differences between bodies. The word gender, on the other hand, refers to the cultural and social distinctions between the sexes. While Millennials embraced the idea that gender roles could be subverted or transgressed, Generation Z is really the first generation to embrace the idea that your gender identity is self-defined.

Gender Identity

Gender identity is how an individual defines their gender. Earlier generations were, and continue to be, strongly invested in a strict gender binary consisting of men and women whose gender identity aligns with their biological sex. Millennials, as a group, are more open to less rigid gender boundaries, but Generation Z is rejecting the gender binary altogether.
According to a report by J. Walter Thompson Innovation Group, 56 percent of 13- to 20-year-olds in the United States know someone who uses gender neutral pronouns. The University of Wisconsin-Milwaukee's Lesbian, Gay, Bisexual, Transgender (LGBT) Resource Center lists the following gender-neutral pronouns: zie/ze, sie, ey, ve, tey, and e. It has also become common to use "they" as a singular pronoun. In fact, "they as a singular gender-neutral pronoun was added as accepted usage to the 2017 AP Style Guide."

Generation Z is also using a variety of language to express their gender identities. Some of these appear to uphold the gender binary, such as cisgender and transgender. A cisgender person is someone whose gender identity aligns with the sex they were assigned at birth. Someone who is transgender has a gender identity that does not align the sex they were assigned at birth. In addition to these two terms, however, there are a few more that represent the spectrum between them, such as gender nonconforming, gender-fluid, and genderqueer.

People who are gender nonconforming do not adhere to the cultural and social expectations of their gender. Gender-fluid individuals view their gender as something that is malleable and, as the term implies, fluid. Genderqueer people view themselves as outside the traditional definitions of gender. They may be gender-fluid or identify as both male and female, neither male nor female, or as simply beyond gender categorization.

Despite this proliferation of language to express and categorize gender identity, an overwhelming majority of Generation Z believes that gender does not define a person to the extent that it did in the past. This can be seen in everything they do, from their retail spending habits to their views on hot button political topics. Approximately 44 percent of Generation Z states they only buy clothing designed for their gender, while 55 percent of Millennials say they only buy clothing designed for their specific gender.

Generation Z's attitudes about gender have a ripple effect. If the gender binary is replaced by a spectrum, it stands to reason that Generation Z's views on romantic relationships and the family unit will shift as well.

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Continued from page 2

Redefining Relationships

Generation Z is the first generation where people who identify as only heterosexual are not the majority. Only 48 percent of Generation Z identifies as straight, down significantly from the 65 percent of Millennials who identify as straight. Generation Z tends to view sexuality as a spectrum similarly to how they view gender. As with gender and pronouns, one of the easiest ways to see this trend is in the language people use to self-identify.

In addition to straight, gay, and bisexual, members of Generation Z identify as pansexual, asexual, or simply queer. Pansexual people are fluid in their sexual orientation and reject the term bisexual because it relies on the gender binary. Someone who is asexual is not sexually attracted to any gender. The term queer has been used pejoratively in the past, which may cause older generations to balk at the use of it to self-identify. But for Generation Z, and some Millennials, it has been reclaimed as an inclusive term for all members of the LGBT community, especially those who are not represented by the letters L, G, B, or T.

What do all these terms have to do with Generation Z's views on relationships? First and foremost, we may see fewer heterosexual relationships among Generation Z. The relationships they do have may redefine the roles of partners within them. While this may be disconcerting for some, it could actually lead to something great – truly egalitarian romantic relationships. If all the old-gendered rules and expectations of dating and relationships dissipate, we are left with the opportunity to get to know one another not as men and women but as human beings. 

In many ways, the Internet is already helping to facilitate this. People "meet" online and may spend hours chatting and getting to know one another before they ever see one another face to face. Of course, this comes with a host of concerns all its own. One thing is certain, however, the Internet has disrupted the status quo when it comes to dating and relationships. But since Generation Z has never known life without the Internet, the old ways of courtship may be as foreign to them as a rotary phone or an 8-track.

Interestingly, Generation Z is actually less likely to use online dating and social media to attempt to find a romantic partner than previous generations. Only eight percent of teens today report meeting a dating partner online. Part of this may be attributable to their age. The oldest members of Generation Z are in their early 20s and the youngest are still in high school. Potential dates can be found in the high school classes and on college campuses. There's really no need to search online. That may change in the future when they are actively looking to settle down, but if Generation Z follows the trend set by Millennials that won't be any time soon.

Restructuring Families

While the traditional nuclear family unit, a husband and wife with two kids, has not been the reality for many families for a long time, most previous generations still held on to it as an ideal. Millennials are delaying getting married and having children until their mid-thirties. Although what many do not see is that Millennials are not delaying marriage and starting a family because they do not believe in the institutions. Quite the opposite, in fact.

Millennials have grown up with a high divorce rate and faced an unstable economy as they began to arrive on the job market. These two traits combine to make Millennials cautious about getting married too soon. They want to be certain they have chosen the right partner. Additionally, they want to feel as though they are financially able to support a family before starting one.

Generation Z, on the other hand, has grown up in a wide array of family structures. They do not revere the nuclear family as the glue keeping society together. Around one-third of the members of Generation Z have grown up in single parent households. Many have been raised in multigenerational homes, living with parents and grandparents. They tend to be close to their parents, with nearly 90 percent referring to parents as their best friends.

Additionally, this generation's families are more diverse than their predecessors in nearly every way imaginable. Generation Z is coming of age in a world where same-sex marriage is legal. They have peers with two moms or two dads and accept it as normal. The religious, racial, and ethnic makeup of Generation Z's families are also far more diverse than the families of Millennials. For members of Generation Z, the only essential component for a family is love and love can look any number of ways.

Yet, despite their overall satisfaction with their families of origin, Generation Z does not rank getting married as important to them. Part of this could be a sign of their age. The generation before them is putting off marriage until after they feel established in their careers. If that is not until their mid-30s, many members of Generation Z are less than halfway there.

It is also possible that members of Generation Z are not invested in the institution of marriage. As mentioned earlier, Gen-Z has come of age in a time filled with the falling of monoliths, both figuratively and literally. From the World Trade Center Towers in New York to the real estate economy and large banks, Gen-Z has grown up with the knowledge that no institution is impenetrable or eternal. They are inherently skeptical of anything that claims to last forever. Members of Gen-Z may very well consider marriage to be one of many things that may have had value in the past, but it is of little use today. As they have embraced a spectrum of gender and sexuality, Gen-Z may also believe in a spectrum of family, including chosen family. 

The concept of chosen family arose from within the LGBT community. Chosen family includes the people in your life who are most important to you. Two of the main reasons the LGBT community developed chosen family was due to the inability to get married and the loss of family of origin. 

Until very recently, same-sex marriage was not legal in all states and coming out as LGBT often resulted in being rejected by your family of origin. But human beings are social creatures who thrive in communities and tend to wither in isolation. Chosen family fills this need but does not require outside recognition of its validity. Gen-Z may be drawn to the concept of chosen family for its flexibility. A generation that believes in the fluidity of gender and sexuality is likely to prefer commitments that allow for malleability as well.

Continued from page 4

What Do These Changes Mean for Marketing?

Millennials have been the focus of a lot of research and study, but companies really need to be thinking about and researching Generation Z, as I have been doing for a decade. A recent study by New York-based ad company, Sparks & Honey, revealed that more than 25 percent of the American population belongs to Generation Z and they have money to spend. The average member of Generation Z gets a weekly allowance of $16.90 each week. Collectively, that means Generation Z has $44 billion in allowance each year. As they come of age and join the workforce, their income and market share is going to start to increase pretty quickly. Marketers who are not already strategizing about how to appeal to Gen-Z, need to get started and fast.

Social Media Natives

Where Millennials are digital natives that grew up consuming large amounts of content, Gen-Z is a generation of social media natives. They have grown up creating content. Gen-Z may be on Facebook, but that's not where they spend the majority of their time. Sponsored Facebook ads, no matter how effectively Facebook's algorithms may target users, are not going to attract the attention of Gen-Z.

Recently Facebook started allowing advertisements to play in the middle of certain types of shared content, which reflects the age of the average Facebook user. Where older users will sit through the ad to see the rest of the video, Gen-Z does not have the patience for that. According to research, they have an 8-second attention span and if your ad interrupts their video, they will simply close the video. They will either move onto the next thing or find the video on another platform.

If Gen-Z is not on Facebook, where are they? They use social media in two distinctly different ways from previous generations: to be anonymous or to create content. Gen-Z interacts with their peers largely on social media platforms, such as Whisper and Snapchat. They can be found creating content on Instagram, Vimeo, and YouTube. To appeal to Gen-Z, on social media as well as on other platforms, marketing companies need to create ads that have value for Gen-Z and communicate their message in an environment that reflects their ideals.

Sex Sells, But Generation Z Isn't Buying

Gen-Z is a generation of diversity. In addition to the gender and sexuality diversity mentioned above, there has been a 50 percent increase in young people who identify as multicultural since the year 2000. Marketing campaigns that do not reflect the diversity of Gen-Z will be seen as outdated. Inclusivity is the name of the game with Gen-Z because they believe that representation matters. They want to see people, relationships, and families similar to their own on screen and they will not tolerate anything that resembles sexism, racism, homophobia, or transphobia.

There is nothing that reveals the difference in marketing to Millennials versus Gen-Z quite so clearly as the recent Carl's Jr. advertising campaign. Launched at the end of March 2017, the story of this ad campaign is that Carl Hardee, Jr. was entrusted with the family company a few years back. During his reign, Carl's Jr advertisements were filled with scantily clad women and double entendrés. But now, the storyline goes, Carl Hardee, Sr. is back. He became fed up with the immature, objectifying advertisements and has come to restore dignity and respectability to the fast food restaurant.

The message here is clear: gone are the days where objectifying women was met with a wink and nudge. Millennials may have been willing to embrace it as "all in good fun," but Gen-Z is simply not having it.

Be Inclusive or You'll Be Irrelevant

Additionally, Gen-Z will reward advertising campaigns that reflect family and individual diversity. They understand social media influence and will gladly share content that promotes inclusivity. Dove experienced great success with their Real Women campaign, where they began including more size and racial diversity into their marketing and explicitly stated that it was time to portray "Real Women" in advertising.

In April 2017, Dove launched their Real Moms campaign to introduce their baby product line. Designed to bust stereotypes of what a typical mother looks like, the series of commercials will feature cattle ranchers and break-dancers. With their first advertisement in the campaign, they broke entirely new ground in marketing by featuring a transgender mom. The commercial brilliantly shows this mom performing the mundane tasks of motherhood, such as changing diapers, as she discusses the difficult and insensitive comments she gets as a transgender mom. It's very clear in the ad that she is, within her home and family, just another real mom who deserves to be seen as such. This is exactly the type of advertisement that will resonate with Gen-Z. 

Continued from page 5

Conclusion

If you want to market to Generation Z, and you should, you need to embrace their ideals. Both Dove and Carl's Jr. understand that Gen-Z is not going to accept anything less than full inclusivity. Companies that worry about losing the market of older generations are ignoring the size and potential power of Gen-Z. The future of successful marketing is a lot like Gen-Z and their views on gender and relationships: diverse, inclusive, and groundbreaking.  

Fox TV Stations In Programmatic Deal With WideOrbit

 

• by Wayne Friedman , July 26, 2017

Fox Television Stations has struck a deal to sell ad inventory with programmatic technology company WideOrbit.

Local Fox TV station ad inventory will be offered in three ways -- in an open marketplace for Fox Stations-controlled advertising inventory; as programmatic/automated transactions with selected buying partners; and with inventory integrated with CoreMedia Systems for direct-response ad buyers.

Fox has 28 TV stations in 17 markets, covering more than 37% of U.S. TV homes. The companies say Fox is the largest U.S. local TV broadcast group to commit to programmatic advertising sales.
“Based on our tests over the last year, we are convinced that programmatic advertising will be a complementary additional sales channel for our stations,” stated Jim Burke, president of sales of Fox Television Stations.

WideOrbit claims a programmatic TV footprint of 750+ stations reaching over 93% of U.S. homes and 270 million people.

Influencer Marketing The Gen Z Way

Commentary

• by Victor Ricci , Columnist, July 12, 2017

Just as brands finally started to figure out what Millennials want, a new demographic has taken center stage. Enter Generation Z, a formidable group that will make up a quarter of the U.S. population by 2020 and account for 40% of all consumers.

As influencer marketing surges in popularity, many brands are turning to social media to reach Gen Z. But to effectively connect with them, it’s important to understand what makes this group tick—and how it differs from previous generations.

Before solidifying your digital marketing plans, it’s important to understand three core truths. For Gen Z …

Social Is More Than Skin Deep
For Gen Z consumers, social media represents much more than selfies and filters. It’s a valuable platform for self-expression, and a place to find and connect with like-minded individuals. Gen Z wants to embody and reflect the positive traits and characteristics they see in the people they follow—and respect—on social media. Take fashion, for example. For Gen Z, clothes are an opportunity to make a bold statement about who they are as individuals, their political beliefs, etc. Because of this, social influencers like feminist and activist Lena Dunham have become fashion icons in their own right.

It’s Personal
For Gen Z, whom you follow on social media and what you choose to share says a lot about you as a person. Your social media channels are a representation of who you are, what you believe in, what you take seriously and who you aspire to be. Gen Z follows digital influencers who post thematic content that they care about, so they feel a personal connection—a digital friendship. So when brands engage these thematic, digital influencers for campaigns to promote relevant products, the result is more meaningful and genuine to those consumers who are already following and engaging.

Not all Social Channels are Created Equal
A recent study revealed Gen Z’s social consumption patterns: 88% use Instagram and Snapchat often versus 81% for Facebook and 66.6% for Twitter. Each of these social media channels has a different function for Gen Z, and provides an opportunity to showcase a different angle of their personalities. Typically, Gen Z consumers share different stories on Snapchat than they do on Instagram. Facebook is used more sparingly (after all, Mom, Dad and Grandma are on it!). And Twitter is often reserved for less visual conversations and complaints when something goes wrong. For brands seeking to engage Gen Z on social, it’s important to understand these channel-specific nuances, as a one-size-fits-all approach will not work.

When it comes to influencer marketing to Gen Z, too many brands have taken the “celebrity route,” flocking to A-list celebrities who will charge thousands of dollars for a handful (or even just one!) tweet promoting their product. What’s worse, these brands are not even considering the lesser-known influencers that Gen Z consumers are already following, already consider genuine and trustworthy and are already actively interacting with.

But as more brands learn more about the Gen Z persona, some are beginning to look beyond traditional social influencer marketing methods. They’re turning to new, non-celebrity influencers who are focused on a particular theme and topic—such as fitness, nutrition, beauty, cooking, etc.—and have large, fiercely loyal follower bases. These brands are discovering that engaging these influencers for longer, sustained campaigns at a fraction of the cost can help forge strong connections with Gen Z consumers, driving deeper engagements and, ultimately, more sales and revenue.  

6 States Of Rebranding

Below is something good to share with your clients. Philip Jay LeNoble, Ph.D. CA

Commentary

• by Max Du Bois , Op-Ed Contributor, July 13, 2017

Most sectors these days are in a continual state of flux as they seek to reinvent and reposition themselves to become more relevant. This is when many turn to their brand to adjust their position, claim new territory and re-energize their tone and message.

There is one sector in particular that is frequently seen adjusting its position and, as a consequence, rebranding, in a bid to reach beyond its conventional boundaries. This is the third sector, and it often makes one crucial yet common mistake that causes the entire rebranding exercise to either lack impact or fail completely.

This occurs when charities embark on rebranding without first asking themselves a few searching questions, namely, what the key reason is for undertaking a rebrand.
This may sound simplistic yet it is the single most important element to the rebrand that will give the charity a far clearer means to measure the outcome. It will also cut through the potential confusion when briefing agencies and allow all parties involved to have a clearer and more defined set of goals.

If the current brand state along with the projected future brand state are not properly identified at the outset, there is a risk of weakening the business case to stakeholders for investment in the brand in the first place.

Proof that a rebrand has been successful occurs when it reaches out and inspires people to act, to give money, to volunteer, to protest, to use the charity’s services and to change attitudes.
Merely rebranding is not a guarantee of success on its own. We have seen charities adopt an entirely new brand identity and then slowly disappear into oblivion.

There are a number of quite specific ingredients to a successful rebrand and they all start with defining the strategic reason for which a charity decides to undergo the process.

This reason is best summarized as any one of six “rebrand states” that indicate a need for a change, and a charity may well straddle more than one of these areas. In fact, they often do. These are to:

Realize a new opportunity This is where there is a vision to move into a different area or market. Realizing a new opportunity is about using brand to step forward and truly make a difference when it’s fundamentally shifting its focus, to become more relevant, to deepen relationships with all stakeholders and build new ones. This is probably one of the most energizing reasons for deciding to rebrand.

Deepen and assert This is where things are going well but there are more people to engage. Unlike rebranding to realize a new opportunity, deepening and asserting is a less common reason behind a rebrand, and the subtle difference is key. In this instance the role of the rebrand has to focus on diving more deeply into what the charity currently offers rather than widening outwards.

Break out This is where the brand may have become old, fussy and stagnant. In many such instances engagement may still be good, however there is a need to revitalize the charity’s position and its raison d’etre, to redefine its relevance. This is also an ideal opportunity to use brand to lead in your area, literally breaking away from the crowd and creating standout.

Consolidate This is where the portfolio of sub-brands has created incoherence and confusion, and a strong, flexible brand architecture is required. As charities respond to the current economic climate by forming new allegiances and developing innovative products, services and initiatives, they frequently stumble at a key hurdle: how to communicate the strength of the collective power of their portfolios. This is where we often see poor links and brands that blot out individual strengths.

Defend This is where the sub-sector is volatile and there is a need to build on the brand to defend against the negative effects of the external factors of shifting landscapes (such as funding cuts and new policies) and ensures it doesn’t get left behind.

Future-proof This is where income is going down, volunteers are decreasing and there is a need to future-proof the brand, reverse decline and propel the organization forward. There is a subtle difference here between rebranding to defend, which focuses on existing strengths in response to external factors, and rebranding to future-proof, which also responds to internal factors and is often a more visionary approach.

Asking what a brand can do for a charity requires a subtle but powerful shift in approach to defining the strategy behind a brand change. It places the brand more firmly in the centre of the charity’s communications platform and as a consequence empowers it to shout about what the charity is really here to achieve.
Ultimately, there is no exact formula or tick list that governs a good or bad rebrand. It is a complex, often messy, range of things. Defining the reason for rebranding and meshing this with the simple philosophy that is invaluable to creating successful rebrands: uncover what really counts and say this in a way that really matters, will make the difference between rebranding with impact or rebranding for the sake of it.

A rebrand needs to deliver a firm stance for something, it needs to cause a reaction, get past the obvious, and represent the authentic kernel of what the charity is about. Only then will people rally to your cause, give you the funds you need and make you the change-maker you were conceived to be.

 

BIA: Local Ad Spend To Hit $174B In 2021

Look for local advertising spending in the U.S. to grow 3.8% annually to $174 billion in 2021, according to BIA/Kelsey's mid-year projections on the market. The new report adjusts downward its projection for this year to $147.9 billion because of softer-than-expected economy. It also predicts shift of share from traditional media to digital and mobile.  

TVNewsCheck, July 12, 2017 7:55 AM EDT

Between 2016 and 2021, local advertising spending in the U.S. will grow 3.8% annually to $174 billion, according to BIA/Kelsey's mid-year projections on the market.

The compound annual growth "will be driven by double-digit increases in mobile and social advertising and local online and mobile video, all slated to experience at least a 17% increase by 2021," the report says.

The report slightly decreases its original projection for 2017 to $147.9 billion because of an "overall weaker than expected economy" in the first part of the year.

During the five-year period, growth in online/digital advertising will grow at 11.9% annually, while advertising on traditional media like broadcasting will bump along with 0.6% growth.

"We are on the precipice of different advertising channels taking lead positions in the local advertising marketplace," said Mark Fratrik, chief economist, BIA/Kelsey.

"Although national and local businesses still utilize a mix of digital and traditional advertising platforms, the opportunities afforded by mobile, social and video advertising are incredibly valuable due to their measurability, adoption by consumers and enhancements by technologies such as beacons and data attribution that blend extraordinarily well with today's mobile consumer." 

Looming Challenge: In-Band Interference TV broadcasters moving to new channels or planning for ATSC 3.0 will need to be aware of the increased potential for in-band and co-channel interference in a changing broadcast environment. A new generation of signal monitoring and analysis tools significantly exceeds the capability of more traditional methods for diagnosing and managing these challenges. Here are details.

The top five recipient of the local ad spend in 2017:

• Direct Mail: $37.1 billion (25% share)
• Local TV: $20.9 billion (14% share)
• Online / Interactive: $18.6 billion (11% share)
• Newspapers: $16 billion (11% share)
• Mobile: $16 billion (11% share)
• #6 - Local Radio: $15.6 billion (10% share)

"Mobile has replaced radio in the top five media this year, but the dominant player continues to be direct mail," said Fratrik.

CBS Radio Lost $552 Million in 2016 + Are You Challenging Your Salespeople?

Radio Ink

July 13, 2017

That’s according to a new document filed with the SEC by Entercom, showing CBS’ statement of consolidated operations, as it moves closer to merging with CBS radio and taking over its 117 stations in 26 markets.

The document shows that CBS Radio lost $552.4 million on $1.2 billion in revenue in 2016, the company lost $132.7 million on $1.23 billion in 2015 and it made $178 million on $1.3 billion in 2014. Costs and expenses at the company went from $1 billion in 2014 to $1.47 billion in 2015 to $1.8 billion in 2016. Entercom CEO David Field has said there will be $25 million in synergies when the companies merge and the revenue will be approximately $1.7 billion.

Wells Fargo analyst Marci Ryvicker recently stated that “CBS Radio’s underperformance vs. the industry and Entercom seems to have resulted from poor management vs. station portfolio or brand.” And she believes Entercom can turn that around within 12 months.

A major expense for both 2015 ($322.7 million) and 2016 ($482.9 million) were impairment charges on FCC licenses. If you’ve never heard of that, here’s exactly what that means, straight from the SEC filing document…

For 2016, the Company performed a quantitative impairment test of FCC licenses in all of its markets. This impairment test compares the estimated fair value of the FCC licenses by geographic market with their respective carrying values. The estimated fair value of each FCC license is computed using the Greenfield Discounted Cash Flow Method (“Greenfield Method”), which attempts to isolate the income that is attributable to the license alone. The Greenfield Method is based upon modeling a hypothetical start-up station and building it up to a normalized operation that, by design, lacks inherent goodwill and whose other assets have essentially been added as part of the build-up process. The Greenfield Method adds the present value of the estimated annual cash flows of the start-up station over a projection period to the residual value at the end of the projection period.

The annual cash flows over the projection period include assumptions for overall advertising revenues in the relevant geographic market, the start-up station’s operating costs and capital expenditures, and a three-year build-up period for the start-up station to reach a normalized state of operations, which reflects the point at which it achieves an average market share. The overall market advertising revenue in the subject market is estimated based on recent industry projections. Operating costs and capital expenditures are estimated based on both industry and internal data. The residual value is calculated using a perpetual nominal growth rate, which is based on projected long-range inflation in the U.S. and long-term industry projections and for 2016 was 1.0% for each radio station. The discount rate is determined based on the average of the weighted average cost of capital of comparable entities and for 2016 was 8.50% for each radio station.

For 2016, the Company concluded that the estimated fair values of the FCC licenses in 23 radio markets were lower than their respective carrying values. Accordingly, the Company recognized a pretax noncash impairment charge of $322.7 million related to FCC licenses in these markets. For the remaining two radio markets, the Company concluded that the estimated fair values of FCC licenses in each market exceeded their respective carrying values and therefore no impairment charge was necessary.

For 2015, the Company recognized a pretax noncash impairment charge of $482.9 million to reduce the carrying value of FCC licenses in 18 markets to their fair value. The charge included $39.6 million to reduce the book value of KFWB(AM) in Los Angeles to its fair value. KFWB(AM) was classified as held for sale at December 31, 2015.

Are You Challenging Your Salespeople?

July 12, 2017

(By Dex Allen) The budgets are done, so now the hard questions begin. You and your sales managers have your revenue budgets, they’re yours — you own them! Of course, it was a bit of an arm twisting with corporate because their numbers are always more than yours. But after the negotiation you agree on the budgets. So now the first question: Do you have the talent on your sales team to hit your numbers?

If you and your Sales Managers aren’t sure, now would be a good time to find better talent. Today! Here’s a good place to start: Look around your market — what sellers selling for your competitors are killing you on the street? And how can you get them on your team? Is it a bigger list? A better commission plan? A bigger base salary? What’s the “on-button” to get this guy or gal on your team? Be creative, and give this all-star seller a reason to join your team. Maybe you have better and easier-to-sell formats and you can sell he or she on that opportunity to make more money.  Bring all the tricks out of your bag because this great seller can make your life a lot easier.

Don’t put off improving your sales team because it’s difficult and takes time. And remember, it’s always difficult to let people go, but why wouldn’t you let a seller go if you could replace he or she with someone better? Make that decision now before you’re well into the year and you’re missing your numbers.

Next question: Do you have enough sellers to make your numbers? If you’re selling a five-station cluster, you certainly need more than five or six sellers. Remember, an average sales team for a five-station cluster probably has two top producers, three or four mid-level producers, and at least three entry-level “newbees.” Nine sellers or more. It’s always better to over-recruit than under-recruit.
Look for new sellers in a couple places. The Yellow Pages is a great place to find well-trained sellers who will love the idea of radio. Maybe the local newspaper is a good place to recruit. Ask around. Ask if the copy machine seller who calls on you is interested, as they generally don’t make much money. Recruit, recruit, recruit, all day every day.

Lastly, do you have two to three great sellers you can count on to exceed their individual goals? Challenge them to do this. They are usually quite competetive and love the challenge.
These are the questions you must be asking before the year gets too far along and you’re missing your numbers. If you’re not asking these questions, it says something about your leadership skills.
Is your programming department overstaffed or understaffed? If you’re managing a cluster of stations with separate formats, in many cases you have one or two PDs programing all stations — and that’s actually too few PDs programming too many stations !

Too often, budgets cuts leave you in this situation or a predecessor made that decision. In cases where these budgets cuts are adversely impacting your product, takes steps to correct it and don’t let cost-cutting drive your strategy to correct this. Sit down with ownership/corporate and sell them on why and how this is hurting your on-air performance and what you are certain needs to be done to protect the on-air product.

This may cost more money, and if it does, stick to your guns and find the money somewhere else if it means you have to sell ownership on your plan!

Now ask yourself: Are you satisfied with the structure and performance of your office staff, accounting and traffic personnel? Getting timely and accurate info on traffic and inventory issues? Hold your Sales Manager accountable for this all-important function so that he/she is maximizing your rate structure and inventory management.

Are you getting timely and accurate information from your business manager on your station’s monthly P&Ls? You should have this by the 15th of the month following the month that just closed. Don’t have it? Hold he or she to a higher standard and get it every month. It’s pretty hard to manage expenses when you don’t have timely P&L info every month. Make sure your Business Manager is giving you the tolls you need to manage the business. The message here is take stock of the people you have and make the tough decisions early, before someone up the corporate ladder starts asking you questions.