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Monday, November 11, 2013
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Radio’s digital audio business is growing, but how much so isn’t as clear. Everyone agrees the streaming audio ad
business is growing but no one’s sure exactly how much. Neither the Interactive Advertising Bureau nor the Radio Advertising
Bureau break out online audio ad revenue and there are wide variations in estimates from industry experts. Based on what
he calls “incredibly imprecise math,” Triton Digital COO Mike Agovino pegs the total digital audio ad market at $800-900 million
this year, up from $500 million in 2012. His estimate is based on results reported by trade groups
and public companies and conversations with ad networks and pureplays. Others growth estimates
are far more conservative, in the 10%-20% range. Either way, year-over-year percentages can be
deceiving for a business starting from a relatively small base. “A lot of advertisers are getting excited
and more and more dollars are flowing into digital audio,” says Mitch Kline, co-CEO at digital audio ad
network TargetSpot. “The more players that come into it, the more it’s getting noticed.” Agovino says
advertisers with large mobile budgets are “gravitating toward the mobile audio ad unit and see it as
highly valuable in the mobile ecosystem.” Ad categories spending the most on the medium include
auto, retail, insurance, entertainment, telecom and home improvement, according to sellers. Eric
Ronning, EVP/chief digital revenue officer at rep firm AdLarge Media, says a combination of regional
and network business is helping drive digital growth. Fueled by escalating mobile consumption, the digital audio audience is
reaching a critical mass where it can deliver against advertiser objectives. There were nearly 2.6 million concurrent listeners
to ad-supported digital audio at any given minute in September during the primetime Monday-Friday, 6am-8pm daypart,
according to Triton Digital. That made September the second highest listening month on record. Only March was higher.
Triton expects the number to hit three million concurrent listeners in the next several months, after it adds four additional
webcasters to its measurement service.
For the first time, some digital audio sellers said to be showing inventory tightness. As demand for digital audio
advertising grows, so is the supply of inventory, driven by a growing number of companies jumping into the space. A
proliferation of outlets is keeping CPMs (cost per thousand impressions) stable for broad, untargeted national buys. “When
someone’s not really targeting and they want massive reach, there are so many different alternatives and that doesn’t fire up
CPMs,” TargetSpot co-CEO Mitch Kline says. Geo-targeted CPMs are growing faster. For instance, CPMs for impressions
targeted within top 10 markets, where inventory is more limited, are up low double-digits, according to Kline. And behaviorallytargeted impressions, such as ones served only to consumers planning to buy a new car or who recently purchased a new
home, are fetching the highest CPMs. The more targeted the buy, the higher the CPMs, sellers say. But as more buyers
deal directly with big streaming brands like Pandora, iHeartRadio and Spotify, there are some demand issues. “Pandora
has a challenge because of high demand,” says Triton Digital COO Mike Agovino. “You have some inventory tightness in
the market that never existed before.” Even as more players like Apple and Google move into the space, Agovino maintains
that inventory is shrinking due to the lower spotloads carried by pureplay webcasters, coupled with Clear Channel reducing
online spotloads. “As audience migrates from traditional channels to digital channels, the number of ad impressions in an
hour diminishes,” he says.
Technology, education, better listener experience seen as keys to digital ad growth.
What will it take to grow digital more? For the streaming audio business to grow, industry
leaders say there needs to be more focus on training sellers, educating buyers, upgrading
geotargeting technology and improving the listening experience. “The listening is already there,
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>>FCC
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PAGE 1
NEWS
Monday, November 11, 2013
we just haven’t capitalized on it,” TargetSpot co-CEO Mitch Kline says. “We need better selling, less negative selling and an
industry working together.” AdLarge Media EVP/chief digital revenue officer Eric Ronning also sees strength in numbers.
“We embrace all growth in the online audio space and strongly believe that the more serious options there are available
for advertisers, the better and faster the growth for all,” he says. Triton Digital’s Mike Agovino says more granular locationbased targeting is needed to drive revenue growth. “Advertisers are going to pay a very high CPM to target someone on a
mobile device with an audio ad within a limited geolocation,” he says. Hyper-local geotargeting isn’t a reality today for most
broadcasters, although CBS Radio and others have started to offer it. It could open up broadcast streams to a larger share
of digital dollars being spent by neighborhood businesses looking to target within a small radius of their business instead
of the entire metro. “As more broadcasters and pureplays update their technology, they’re beginning to use the targeting
elements that can be done in aggregate at scale,” Agovino says.
FCC puts shot-clock on station divestiture trusts. The FCC is putting broadcasters
on notice that the era of the eternal station trust is over. As it clears Townsquare
Media’s transfer of three Cedar Rapids, IA stations into a trust to allow the company
to move forward with its 12-market, $238 million deal with Cumulus Media, the FCC
will start the clock ticking for finding a buyer. That’s a policy reversal after two highprofile decisions released in recent years. Clear Channel created the Aloha Trust in
2008 when Bain Capital and THL Partners bought the company. Five years later, 37 of the 57 stations placed in the trust
have been sold and two more sales are pending. In 2011, Cumulus Media put 15 stations into a trust when it bought Citadel
Broadcasting. Two years later, eight stations have yet to be sold. Audio Division chief Peter Doyle says those open-ended
trusts were justified at the time since the economy was in “substantially worse condition” and the credit markets for broadcast
transactions were, at best, under tight constraints. “The economic situation today is substantially different compared to 2008
or even 2011,” Doyle says. “The credit market for broadcast transactions appears to have substantially, if not fully, recovered,”
he concludes. In assessing the Townsquare-Cumulus deal, Doyle says the time has come to set a “reasonable limitation” for
how long a buyer can leave stations in a divestiture trust. In this case, the FCC will give Townsquare two years to find buyers
for classic rock KCRR (97.7), country “K-98.5” KOEL-FM and CHR “Q-92.3” KKHQ-FM in Cedar Rapids. Until a sale closes
the Allen Blum-administered trust will also be required to file reports every six months, updating the agency on its efforts to
sell the stations. The FCC hasn’t said whether it plans to start the clock ticking on the Clear Channel and Cumulus trusts.
Report: Ad tax picks up steam in Washington. Lobbyists for advertisers, agencies and media companies are coordinating
their efforts to defeat a proposed tax on advertising services. That unified assault may be needed. Rep. Dave Camp (R-MI)
has proposed downsizing the deduction allowed to a company for its advertising expenses. Adweek reports the proposed
change has made it to draft tax reform legislation, a situation one lobbyist tells the publication is a “Defcon 1” situation. If
Camp’s proposal becomes law, only half the ad expenses could be deducted by a company in the first year, with the other
half amortized over the next 10 years. Adweek says lobbyists from several ad-supported industries gathered last week in
Washington to discuss their attack plan. Several state broadcast associations have already started reaching out to local
lawmakers to explain what an ad tax could do. For instance, the Michigan Association of Broadcasters launched a letter
writing effort by to Camp. Most are pointing to an IHS Global Insight study that shows advertising is responsible for $4.1
trillion in economic output and directly supports more than 15 million jobs in the U.S. each year. There’s also been a realworld example. Florida’s 1987 ad tax lasted just six months but ended up costing the state’s broadcasters $93 million in
commercial orders that were cancelled.
Larry King is ‘Droppin’’ back in to radio. A mix of opinion, stories, humor and memories from his 56-year broadcast
career will make up “Larry King Droppin’ In,” a new one-minute vignette that debuts today on 55 Cumulus Media stations,
including the company’s news-talk outlets in the top 10 markets. “It’s a wonderful chance to come back — I have always
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Monday, November 11, 2013
loved radio,” King tells Inside Radio. Since leaving his nightly CNN talk show three years ago, King
has remained at the mic, hosting shows for the web channel Ora.TV and the cable channel RT. But
morning drive radio exposure, including in 10 of the top 11 markets, will put King in front of a lot more
people. He’ll turn 80 years-old next week, and King jokes he’s “past the age of retiring” — and with
his busy schedule the ability to record a week’s worth of vignettes (barring breaking news) at one
sitting is appealing. “It won’t take a lot of time, and it’s fun to do — it’s sort of like Twitter on the air,”
he says. Whether it leads to more radio work remains to be seen. If anything, King says his ideal
radio job would be a once-a-week sports talk show. King, who hosted a late-night call-in show for
the Mutual Broadcasting System from 1978-1994, says talk radio today is filled with predictable host
rants. “Too many of the hosts I see today are know-it-alls,” King says. “The questions are longer than
the answers.” He also thinks there’s not enough humor left in talk radio, an element he credits with
helping him remain on the air for five decades. “I love radio,” King says. “There’s no medium like it;
it’s your pal in the car, it’s theater of the mind — it’s so personal.”
Larry King
Nash FM rolls out new national night show. Los Angeles morning man Shawn Parr is now host of “Nash Nights Live,”
the new nightly evening show airing across all 84 country stations owned by Cumulus Media. Parr’s show will serve as a
lead-in to the syndicated “Kickin’ It with Kix” overnight show. “After 25 years in Los Angeles country radio I can’t even begin
to tell you how exciting it is to move to Nashville, the home of country music,” Parr says. He’s most recently been morning
personality on “Go Country 105” KKGO-FM. Before that he worked in both afternoon and morning drive for Emmis’s former
“Country 93.9” KZLA. Parr has also been the voice of Dick Clark Productions for the past 15 years, handling voiceover for
such shows as the Academy of Country Music Awards and Golden Globes. Cumulus plans to syndicate the “Nash Nights”
to stations nationwide going up against WestwoodOne’s syndicated Lia show. Cumulus co-COO John Dickey says Parr’s
new program will “provide our listeners and advertisers with in-demand ‘Nash’ programming.”
iHeart gets its own chief programmer as data points to growing user base. With a growing amount of digital-only
content, Clear Channel has named its first-ever programming executive for iHeartRadio. It has promoted Cincinnati VP of
programming Chris Williams to SVP of iHeartRadio programming to oversee all digital content programming, curation and
marketing strategies for the streaming music service. The creation of a dedicated programming manager for iHeart comes
as Clear Channel releases internal data showing the service’s app has now been downloaded 260 million times. It also is
said to have 40 million registered users. Clear Channel notes the number doesn’t reflect its entire digital audience, since
users don’t need to register to listen to broadcast station streams. Across the entire iHeartRadio network – which includes
all the other radio groups that are integrated into the platform — the company reports there were more than 68 million digital
unique visitors last month, the highest figure since its launch. That no doubt has been helped by the addition of a number of
new content options, including iHeartRadio Talk, the launch of Nick Radio with kids network Nickelodeon, and the availability
of the service in Nissan dashboards. “The strides we’ve made this past year in our offerings have paid off and we plan to
increase both the availability and breadth of our product in the months to come,” president of digital Brian Lakamp says.
ESPN restructures local O&O management team. On the heels of striking a deal with Cumulus Media to operate its Dallas
owned-and-operated station, ESPN Radio is reportedly restructuring operations at its O&Os in the top three markets. Jim
Pastor will take over day-to-day management of its three other O&Os in New York, Los Angeles and Chicago. The Chicagobased executive is SVP of ESPN Local, the umbrella over the radio stations and their local websites. The moves are part
of a continuing shift inside the sports media giant which over the past two years has been taking a number of steps to more
closely weave together its local radio stations and local sports websites. “710 ESPN” KSPN, Los Angeles general manager
Scott McCarthy becomes VP of local content. WMVP general manager John Cravens is named VP of local revenue. Both will
report to Chicago-based Pastor. The changes were reported by media blogger Robert Feder. ESPN declined to comment.
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Monday, November 11, 2013
Broker gives back to his alma mater to help next generation of broadcasters. Broker and station owner Larry Patrick
has donated $1 million to the University of Tennessee, the largest single cash gift in the college’s history. The donation will
be used to create a media management and law professorship, to be named after UT electronic media professor emeritus
Herb Howard. At some point in the future, the donation will be combined with Patrick’s planned $5 million estate gift to
replace the distinguished professorship with an endowed chair, also honoring Howard’s legacy. The former professor and UT
associate dean began his broadcasting career while in high school as an announcer for local radio station WJHL, Johnson
City, TN (910), where he later became the station’s program director. In 1953 he signed WJHL-TV on the air and was the
television station’s first weatherman. He also served as a research consultant for the National Association of Broadcasters.
“My desire to honor Herb Howard reflects his lifetime of service to the university, and serves as a thanks from one of the
many students who benefited by having Dr. Howard as a teacher,” says Patrick, who graduated from UT in 1973. UT College
of Communication and Information dean Mike Wirth says the donation will have a “transformational impact” as the school
works to build up the program. To recognize Patrick for his financial support, the college renamed its event hall the Patrick
Auditorium over the weekend.
Inside Radio News Ticker…Univision brings sports to Xbox…Microsoft’s Xbox One is increasingly a multimedia hub for
content, with the Univision Deportes app the latest to gain distribution on the gaming device. It’s the first Spanish-language
sports app to gain access to the Microsoft platform. The two companies partnered earlier, putting Univision’s UVidoes app
on Xbox 360. The app will make a lot of soccer content available to users, which is an important addition heading into the
2014 World Cup. “The addition will mark a significant milestone in our mission to bring diverse and complete entertainment
offerings to Xbox at launch and beyond,” Microsoft Interactive Entertainment Business general manager Kathy Styponias
says. The specially reformatted app will show up on Xbox One on November 22…TuneIn redesigns for Apple OS…In new
versions of its app for iOS7, TuneIn says it has fixed bugs that were causing playback or streaming errors for some listeners
using the latest Apple devices. The company says it has also added streaming of hundreds of college basketball games,
including every Pac-12 game. TuneIn says it’s a result of collaborations with IMG College, Learfield Sports, ESPN Radio and
Spartan Sports Network, allowing local broadcast flagships to stream the games…Chuy the talk host?...Three months
after being let go from urban KMEL, San Francisco (106.1), longtime morning host Chuy Gomez tells the Silicon Valley
weekly Metroactive that he’s talked to several broadcasters in the market where he’s been a fixture for the past 20 years.
Most noteworthy is Cumulus Media approached him about hosting a talk show on all-news KGO (810) — which he tells the
paper was perhaps the most flattering of all. Cumulus has taken a number of steps over the past two years to remake KGO,
dropping several longtime talk hosts to appeal to younger demos. Meanwhile, Gomez’s former co-host DJ Mind Motion, who
had been filling AM drive on KMEL, was also dismissed from the station last week...People Moves...A Texas homecoming
in Corpus Christi. Read People Moves HERE.
Inside Radio Deal Digest —
Ithaca, NY — Saga Communications files to buy CHR “Z-95.5” WFIZ from Alan Bishop’s
The Radio Group for $715,000. The deal also includes three Ithaca-licensed translators,
including W299BI (107.7) which has been simulcasting WFIZ, W242AB (96.3) which has
been simulcasting classic rock “99.3 The Wall” WLLW, and W235BR (94.9) which has been
simulcasting AC WNYR-FM (98.5). Saga already owns five full-power stations and two HD2/
translator-based stations in the Ithaca market. Bishop still owns eight other radio stations in
the Finger Lakes region.
South Carolina — Larry Wilson’s L&L Broadcasting spins off one of the stations he recently
bought from Triad Broadcasting. L&L sells classic hits “103.1 The Drive” WGZO, Parris Island,
SC to Apex Broadcasting for $450,000. WGZO is between radio markets and under L&L it’s
been operated out of a Savannah, GA cluster but under Apex it’ll be run out of its Charleston,
SC market. That’s where Apex already owns five stations.
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CLASSIFIEDS
Monday, November 11, 2013
DIRECTOR OF SALES
REGIONAL SALES MANAGER
Three Eagles Communications (TEC) is about to wrap-up another
great year. With a strong Midwest economy we are excited about the
future and the growth that we see ahead. At TEC we understand that
live, local and relevant radio requires great live and people and with
that we are looking for the best in the industry on air and on the
streets.
ROCKIES
Several markets are searching for a DIRECTOR OF SALES that
understands the importance of getting out from behind the desk
and working with local sellers by training, coaching, mentoring and
activating them in to greatness! At TEC all
stations in the cluster are Profit Centers. We don’t
have a sales team that broker the market group;
we have teams assigned to stations that are
expected to drive revenue beyond their monthly
Profit Plans. We just don’t sell the big dog in the
group and discount our way down the list to the
point of giving one or two away to ‘bring in the
buy’ nor do we call it ‘added value’. Each stand on
their own with goals, promotions and events. In short, we maximize
revenue by using all the tools on each station.
Three Eagles Communications is made up of 48 radio stations in twelve
small Midwest markets in South Dakota, Nebraska, Iowa and Minnesota.
If you think you have what it takes and want to live, work and play in an
area that offers a great quality of life with strong work ethic, a steady
economy, low unemployment, great schools and lot’s of community
pride where a handshake still means something, then you and I should
talk. Send all of your propaganda to: Gary Buchanan, President/COO,
Three Eagles Communications; [email protected].
Three Eagles Communications is an equal opportunity employer M/F.
qual
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