INSIDERADIO
May 14, 2015
Call it a mixed report card for pureplay webcasters in the first quarter. Ad loads went down but the number of advertisers buying the medium went up. That’s according to a new analysis of the commercial loads of five pureplays conducted by ad tech company Xappmedia. The study didn’t include any broadcast streamers, but offers insight into what’s growing in digital radio. Online radio’s ad load declined by an average of 23 to 26 seconds per listening hour in the first quarter, a 13%-15% drop from the fourth quarter. That’s like removing one ad per internet radio listening hour. The average over the two quarters is 2:31 or about five 30-second ads per hour. There was a corresponding 24% decrease in ad units per hour during the same period.Two factors drove the declines, according to the report: a natural reduction in ad spending after the holiday season, and listening growth, which spread ads across more listening hours.The good news for webcasters is the total number of advertisers identified by Xapp grew to 118 in the first quarter, up from 75 in Q4. However the number of advertisers per webcaster varied from as low as ten to as many as 57. Some 165 unique advertisers were identified during the five-month survey period. The report attributes advertiser growth to listening session increases and more advertisers testing the online waters and others making it a core element of their media plan. "The internet radio advertiser base appears to be getting both larger and more diverse," Xapp says. That’s creating an "opportunity for lower revenue concentration risk for audio publishers."
Broadcast radio shares half of its top advertisers with web pureplays.
Broadcast radio and web pureplays share a lot of advertisers. But the amount of sharing appears to be declining. Five of the top 10 broadcast radio advertisers reported by the Radio Advertising Bureau for the fourth quarter were spotted by Xappmedia on internet radio during the first quarter. Comparing Q4 on one medium to Q1 on another is hardly apples to apples. But consider that seven of the top 10 broadcast radio advertisers from 2014’s first two quarters (per the RAB) were among the online radio accounts identified by Xappmedia in its previous study, which covered November through January. Unlike broadcast radio, where local dollars drive the bus, Xapp’s data shows online radio remains primarily a national buy. The percent of first quarter local advertisers increased slightly to 15%. Buyers are also so far reluctant to buy deep online. Of the 165 unique advertisers, 83% appeared in only one publisher app. The remainder appeared on two, three or four apps and no advertiser appeared on every service surveyed. The two advertisers that bought online radio four deep were Geico and NAPA. The percent of ads served that were :30s grew to 79.3% in the first quarter. That caused a sharp drop in :15s, from 22.46% to 7.76%. So what can pureplay webcasters, many of which are losing money, do to improve monetization? Increasing ad loads is one option
but that carries the risk of losing audience in today’s highly competitive environment. "Growing audience and increasing ad rate CPMs will likely be the top priority for the balance of 2015," the report concludes.
RAB to stop reporting quarterly revenue.
Ending more than two decades of quarterly revenue updates for the industry, the Radio Advertising Bureau will no long release status reports on the state of radio sales four times per year. The RAB says it will now put out two reports, a mid-year and year-end update, starting this year. The trade group says it puts the radio industry in line with the reporting schedule of other media. The Newspaper Association of America has dropped its quarterly reporting. But the digital, outdoor, and magazine industries still release data on a quarterly basis. The TV industry doesn’t report revenue quarterly in part because the Television Bureau of Advertising doesn’t publish any revenue figures. The change comes after a difficult first quarter and the industry’s first negative year for revenue since the recession. Some executives have privately suggested the RAB data release has hurt the industry’s image at a time when there’s plenty of upheaval in media. But RAB president Erica Farber says the decision, made by the trade group’s board, isn’t designed to hide any bad news. "We’ve been thinking about doing it for the past three years," she says. The numbers have for years been used by Wall Street to gauge radio. Veteran media analyst Jim Boyle thinks it "discouraging" to see radio follow newspaper’s lead. "How does it look to investors? It raises the red flag high," he says. "If one wants investors to get involved then they need information flow, especially between individual companies’ releases and as a clearinghouse for overall
industry details and trends."
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