When Gray Television announced its $442.5 million acquisition of Schurz Communications’ broadcast assets on Sept. 14, Gray said it had every intention of holding on to and learning from its new radio properties. However, in a reverse move yesterday, Gray said it would spin off the radio stations to three companies for a combined $16 million. “We originally intended to acquire and operate the Schurz radio stations for the long-term,” said Kevin Latek, Gray’s senior VP for business affairs, in a release. “In recent weeks, it became clear that experienced radio broadcasters could better lead these successful radio stations into the future than we could hope to accomplish.” Gray struck the deal with Schurz for its TV portfolio—the three small market clusters in South Bend and Lafayette, IN and Rapid City, SD would have added up to less than 1% of total Gray cash flow on a pro forma basis.
The company said it liked what it saw after meeting with the Schurz radio management team, which explained the promotional value the radio stations bring to its sister TV stations in the three small markets. But sources say Gray, which has no experience running radio stations, got cold feet and decided to sell the stations in pieces to different buyers to maximize its receipts. Latek called the three buyers “stellar family-owned companies” that already operate “similar high-quality radio stations” in nearby markets. “More importantly, each of the buyers shares the passion and vision of the Schurz organization, which ensures that these radio stations continue to serve their audience and employees as well as any broadcast stations in the country,” Latek added.
Marketron Launches Programmatic Ad Exchange. Business software provider Marketron announced Tuesday that it is rolling out its Mediascape Marketplace programmatic ad exchange for radio to 2,900 of its stations. The company says the platform will enable the purchase and scheduling of ad inventory and the delivery of ad creative in real time. As programmatic buying makes it way from digital display and video advertising to traditional media, Marketron says its client stations can use the technology to boost revenue and maximize inventory and that advertisers can use it to buy inventory at a set price. Data to inform the buying process will come from individual broadcasters and from integrations with third parties, including Nielsen, media buying and selling software providers Strata and Mediaocean and cloud-based automation platform Synchronicity.
"Programmatic is here, and it’s just a matter of time before every radio station in America is selling their inventory this way," Jeff Haley, president and CEO, Marketron, said in a statement. "As for brands, it opens up new doors to markets they may never have considered – for the first time, they can take full advantage of radio’s local power." In a demonstration in May, Marketron says it facilitated a programmatic buy for Hubbard, in which the broadcaster published inventory to the Marketplace platform, and Aloft Hotels bought the inventory using a demand side platform.
Inside Story: Native Ad’s Growing Versatility Lures Clients In. How much of a renaissance is native advertising enjoying in radio?
First, the practical answer: Research firm Statista forecasts that native advertising will hit $4.3 billion in the U.S. this year, up from $2.2 billion in 2013. That figure is expected to grow to $7.1 billion in two years. Also, 63% of marketers plan to increase spending on native advertising over the next year, according to the Association of National Advertisers. But that’s only half the story. The other area of growth—cross-platform and digital—has opened up scores of new imaginative possibilities for advertising clients and the radio hosts who will get the messages across. With this incredible growth, stations have become that much more versatile at using on-air, digital and social assets to help sell a brand. On-air, hosts can plug a new couch, then share photos on Instagram of their family lounging on it at home. In Florida, a recent Department of Health anti-smoking campaign featured talent talking on-air about quitting, and information on the station’s website for getting help quitting. All of which has made a kind of advertising whose hallmark is integrating messages subtly (or not-so-subtly) into a discussion more popular and profitable. Stations have themselves evolved into multichannel media outlets, offering greater opportunities to integrate clients. When Radio One’s stations in Houston and Dallas engage in native advertising, "We want to do something special. We want to make sure we’re helping to drive awareness or move product," says market manager Gary Spurgeon. "The connection to the local audience is so unique to radio," said Robin Jones, OMD’s group director for local broadcast, last month at the NAB-RAB Radio Show. "It should be championed."
Greater Integrated Ad Options Ideal For Radio. With the increasing possibilities digital allows in the realm of native advertising, stations and major radio groups are exploring new methods for integrated content—often with clients and agencies involved in initial thinking. iHeartMedia, for example, has launched a standalone group, SoundBoard, to create branded content that taps into all available arenas of station-client relations. "Our proposition was: Let’s bring our iHeart assets together, the client’s brand and the stories they want to tell for different audience segments and let’s create a storytelling platform with audio," says Gayle Troberman, iHeart’s chief marketing officer. SoundBoard recently launched its first branded original audio series with Coca-Cola, "First Taste Fridays." The cobranded podcast introduces teens to new music, all while drinking Cokes with iHeart host Maxwell and musicians. iHeart producers cut the best moments into shorter segments for on-air, online and social media channels. That secondary push, Troberman says, exposes the best moments to a larger audience, upping the value. "It is great, long-form storytelling paired with the mass reach, frequency and predictability of a radio plan," she says, and other clients are interested in replicating the model. At E.W. Scripps, VP of Radio Steve Wexler says his company takes a "360-degree approach," to integrated marketing. In the five markets where Scripps owns TV and radio stations, they offer native campaigns with TV, radio and digital components. And on-air hosts get personal. At "620 NewsRadio" WTMJ Milwaukee, host John Mercure doesn’t just talk about a local travel agency’s tour packages, he goes along. On-air, on Facebook and on Twitter, he invites listeners to join him and offers a discount; about 30 listeners went along recently. "When you can tell a personal story, it’s powerful," Wexler says.
For Success, Native Metrics Must Be Laid Out.
Native advertising may be growing, but its evolution faces a familiar scourge—the challenges in measuring success. Thankfully, station managers and media buyers agree on one key factor—
objectives and metrics need to be laid out from the onset. "There needs to be a key performance indicator on the back end," says Kevin Gallagher, Starcom’s executive VP Local Marketplaces, who adds that clients are "looking for a metric to see if this money was well spent." For digital campaigns, that’s often page views, impressions, shares and likes. Clients may also want to build a user database or collect emails. On-air success is defined by a client’s objectives. If Radio One afternoon hosts Funky Larry Jones and Base Man, on urban AC "Majic 102.1" KMJQ Houston, are talking about their Mattress Firm beds, and local sales go up, the client knows the campaign is working. "Customers will often say that Larry sent them," says Gary Spurgeon, Radio One market manager. However, if a client’s goal is brand awareness or raising purchase intent, station managers say it is harder to measure. One solution, says Gayle Troberman, iHeart chief marketing officer, is to produce high-quality branded content and share it on as many platforms as possible. "Branded content does a good job of moving the needle on affinities and brand perception that lead to purchase intention," she says. Stations also closely monitor who is buying native ads and the pacing of the placements. At Radio One’s clusters in Houston and Dallas, Gary Spurgeon limits the number of product mentions per hour and the categories.
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