Radio Too Strong To Be ‘Under-Monetized’—iHeart Exec.

INSIDERADIO

Recent Nielsen data showing radio surpassed TV in the first quarter as the nation’s top reach medium is likely to be a talking point during second-quarter earnings season. Rich Bressler, president, COO & CFO of iHeartMedia, used that finding during the company’s results call yesterday as evidence that radio is "under-monetized as a medium." The new info, along with a Nielsen study from last year that showed radio delivered a 6-to-1 return on investment, was cited by Bressler as an important data point in demonstrating the medium’s power "as we continue to close the gap between radio’s consumer scale and engagement and its much lower share of advertising spend." Nieslen data shows two-thirds of radio listening occurs out-of-home, while 66% of mobile media is consumed in-home, stats Bressler used to reinforce radio’s position as the "original mobile medium" at a time when marketers continue to shift dollars to mobile. Bressler also said the company is talking to advertisers about the power of sound. "Consumers are becoming increasingly mobile and we continue to take this message out to advertisers to help them understand why radio should become a bigger part of their media mix and why they should be asking themselves what is our company’s sound strategy?"

Proactive Study Suggests Radio’s Role in Online Purchasing Power. A customer may be buying skin care products online, but that doesn’t mean online deserves all the credit for setting up the sale. This comes according to new analysis of skin care product line Proactiv by AdAge, which suggests radio and TV play an important role as an online purchase table setter. The numbers indicated that traditional media advertising is vital to online shopping. Proactiv, owned by Guthy-Renker, is a heavy direct marketer and uses online, TV and radio to promote its sales. With both direct marketing and traditional product advertising, conventional wisdom often says that the last medium to deliver an advertising message can drive a sale. That concept of recency has long been one of radio’s major selling points, particularly given its ability to reach listeners in their cars on their way to stores. In online advertising, the equivalent is clicking through on a search ad, or "last-click attribution," which gets credit as the driving force for an online sale. Skeptics have long argued that online purchasing decisions are much more complicated, akin to the salesman who does all the work with one customer, only to see another salesman swoop in to get the final sales commission. A look at Proactiv’s online sales by Facebook’s Atlas ad serving and analytics unit, published in AdAge, suggests the theory isn’t quite so cut and dry. Atlas found that while 43% of online sales came directly from clicks on a display ad, with 41% coming straight from search ads, another 16% of sales came from a mix of the two, meaning the buyer searched for a product after first getting the idea from a separate display ad. First Responder: See how radio’s ad influence might fit into this mix at insideradio.com

Second-Year Spend Crucial For Success—Nielsen. Anyone in radio sales looking for a good stat to suggest the advantage of a long-term contract received a gift that keeps on giving from Nielsen. According to a new research report, successful growing brands are the ones that maintain 94% of their year-one media spend into the second year—a crucial stat compared to brands that don’t. In the report, Nielsen asserts that sales for 55% of all new products start to slide as they enter the second year in the market and by year three, 69% of all new products experience declines. The measuring giant’s new "How to Succeed In Years Two and Three" study also says that among businesses that start to falter, the majority see sales decline of 30% or more following year one. The way to prevent that? Keep your year-two media spend just about what it was in year one, when new businesses usually spend the most. Brands that decline tend to cut their budgets 80% in year-two, on average. The ones that don’t maintain that year-one growth, leading Nielsen to further suggest that it might be better to delay second-year product launches to spend the money making sure the original product line gets solid year-two support. The research is based on 600 case studies.