Nielsen To Get Digital Consensus From 4A’s. And, Lew Dickey Out at Cumulus as CEO

INSIDERADIO
September 30, 2015

The ad agency community is about to break its silence on digital audio measurement. The 4A’s (American Association of Advertising Agencies) will voice its position on what metrics it would like to see in Nielsen’s long-delayed streaming audio measurement service within a couple of weeks, according to an agency exec who serves on the trade group’s local broadcast committee. There’s been a lot of heated contention," Jennifer Hungerbuhler, executive VP & managing director, local video & audio investment, Dentsu Aegis said at Tuesday’s RAIN Summit Atlanta. "The industry has been waiting to hear the agencies speak," she said. "It took us a little bit of time to all get together, all get aligned," but the committee, she added, had numerous conversations with Nielsen, iHeartMedia and Pandora "to take into consideration everyone’s point of view." While she wouldn’t say what the association’s position would be, Hungerbuhler said she personally feels that a radio station’s combined on-air and online audience should be part of the metrics. "We have to understand what is that total audio audience that we can buy," she said. Nielsen has said a lack of consensus among the larger radio broadcasters and digital pureplays on which metrics to use has held up the launch of the service. Digital audio, meanwhile, has become a growing part of Dentsu Aegis’ audio placements, now accounting for 10%-15% of its total audio budget, up from 3%-5% just a few years ago. "We can attribute the increase to having data showing that in the last 5 years, the audience has doubled and tripled," Hungerbuhler said. "But until we see another large spike in listenership, I don’t think we will see another large spike in spending."

Ad Week—Millennials Love Radio’s ‘Authenticity.’

Tuesday at New York’s Advertising Week titled, "Why Millennials and Gen Z Are Listening More," the Millennial demographic was called out and characterized as lapping up all things audio. "Millennials are probably the most misunderstood generation by marketers. So often we get it wrong," said moderator Gayle Troberman, executive VP & CMO at iHeartMedia.

 

One misconception is that the demo doesn’t tune into FM radio. Not the case, Troberman said. "The biggest mass medium for Millennials is radio, which just surpassed TV. That’s a pretty shocking turn of events. Smartphones are No. 2 and TV is No. 3," Troberman noted. "In the car, people feel like they’re having a live conversation [with radio], because they have to put down their smartphones when they’re driving." She said that 93% of Millennials listen to radio, 2.5-3.5 hours a week. Added panel co-participant, and iHeartMedia host and radio/TV media mogul Ryan Seacrest, "There is an intimacy and authenticity to radio. There is a direct line of communication that is unvarnished, and I think Millennials appreciate that. That certainly resonates with an audience that likes to feel like they’re being talked to naturally." The pair also discussed aligning brands with live events to tie into radio’s strengths. "Integrating live experiences and amplifying and sharing the stories—such as the iHeart Radio Festival—reaches all walks of life, all walks of music. It’s become a massive cultural event," Seacrest said. As a result, the social media outreach surpassed that of the Super Bowl Halftime Show and was up in Oscars territory—which means the event presents unprecedented opportunities for advertisers and marketers.

Lew Dickey Out of Top Cumulus Post. In a major management shakeup following weeks of speculation, Cumulus Media has replaced longtime CEO Lew Dickey with board member and veteran magazine publishing executive Mary Berner, effective October 13. Dickey, the company’s founder, will become vice-chairman and continue as a director. The news dominated conversation at the RAIN conference Tuesday in Cumulus Media’s home Atlanta market. Dickey’s brother John, executive VP of content and programming, has exited his position at the company. Senior VP of content & programming Mike McVay will be taking over his responsibilities while the company looks for a replacement. The founder put as positive a spin on the events as possible, saying that when he founded Cumulus in 1997 his goal was "to create the nationwide platform we have today." But after nearly 19 years of serving the company day-to-day, the last 16 as CEO, "now is the right time for me to transition from CEO to vice-chairman. I look forward to working with my fellow board members to support our new CEO." Berner joined the Cumulus board in May. She has a 30-year history in the magazine business, most recently as president and CEO of the trade group MPA—The Association of Magazine Media. From 2007-11, she was CEO of Reader’s Digest Association and, before that, CEO of Fairchild Publications. Her publishing career includes executive positions at Glamour, TV Guide, W and Women’s Wear Daily, among other publications. In a statement, Cumulus board chairman Jeffrey Marcus called Berner "a proven executive" known for "driving results in multiplatform advertising and content-driven businesses." Marcus said Berner "has demonstrated an ability to turn around a company’s performance and build value for shareholders." Most pointedly, Berner led the company’s recent Operations Review Task Force, which is expected to guide Cumulus as it works to improve its operating performance. On the Record—Berner gives her perspective on Cumulus’ strengths and challenges, at InsideRadio.com.

Cumulus Losses Lead To Reshuffled Top Team. Cumulus board chairman Jeffrey Marcus pulled no punches when announcing the elevation of Mary Berner to replace longtime CEO Lew Dickey. Crediting Dickey and the Cumulus team with building "a formidable national and local footprint," Marcus said, "maximizing the value of these assets requires making them work together effectively and efficiently." "At a time when the media landscape continues to undergo seismic transformation, Cumulus needs a broad-based media operator who can leverage its outstanding resources—from its core strength in radio to its growing presence in digital, experiential and other emerging platforms—and capitalize on the industry’s strong fundamentals." Marcus cited Berner as just such a "leader for Cumulus." Marcus, who was named non-executive chairman in April, is a partner with Crestview Partners, the largest stockholder of Cumulus. Stock numbers have been the company’s undoing of late. Cumulus stock has lost 84% of its value this year. The stock closed at 68 cents yesterday, down from a 52-week high of $4.51, following a week where its share price dropped to a six-year low. The ouster news continued that fortune as Cumulus stock fell 5% in after-hours trading. "We know there is much work ahead of us, but we are confident that with the depth and breadth of talent that Lew has assembled in and across Cumulus, working under Mary’s leadership, we can leverage our outstanding assets and capitalize on the industry’s solid fundamentals," Marcus said in a memo to employees. Those employees are circling October 13 on their calendar, the day when Berner will host an all-employee webcast. The shakeup follows weeks of rumors about the company. While John Dickey’s contract was due to expire November 29, Cumulus had just signed a multiyear contract extension with Lew Dickey in April, to continue as president & CEO and a member of the board through 2018.

Gen X Marks the Top Spot In Consumer Affluence. Generation X—one of radio’s most influential demographics—now represents the country’s most affluent generation. According to the new 2015 Ipsos Affluent Survey USA, 37% of Gen Xers (adults 35-49) rank as "affluents," meaning adults in households with at least $100,000 in annual income. The demo is followed on the list by Baby Boomers (adults 50-69), 33% of whom are affluents; Millennials (18-33), with 25% hitting that income threshold; and Seniors (ages 70+) at 5%. It’s a good tie-in for radio, considering that Gen Xers consume an average of 16 hours per week of radio programming, according to Nielsen. Country ranks as their top format and morning drive (6am to 10am) their favorite daypart. There are 14.8 million Gen Xers in the U.S., and 68% of them work full-time, making them prime targets for radio tune-in. The Ipsos survey defines "affluents" as desirable, high-end consumers who spend $2.7 trillion dollars annually on automotive, home/garden, personal insurance, travel, education and electronics. Among these high-end households, Millennial affluents are the heaviest consumers of social media, spending an average of 10.4 hours per week on various platforms, nearly double the average 5.5 hours for overall affluents. The Ipsos survey found younger Gen Xers, (under 40) behave more like their Millennial counterparts, particularly regarding social media, entertainment trends and organic food. For instance, the survey found 74% of younger Xers "prefer to stream music online instead of buying CDs or downloaded music," compared to just 45% of older Xers. For their part, Baby Boomers are still influential, desirable consumers, posting the highest median household net worth of $913,000, surpassing the average for Gen Xers ($552,000) and Millennials ($516,000).