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Radio Results Best in a Decade

Reprinted from KenRadio.com

Reflecting growing signs that the U.S. economy is back, radio delivers its best results in quarter-to-quarter revenue comps since Q1 2007 with a +6% overall increase to $3.687B. In fact, this gain represents the highest posted in nearly a decade, accounting a report by the The Radio Advertising Bureau which surveyed more than 6,000 member Radio stations in the U.S. and over 1,000 member networks, representative firms, broadcast vendors, and international organizations.

Eastern Region outpaced the rest of the nation in ad spending gains for Q1, up 12.7% - followed by the Southwest and Central Regions, up 9.7% and 6.7%, respectively. Spending is up but trails nationwide growth in the West (4.5%) and South (3.5%). The growth in this recovery is showing signs that Radio’s momentum is outpacing that of other traditional media. This gain underscores Radio’s inherent strength with advertisers demonstrating renewed enthusiasm for spending in our medium.

Communications / Cellular / Public Utilities, a strong category for Local and National Spot Radio throughout the past year, regains the top spot in Radio spending in Q1 ‘10, at $350.5M - an increase of 5.7% over a comparatively strong showing in Q1 ‘09. Battling cellular services AT&T ($108.3M) and Verizon Wireless ($104.1M) dominate the sector, comprising approximately 61% of total spending. A huge boost in spending by its leading advertiser Comcast Cable (+32%, to $60.9M) propelled Television/Networks/Cable Providers into Radio’s #2 rank for Q1 2010, up from 3rd in Q1 ‘09. The category grew 23% overall, to $276.2M.

TV broadcasters, cable networks, and access providers increasing spending to contribute to Q1’s impressive gain include:

- ABC-TV Network (+105%, to $31.6M)
- NBC-TV Network (+321%, to $29.3M)
- USA Network (+429%, to $11.7M)
- CBS-TV Network (+121%, to $10.5M)
- Charter Communications Cable (+42%, to $9.0M)
- Cablevision (+132%, to $5.3M)
- Telemundo (+309%, to $5M)
- Cox Communications Cable (+45%, to $3.5M),
- ESPN (+107%, to $3.1M)
- HBO (+98%, to $2.2M)

With year over year spending virtually flat, the Restaurant category flips from 2nd in Q1 ‘09 to #3 this year, at $260.4M. McDonald’s remains Radio’s third-largest advertiser for this quarter, at $71.7M. Major competitor Wendy’s Radio spend of $22.8M represented an increase of 18%.

The automotive industry’s turnaround has been prominently in the news over the last several months, and the sector’s spending on Radio is also rebounding. The Automotive category’s very positive +39% uptick to $230.6M is cause for optimism for the year ahead. As in Q1 2009, Automotive occupied the #4 rank for spending this quarter.

Lower in the spending ranks but also using more Radio to broadcast their sales appeals in Q1 were:

* Ford Motor Corporation (+18%, to $5.3M)
* Infiniti Motor Corporation (up nearly six-fold, to $4.3M)
* Honda Motor Company (+98%, to $3.2M)
* Mazda Motor Corporation (at $2.7M, up from $60.5K)
* Hyundai Dealer Association (+49%, to $2.2M)

Financial Services moves into Local and National Spot Radio’s Top 5 this quarter with expenditures of $191.6M, up by nearly 50% from last year’s Q1 spend of $129M (#7). An analysis of the top Q1 ‘10 Radio spenders finds a new order, with several smaller and/or regional banks moving into the top ranks:

* JPMorgan Chase emerges as the leading Financial Services category advertiser (was #2 behind Citibank last year) increasing its Radio investment by 138%.
* Chase is also tied with Communications advertiser MetroPCS as Radio’s 6th largest spender overall for the quarter.

Other major financial service accounts that added Radio dollars in Q1 are:

* PNC Bank (+59%, to $15.1M)
* Wells Fargo Bank (+53%, to $13.4M)
* Capital One (up nearly six-fold, to $11.4M)
* Fifth Third Bank (+75%, to $11.3M)
* Bank of the West (at $6.3M, from $604K)
* American Express with a $20.5M commitment versus just $24.9K last year

Despite an impressive 27% increase in spending, Groceries dropped to 6th place in overall Q1 Radio spending, at $187.2M. Top category spender Safeway ranks overall as Radio’s 4th-largest Q1 advertiser at $60.5M, an increase of 63% over Q1 2009. Additionally on radio:

* Kroger Food Stores (+14%, to $27.7M)
* Supervalu (+4%, to $13.7M)
* Fresh & Easy Neighborhood Market ($7.5M, from $783K - up nearly nine-fold)
* Trader Joe’s (+29%, to $7.1M)
* A&P Supermarkets (up six-fold, to $5.1M)

Insurance companies spending in Radio’s #7 sector was flat at $139.1M, though the category is significant in that it is led by 5th-ranked Radio advertiser GEICO ($40.5M in Q1 2010). Increasing competition for low-rate automotive coverage appears to be a major factor in Radio sustaining dollars in this category:

* State Farm Insurance (+151%, to $26.9M)
* Progressive Insurance (+212%, to $11.1M)
* Safe Auto Insurance (+37%)
* Esurance (+51%, to $3.1M)
* Titan Auto Insurance ($3.2M, up from $3.7K last year)

Growing consumer optimism has generated a building boom for home fix-up retailers in the early months of 2010, and the major players in the category have added to their Radio budgets as they compete to attract customers to their stores. Radio’s revenue from Home Improvement advertisers grew 18% over Q1 ‘09 to $31M, with added spending by all four major players.

Digital Place-Based Video is Growing and Evolving

Reprinted from KenRadio.com

More than 70% of the U.S. population, or 181 million, have viewed a digital video display out of home in the past month, while 52% of the population, or 135 million, have viewed digital video display in the past week. Digital video in public venues reaches more Americans each month (70%) than video over the Internet (43%) or Facebook (41%). Display out of home video dwarfs many prominent new media and marketing platforms. More teens and adults have seen a digital video screen at a public venue in the past month than have watched online video. More people see digital video screens in public venues than have ever sent or received a text message, own a DVR, such as a TiVo or recorder provided through their cable or satellite TV provider, or have a Facebook profile, according to a new study by Arbitron.

Viewers are engaged with the content, with 47% of those who have seen a digital placebased video in the past month specifically recall seeing an ad. 19% of those who have seen a digital video ad say they have made an unplanned purchase after seeing an item featured on the screen.

Video displays in grocery stores, visited by 97% of the population, get the most notice with 72 million viewing a display in the past month. Displays in shopping malls are viewed by 70 million, followed by large retail or department stores, medical or doctors’ offices, and movie theaters.

Though the movie venue was No. 5 overall, it ranked number 2 among teens, after shopping malls. For reaching Adults, the top three venues were grocery stores, large retailers, and shopping malls. The least-viewed display out of home venues were elevators and buses, trains or taxis.

Many public places now have digital video displays. These video displays look like television screens, but rather than broadcasting regular television stations, they feature short programs and advertising relevant to products in the store. For example, a video display at a local grocery store might show food items for sale, while a video display in the lobby of a local movie theater might show the trailer for an upcoming movie… I’d like you to tell me whether or not you have seen a digital video display… recently…specifically digital video displays… NOT to include TV stations you might have seen on a regular television screen at one of these locations.

What Makes Social Media Trustworthy?

Venues and relationships affect how social media users perceive advice - Reprinted from eMarketer.com

One thing that makes social media marketing powerful is consumers’ trust in “people like them”—their friends, family and other online peers. Marketers want to tap into that trust through the power of earned media or by engaging in a conversation with consumers, but where social conversations take place has an effect on their perceived trustworthiness as well as who is taking part in them.

A study of frequent social media users by market research firm Invoke Solutions found that the most trusted information was posted by people respondents knew. But blog posts were more likely to be trusted “completely” than posts on Facebook, and trust dropped off sharply when it came to Twitter, even among friends.

Postings by brands or companies were trusted less, but levels were similar whether companies posted to Facebook or blogs. Online community sites did not hold the same trustworthiness as Facebook or blogs, whether postings were made by companies or fellow members, and respondents had an even more skeptical eye for independent bloggers. And across all categories of content creator, Twitter streams were trusted less than other media.

Asked to rate what was most important to making social sites trustworthy, users’ top concerns were that the dialogue be open to both positive and negative comments, the quality of content and the responsiveness of the content creator. These all point to best practices for companies participating in social media, which must show they are willing to deal with consumer complaints in a constructive way and be authentically involved in the conversation with social site visitors.

Some other seeming signs of authenticity mattered less to users, however, including length of participation and number of participants.

Email Dominates Mobile Web Time

Email, portals stay ahead of social networking—at least on mobile devices - Reprinted from eMarketer.com

Social networking has become such a staple of online activity in the US that, according to Nielsen, internet users spent more time on social networking sites and blogs than doing any other activity in June 2010. Games, which came in second, took up less than half as much time.

On the mobile internet, however, more traditional activities still reign. Email dominated the mobile picture even more strongly than social networking did the desktop: If all time spent on the mobile web was condensed into a single hour, US internet users would have spent 25 minutes in June checking email. Portals would have received another 7 minutes, with social networks not far behind.

Nielsen reported that social networking has been closing the gap in time spent on the mobile internet, gaining share since last year as portals dropped in importance over the same period.

But email remains one of the most popular mobile internet activities not just by time spent but also by penetration. According to the Pew Internet & American Life Project, 34% of all US mobile subscribers used email on their phone in May 2010, compared with 23% who used a social networking site.

comScore also reported mobile email usage via a browser ahead of social networking. That research found search had the highest penetration of any mobile browsing activity, but search is less time-intensive than email or social sites.

Social should continue to make gains in the mobile realm, however. comScore reported it was the fastest-growing mobile internet activity between 2009 and 2010, rising 80% in usage, while email grew more slowly. Bridge Ratings predicted in June that mobile social networking would grow twice as quickly as email during the next 12 months.

The growing penetration of smartphones will be a key factor in increased mobile social networking. According to comScore, 53% of smartphone users participated in social networking activities on the go, compared with just 11% of feature phone owners.

Social Network Ad Spending to Approach $1.7 Billion This Year

6.7% of all US online ad spending to go toward social networks this year - Reprinted from eMarketer.com

Social network advertising is getting renewed attention in 2010. The US’s gradual economic recovery, combined with marketers’ incessant focus on reaching consumers in social media, has led companies to make big increases in social network ad spending in the first half of 2010.

eMarketer estimates US advertisers will spend $1.68 billion on social networking sites this year, a more than 20% increase over 2009. Spending will rise even further by 2011 to more than $2 billion.

In December 2009, eMarketer forecast $1.3 billion in social network ad spending for 2010. Strong performance from online ad spending in general, and Facebook in particular, has resulted in the increased forecast.

Facebook will receive half of all social network ad spending in the US while MySpace continues to diminish in importance. Twitter, which finally launched its ad business earlier this year, is incorporated into eMarketer’s forecast for the first time. While spending on the microblogging service will be low in 2010, the potential for 2011 and beyond could be dramatic if it proves that its “resonance” model of measuring advertising effectiveness works.

Spending on social network advertising will grow even more quickly elsewhere in the world. In 2010, eMarketer estimates just over half of social network ad spending worldwide will come from the US, but 2011 will bring a reversal in that proportion.

Another important development in the social network space is the role of online social games and applications. Advertising is not a primary revenue stream for game companies such as Zynga or Playdom, but their large audiences are drawing the interest of marketers. eMarketer expects such companies will attract $293 million in spending worldwide in 2011, up from $220 million in 2010.

Web Most Effective Way to Reach Local Audiences Worldwide

Local websites rule while social sites stay on hold - Reprinted from eMarketer.com

Social media has increased its importance around the world, and while social network advertising continues to grow quickly in the US, spending in other markets is set to rise even faster. But brand marketers still don’t feel social media is the most effective way to reach their international audiences.

A June 2010 survey conducted by Harris Interactive for social marketing platform Buddy Media found that more than 90% considered it at least somewhat challenging to reach audiences in local markets with a unified brand message.

The most popular tactics used to market to local audiences were websites with local content (69%), print ads (62%) and event promotion (59%). Less than half of respondents used social media fan pages for this purpose, and less than one in three used paid social media advertising. Websites with local content were considered the most effective tactic, named by 30% of brand marketers, compared with just 10% who thought fan pages were best.

The top obstacle to using social media to reach local markets was a familiar one: measuring success. But other, more mundane concerns also caused trouble. Brand marketers said it was difficult to manage information, engage users, identify influencers and keep fresh local and regional content available.

“In order for bands to effectively reach consumers across the globe, they need to heed the traditional marketing/PR maxim of thinking global and acting local,” said Michael Lazerow, CEO and Founder of Buddy Media, in a statement.

Marketers do believe the global potential is there for social media, with nearly three-quarters saying the channel would be a good way to reach existing and potential customers in local marketers—but they must learn to leverage it first.

Targeting Parents with Mobile Alerts

Busy parents of young children seek to simplify with mobile - Reprinted from eMarketer.com

Marketers looking to convince mobile subscribers to opt in to SMS marketing campaigns should look to target parents, especially those with young children, based on research conducted by Harris Interactive for mobile marketing platform Placecast.

The May 2010 survey found that among US mobile users with children, 33% were at least somewhat interested in receiving mobile alerts from their favorite merchants. Among those without children, just 26% were equally interested. The age of children in the household also had an effect on user interest levels; the presence of children under 6 boosted interest levels most, while those with teenagers in the house acted somewhat more like couples with no kids.

Parents considered several mobile activities at least somewhat important at higher rates than mobile users without children, including searching for retail locations (57% vs. 42%), making purchases (40% vs. 26%) and accessing the internet in general (63% vs. 48%). Parents are even more interested in participating in foursquare and Facebook on the go.

Most of parents’ desire for mobile text alerts points to time-strapped families looking to save money. Grocery coupons and promotions were the most popular text alert among all parents, including among the subgroups with older children and teens. The biggest interest of parents of the youngest kids was in products like movie tickets. The only promotions that appealed more to the child-free were deals for coffee and travel.

The typical early adopter of consumer electronics may be male, but its families who have the most potential to drive mobile marketing efforts based on opt-in text alerts. While the mobile market will be shifting toward more sophisticated forms of advertising as smartphone penetration increases, with feature phones currently in the hands of 69% of US subscribers, according to Nielsen, SMS campaigns still have the biggest reach.

Are Marketers Struggling to Keep Up with Social Trends?

Marketers are challenged to stay up to date on the latest developments - Reprinted from eMarketer.com

Social media is no longer new, but it’s still a turbulent space. Just a couple years ago MySpace was on top of the world, only to be ousted unceremoniously by crowds flocking to Facebook. Twitter crept onto the scene and then exploded with growth in 2009, putting itself on every marketer’s radar. New trends are developing in the social location-based area, and that’s not counting the seemingly constant mergers, acquisitions, startups and failures.

Little wonder that marketers find it difficult to stay on top of the hottest social media trends. A May 2010 survey from staffing firm The Creative Group found that 65% of US marketing executives considered it at least somewhat challenging to keep up.

“Marketing has always been a field with a constant learning curve, but the shifts taking place today are occurring more quickly, making it especially challenging to keep pace,” said Donna Farrugia, executive director of The Creative Group, in a statement.

Most marketers rely on in-house staff to handle their social efforts, but employees still require adequate training and also the time to keep up with the latest developments and trends among both consumers and their competitors.

The Creative Group found marketing executives relied most on conferences and seminars along with industry networking events to learn about social trends. Relatively few depended on actual social sources such as Twitter, Facebook or LinkedIn, and just 7% said they kept up to date through blogs.

“Networking becomes even more important during periods of rapid change,” said Farrugia. “Many marketers are aware of broad social media trends, but they need nuts-and-bolts information on how to most effectively use new channels. That’s where insight from peers on what worked and did not work for them can be most valuable.”

Behavioral Targeting Brings Clear Benefits to Publishers

But how clear are the advantages to consumers? - Reprinted from eMarketer.com

In May 2010, a DM2PRO and AudienceScience survey found that 72% of responding publishers offered their clients some form of audience targeting other than contextual.

The benefits to publishers of doing so were numerous and spanned a range of revenue-friendly reasons. These included higher CPMs, better performance, the ability to sell more inventory and the acquisition of new customers.

Internet users however, do not see the same positive side of targeting. Almost 72% of US adult internet users were concerned about the extent of information websites were collecting about them, according to a December 2009 Future of Privacy Forum survey. Just 6.5% disagreed.

Another discouraging sign that awareness of behavioral targeting may discourage consumers even more comes from a study commissioned by PreferenceCentral, a vendor that partners with advertisers to allow consumers management of the ads they receive. Respondents’ receptivity to targeted ads decreased after learning those ads were based on tracking their past behavior.

However, two factors in the study were found to alleviate concerns—assurances that the information collected about them was anonymous and non-personally identifiable, and provision of a control solution that allowed them to manage the information used about them.

Marketers must do a better job of marketing this technology if they hope to keep using it. But education may not be enough. Critics note that the information gleaned about users is so detailed it may be “anonymous” in name only. Plus the promise itself of receiving “better” ads may not be the most tantalizing offer for many web users.

If consumers are not given effective controls over how and what is tracked about them, they may believe their only resort is government intervention. The US Federal Trade Commission said it is currently considering a do-not-track list for online advertising, similar to the popular do-not-call list for telemarketers.

Why the Future of Social Marketing is Global

Written by Debra Aho Williamson, Senior Analyst for eMarketer.com - Reprinted from eMarketer.com

eMarketer forecasts that worldwide social network ad spending will rise 31% this year, to $3.3 billion. Next year, spending is expected to increase an additional 29%, to nearly $4.3 billion.

The US accounts for just over half of that total. But in 2011, as outlined in my new report, “Worldwide Social Network Ad Spending: A Rising Tide,” US dominance will start to wane and international social network ad spending will increase more rapidly.

There are several reasons why this is the case.

Social networks are popular in the US, but even more popular in many other markets. According to The Nielsen Company, the social network/blog category reached 86% of active internet users in Brazil in April 2010, and 78% of active users in Italy, for example. Reach in the US was 74%.

Chinese social networks are strong performers. According to the Data Center of China Internet, the number of social network users in the country reached 245 million in 2009, up 34% over 2008. Social networks such as Tencent’s QQ, search giant Baidu’s Baidu Space and RenRen (formerly Xiaonei) dominate usage.

Although China has just over 500 million internet users, according to eMarketer estimates, QQ has even more accounts than that—587 million as of March 2010. Tencent, a public company, reported $141 million in online advertising revenue in 2009 and $30 million in Q1 2010.

Facebook is growing rapidly outside the US. In New Zealand, Hong Kong, Canada and Singapore (as well as in the US), Facebook was the No. 1 website based on market share of visits in June 2010, according to Experian Hitwise.

Homegrown sites are holding their own. In Western Europe and Russia, several midsize social networks have succeeded in maintaining their dominance in their individual markets, even as Facebook has encroached on their territory. In Poland, for example, Nasza Klasa reached 58% of internet users as of spring 2010, making it the No. 3 website, according to Millward Brown SMG/KRC. Facebook did not rank in the top 10.

Hyves in the Netherlands, Odnoklassniki.ru in Russia and Netlog—which is based in Belgium but has a Europe-wide presence—all are continuing to grow. Netlog, for example, has increased its user base to 68 million members as of July 2010, from 56 million in October 2009.

A global buy. As Facebook and other social sites expand their worldwide presence, they will become more attractive to marketers that want to buy ads across multiple markets.

So far, most companies have been focused on the US opportunity. According to a survey of brand managers conducted by Harris Interactive for Buddy Media, 43% used Facebook to reach customers in local markets worldwide. Among the obstacles the brand managers said they needed to overcome were the difficulty of keeping country-specific content fresh, customizing the same content for multiple markets and creating scalable campaigns across regions.