HD Radio Seeks Tipping Point With New Deal.

INSIDERADIO
September 8, 2015

Like many a new technology that’s reliant on the budgets and public acceptance, HD Radio has long been criticized for taking too long to reach a tipping point among consumers. More than a decade after launching, it is now found in 35% of new cars—about half that of satellite radio which debuted in late-2001. But the DTS deal may change that. The slow ramp-up has been a concern for Barrington Research Associates analyst Jim Goss. During Wednesday’s call with analysts to discuss the acquisition of iBiquity Digital by DTS, Goss brought up what he called "a lot of resistance on the part of some of the automakers" and asked if there was any limit on how many cars HD Radio might be put into. DTS president and CEO Jon Kirchner said initial resistance when building ecosystems isn’t unusual. As consumer benefits become established and competitors install the technology, ecosystems typically expand. "It may have taken a longer time to get here but as we sit here today we believe the prospects are very positive looking out five to 10 years," Kirchner said. Bob Struble, president and CEO of iBiquity, said he wouldn’t characterize it as resistance but more of building to critical mass. The trend of automakers installing center-stack infotainment systems with screens that display rich visuals plays to one of HD Radio’s strengths, he added. "Those trends are very much in our favor and I think we have overcome a lot of that resistance," Struble said. "We certainly see no shortage of runway in front of us and that number—pick it—is going to be 85%, 90% or 95% ultimately."

Live Endorsement Data Proves Value of Trust. Live read endorsement ads from on-air personalities were 40% more effective at generating leads than produced spots in a radio campaign for Blue Cross, according to a case study from Cumulus Media. The live endorsements ads also performed 10% better than pre-recorded personality endorsements ads. The case study offers further validation of the power of endorsements ads, which typically command a higher premium from advertisers than produced spots. The goal of the radio campaign for Blue Cross Blue Shield was to reach millennials and elicit a direct response. Ad agency Meers Advertising in Kansas City created a program using a couple of things millennials are known to have an affinity for—texting and popular radio hosts. The ads delivered a call to action asking listeners to send a text message for more information. Those who did received a reply text containing a link to an online form, which once filled out, would inform them how much money they would qualify for under the Affordable Care Act to help them purchase health insurance. The live reads averaged 250 leads per week, thus 10% better than pre-recoded endorsements and 40% better than produced spots. "The affinity the DJs have with the listener is what really drives response," Meers Advertising CEO Sam Meers said. The case study reinforces an early 2014 Clear Channel-commissioned survey by the University of Southern California, which found more than half of survey participants said they trust brands, products and services that a personality talks up. More than 60% said they are likely to talk about what they’ve heard, potentially extending the reach of a live endorsement to social media.



Inside Story: New Nielsen Data Helps Radio Play Politics. One of the biggest radio developments for the current presidential campaign comes with Nielsen Local Political Ratings, a service that uses Nielsen PPM numbers and twins them with Experian Simmons PoliticalPersonas consumer data, with a third party putting the results together. Both political parties increasingly use a version of this for rating voter data, and it all allows radio to tap into data-driven targeting. The Local Political Ratings allow campaigns to boil down key voting segments, organizing PPM panelists by address, and targeting by market, station, format and daypart. It will give radio a chance to boast of the kind of pinpoint voter ad accuracy digital does. So far, a handful of radio groups, including Emmis Communications, have said they will use these Nielsen numbers, which identify listeners by 10 specific profiles, from "Super Democrat" to the left to "Ultraconservative" on the right, and include "Unconnected and Unregistered" and "Informed and Unregistered" as well. Nielsen has done pilot testing of the data in the Philadelphia and Los Angeles radio markets to show how many ways it can be sliced and diced. "The markets have dramatically different profiles," says Brad Kelly, senior VP and sales director for Nielsen Audio. "The data vary not only from station to station in markets, but daypart to daypart. You see the data come back and you say, ‘Holy mackerel.’…Now we can combine radio’s enormous reach with real targeted data." Rick Cummings, president of programming for the radio division of Emmis, says the station group doesn’t plan at this moment to use Nielsen Local Political Ratings at every station or market where it owns stations, but will test it this fall with an option to expand by next year. "This is Big Data we haven’t had before," Cummings says. "With TV viewing declining and people DVRing past ads, it’s an opportunity for us."