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Articles of Interest
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When it launched WEEI Live three months ago, Entercom had modest expectations for the first iPhone application for its powerhouse Boston sports talk station. The company projected the app would be downloaded 20,000 times by the end of the year. But by March 8, downloads had already reached 19,000, causing Entercom to double its projection to 40,000 or roughly 10% of its cume. Less than one month into the second quarter, the number has already hit 32,000. Pent-up demand for streaming access to Emmis rhythmic CHR “Hot 97” WQHT, New York was so strong that the station’s iPhone app has been downloaded 380,000 times since it was released last June. The iconic hip-hop brand, which previously refused to stream its signal, is averaging about 10,000 new downloads per month since December, according to Emmis VP of branded entertainment Ben Finley. Since launching in late 2008, Clear Channel’s iheartradio app has been downloaded 4.9 million times. The AOL, Yahoo, CBS Radio and Last.fm mobile apps have been downloaded more than 11 million times. Those and other often staggering numbers reflect the growing adoption rate of smartphones and how they are being used by Americans to consume streaming content. The share of smartphones as a proportion of overall device sales has increased to 29% for phone purchasers in the last six months, according to a report by Nielsen issued in late March. And 45% of those surveyed indicate their next device will be a smartphone. Forecasting smartphones will eclipse regular cell phones by the end of 2011, Nielsen says “the beginning of a groundswell” is being driven by falling prices, increasing phone capabilities and an explosion of applications. “We are just at the beginning of a new wireless era where smartphones will become the standard device for consumers,” Nielsen says. Jacobs Media’s latest Technology Poll shows “smart phone usage is exploding,” according to Jacobs Media president Fred Jacobs. Since launching last year, the consultancy’s JacApps division has designed customized apps for approximately 130 radio brands. “Of all the different media, smartphones have the advantage of being portable, personal and always on,” Jacobs says. “Those attributes make this an exciting space for radio. All of a sudden we have the coolest, hottest devices out there that can carry our brands.”
“Mobile is the battlefield for the next generation of fans.” For the 43 million Americans who listen to online radio every week, the experience is still largely one that takes place at work where employees can stream for long periods of time from their computer. But that’s changing. Between 10% and 25% of online listening is occurring on mobile devices, according to terrestrial broadcaster estimates. And those percentages are expected to continue to rise in lockstep with growing smartphone penetration. WEEI.com VP/GM Tim Murphy estimates that 8%-15% of WEEI’s total station listening is via digital streams. Of that, 10% occurs on mobile devices. “It’s so nascent and it’s happening so fast that those numbers may be irrelevant next week,” Murphy says. “At this moment, there are probably 6,000 people listening to WEEI on a digital stream — a significant addition to the terrestrial AQH that makes it a much more valuable buy to an advertiser.” After launching its iRadioNOW app in late September, roughly 11% of Beasley’s online listeners are now accessing its streams through mobile devices, the company says. And Clear Channel estimates that 25% of its digital listening occurs on mobile devices. Including mobile data for pureplay webcaster Pandora for the first time goosed its Average Active Sessions for the primetime Monday-Friday, 6 am-8 pm streaming daypart from 251,066 in November to 324,508 in Ando Media’s December ranker. Since then, Pandora usage has consistently grown by leaps and bounds: 330,456 in January and 361,076 in February. “The iPhone has been the real lynchpin for us,” Pandora founder Tim Westergren says. “But consumption on BlackBerries is catching up and new sign-ups via Google’s Android platform are “growing like a weed,” he says. Station apps are also making radio hip again among younger listeners. “There’s no doubt that mobile is the battlefield for the next generation of fans,” Murphy says. “If you want to hold the same position in the media pie 20 years from now, you need to be on the consumers’ first or second page of favorite apps — just like you want to be a preset on the radio dial in the car. We have to get there early and get people in the habit.”
Station apps are evolving to offer more functionality and “stickiness.” Red Sox fans that missed that interview with team manager Terry Francona when it aired on WEEI can grab it anytime they want off their iPhone and listen when it’s convenient for them. On an average day, 15-20 audio clips are available on demand from the WEEI.com app. Users can search by team or by show. In addition to allowing listeners to access on-demand content, station apps frequently also include ways to connect to the station’s Facebook and Twitter pages and the request line. Some JacApps include an alarm function that wakes the user up to the sound of the station’s streaming audio. An app in development for a Jacobs Media active rock client will help listeners meet women. As station apps increase in popularity, the challenge is to improve them and make them stickier over time by releasing new versions with additional functionality. Last October, on-demand video was made available through Clear Channel’s iheartradio app, which has been updated several times. WEEI’s app offers far more than just a logo and an online stream. “It’s an interactive, multimedia, breaking news and information app inclusive of time-shifted and live audio and analysis,” VP/GM Tim Murphy says. “When consumers see it they may need to rethink what a radio station is. This is a way for us to reposition radio to the consumer.” Jacobs Media president Fred Jacobs says, “If you design a great app and your audience connects with it, it can sit right there on their iPhone or Android desktop, alongside the big boys like Google Maps, Pandora or Facebook.” |
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With the iPad out, and more digital readers on the way, are publishers getting a golden opportunity to reclaim paid-for content?
Many already have been experimenting with paywalls on their Web sites, while others are playing with pricing for their magazine content, a process that’s accelerated by the iPad’s debut.
“There’s no question we want to be able to sell our content to consumers, and we hope these devices will make it easier to do,” said John Q. Griffin, evp, publishing president of the National Geographic Society. “I would go so far as to say we need to find a way to charge for this format, whether it’s the e-reader or iPhone or smartphone. How else are we going to be able to [raise] the money to do the great editorial we do?”
Publishers have come a long way from when Web sites were little more than a free replica of the print content. Many, including Bonnier Corp. and The Economist, have shifted their Web content or hidden their print content behind a paywall. The hope is that doing so will encourage consumers to buy magazine replicas on digital devices rather than just using the device to surf free online content. Bonnier CEO Terry Snow said, “Every single title’s trying to find the sweet spot online. For the most part, what they have in the magazine is not necessarily what they want online.”
At the same time, Bonnier is pricing its iPad editions the same as single-copy print issues in the hope that consumers will pay more for the enhanced experience.
But that strategy carries risk. Consumers know an iPad edition costs less to produce than a print magazine, and, accordingly, some expect them to be cheaper. For that reason (and also to drive sales), Dwell priced its iPad edition at $2.99 per issue, half the cost of the print version, while titles that charged the same for their iPad edition as for print heard about it from customers. “The price resistance on our products is extraordinary, and that’s not going away,” said Griffin.
To overcome that resistance publishers recognize they have to better communicate the value of their iPad editions. Men’s Health, which launched as a single-issue app, included exclusive content such as videos, but still got complaints on Apple’s iTunes store about the $4.99 price.
Snow defended Bonnier’s decision to charge the print price for its iPad editions. “I think paying $4.99 for a digital copy is not unreasonable,” he argued. “It’s a combination of rolling out more services and better services, so the value is better over time. This is an opportunity to reset pricing expectations, at least on subscriptions. Single-copy prices have come up, but subscription prices have stayed relatively low.”
Buyers also will be monitoring consumer reaction as they try to gauge the value of tablet editions as an ad vehicle. “We need to understand, who is the consumer who’s having the issue with price, who is paying for it, which is the right consumer to have,” said Brenda White, publishing activation director, Starcom USA. Magazines may have a better shot when they add an iPad subscription option. Digital publishing platform Zinio said almost all the iPad editions it’s been selling were subs, some costing as much as $20.
Some also are looking at making paid content more palatable, and easier to buy, by bundling print and digital to the extent it’s allowed by the device maker. Hachette Filipacchi Media plans to offer print and digital subscription combos, while Rodale will test different offers, like a print subscription with its many workout apps.
“We’re going to see a range of prices depending on the product,” said Philippe Guelton, evp, Hachette. “I think the name of the game is testing." |
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In preparation for the launch of HarpoRadio.com on April 26, Oprah Winfrey's Harpo Radio has signed a unique ad sales and content agreement with TargetSpot, the largest Internet and mobile radio advertising network.
In addition to representing streaming radio ad inventory on HarpoRadio.com, the pact, announced Tuesday (March 23) gives TargetSpot access to archived Harpo Radio content to create sponsored vignettes for advertisers.
TargetSpot advertisers will have the option of linking their brands to Harpo personalities such as Gayle King, Dr. Mehmet Oz, Dr. Laura Berman and Derrick Ashong (in :30, :60 and :120 second spots).
"Advertisers can wrap their message around compelling and relevant content while running an ad. It will sound very natural and blend with the content, making the advertising even more effective," said Eric Ronning, co-president of sales for TargetSpot.
TargetSpot's network, which includes Internet radio streams from MySpace Music, CBS Radio, Slacker.com, Live365, and others, reaches nearly 30 million unique monthly listeners, per comScore. |
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Ask any interactive shop to build a campaign and you'll likely get a digital centerpiece that costs a small fortune, such as a mobile app for iPhones or a team of bloggers driving cross country bragging about your brand via Twitter and a microsite. This blockbuster approach appeals to both CMO egos and agency paychecks, putting the client at the center of a new communication hub.
It's also wrongheaded because in a world of billions of Internet-enabled devices with fragmenting formats, any attempt at building a single portal will fail. The only way to succeed in our tech-morphing landscape is to treat device proliferation as a new form of media inventory, and to vastly increase placements in each category.
We're talking frequency, people. Costs are falling for digital production, so it's time to put thousands of hooks in the ocean. Just as you'd never run one 30-second TV spot and call it a day, you can no longer launch one Web site or mobile app every year. You now need repeat launches across gadget platforms.
Why? Here are some things that shops pitching $100K iPhone apps typically don't put in their PowerPoint show:
Most apps are quickly forgotten. A recent study by Pinch Media of 30 million app downloads found that only 20 percent of people continue to use a given smartphone application after 24 hours, and after 90 days only 1 percent of users continued tapping.
Mobile ad demand does not exist. If you think ads work well in mobile, follow these bouncing forecasts: In 2007, Strategy Analytics predicted mobile ad spending would be $14.4 billion by 2011; in 2008 eMarketer said $6.5 billion by 2012; in 2009, the Kelsey Group suggested $3.1 billion by 2013. The falling expectations make mobile advertising the Great Pumpkin of the industry, a specter always almost about to appear.
Viral is unsustainable. Admit it, you want to go viral. But from Skittles' 2009 tweet-stream home page to Lindsay Lohan fighting the E*Trade baby this month, any buzzworthy event in social media slips away as quickly as it scales. Punch a few hot topics into Trendistic.com and check the falloff. How many topics triple in chatter and then sustain that level for more than two weeks?
The browser is fading. Wall Street analyst Mary Meeker has noted the world soon will have 10 billion Internet-enabled gadgets, and many won't run Firefox or Microsoft Explorer. Giant Google itself hinted in its most recent annual report that search volumes in traditional browsers may be cresting. Your new Web site is a stake in old ground.
"Wait!" you may protest. "Our mobile app will break through, our Facebook fan page will have fans!" But denial is not a success strategy. Devices have proliferated. Content inventory is through the roof. Formats are fragmenting. Thus the value of any campaign impression has been devalued.
Here is how to respond:
Treat gadgets as a media "market entrant." Build a three-year forecast for new device formats likely to be adopted by your highest-value customers. The iPad for affluent businesspeople? Mobile-based social media games for 40-something women? In-car connectivity systems such as Ford's SYNC for families? Your media plan should now include a matrix of customer demographics and associated gadgetry -- not just media consumption. Build both a testing and frequency strategy. Allocate 3-5 percent of your budget to explore media formats that don't involve broadcast, paper or browsers. For large budgets, this allocation may seem high -- but consider the benefit of avoiding a 30 percent loss in sales two years from now when a competitor eats your lunch in new media.
Did we mention low cost? There is no reason designing a new digital touch point should cost you $100,000, especially given the likely short shelf life. Template services such as Swebapps and AppBreeder.com, or crowdsourcing networks like Crowdspring, can help you build digital inventory inexpensively or, if you work with a reputable interactive shop, consider a client retainer relationship in exchange for more frequent deliverables.
Realize not all gadgets are suitable for push messaging. Testing new media doesn't necessarily mean advertising. Twitter may be best used for complaint discovery and customer service; mobile handsets may work best as a text-response mechanism for ads seen elsewhere in print or on TV. For each new device format, list all the possible actions you could ask of the customer, and then prioritize the ones that make sense.
Marshall McLuhan said it best in the 1960s with "the medium is the message."
What he didn't foresee was the medium would become a million unique devices that fit in the palm of your hand. |
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Billions of dollars flowing through media buying agencies will soon take a new path as volume pricing will offer radio the lure of larger share. It comes at a critical time for radio, with rates seen as key to the medium’s recovery. Interpublic Group’s Magna has taken the leap, looking to leverage the hundreds of millions it spends in radio annually by Initiative, Universal McCann and direct response firm ID Media. It’s done it by creating a radio “council” where inter-agency media teams get together and swap market intelligence and consolidate their budgets. They then approach radio vendors with a larger dollar figure. Once they strike a group deal on price, media buyers customize for whatever a specific client needs. “We’re trying to be more efficient in our execution,” Initiative EVP Janice Finkel-Green says. “If we don’t have to hammer out every deal separately because we have an agreement on how it’s going to be structured, we can spend more time fine-tuning the buy.” The program has been in development for months and $100 million of network radio buys were placed using the system during the radio upfront. Magna isn’t disclosing which clients or networks took part in its initial run, but notes they hope to begin using the strategy for buying local market radio by the end of this year. It’s already being used to buy spot television. For radio, it does hand over additional pricing power to the agency. In some cases, Magna locked-in pricing for beyond 2010. But Finkel-Green says they’d likely be getting a larger share of the dollars. “There’s always a trade-off or some sort of concession for addition revenue,” she says. It may also mean a network or station group that didn’t perform well with a client could have a second chance to get a larger portion of their media budget. Finkel-Green says it also is good for radio as a medium, since by consolidating the budgets into a bigger dollar figure it raised radio’s profile inside Magna. |
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