Two significant moves by radio giant Clear Channel Communications this past week have the potential to radically improve the listening experience for the medium as well as boosting the recently struggling radio advertising business. The company has promised both fewer commercials, which should make listening more pleasurable, and digital signals, which may change the way the medium is transmitted and consumed. Earlier in the week, the media conglomerate announced that it was adopting self-imposed commercial load limits on its 1,200-plus stations after receiving much criticism from listeners and advertisers alike over severe clutter. That move has been greeted enthusiastically by buyers. "It's a very good thing," said Mark Lefkowitz, executive vice president at Furman Roth advertising. "This issue has been a cancer for radio. Some stations are quite frankly unlistenable." It is Lefkowitz's hope that fewer commercials will bring back listeners who have been turned off. But he cautioned that it would "take a while to undo the damage." Clear Channel sales reps have been contacting buyers in the past few days trumpeting the news. Though one buyer, who did not wish to be quoted, feared that Clear Channel would try to maintain its current advertising revenue despite lessening its available inventory. That would mean rate increases, which would not thrill buyers. Lefkowitz shared a similar sentiment. "There will be pressure [on radio stations] to revert [to overselling] when the economy is better," he said. Meanwhile, on Thursday, the Clear Channel made an even more intriguing move, announcing that it was making a concerted effort to dial up the adoption of digital radio, or high definition radio, by supplying digital equipment to 1,000 of its stations. Using iBiquity Digital Corporation's HD Radio technology, the company plans to install 95 percent of its top 100 markets within three years. Essentially, digital radio is better radio, as it offers those listeners who have plunked down a few hundred bucks for an HD radio a CD-quality signal. For starters, Clear Channel Radio believes that HD will drive more listening and more business their way. "We expect more of them will listen and for longer periods," said John Hogan, Clear Channel Radio CEO. "This will translate into a better, more desirable environment for advertisers and we expect they will use radio to a greater degree." Similarly to what has happened in the HD TV world however, adoption is slow, knowledge is scarce, but the potential is large. As a result, the radio business may not experience major changes for several years. The effect is "still far down the road," said Lefkowitz. "If they change 100 stations a year, it will still take 10 years to get through all their stations." Yet some see tremendous potential in this new version of the medium. Like HD TV, digital radio programmers will be able to offer multiple signals in each market, and may be able to transmit more than just sound. Even now, some satellite radio providers deliver text messaging to radio displays in cars (and in some cases, text advertising). As a result, radio may become more direct-response orientated. "There are other TBD opportunities for advertisers," said Clear Channel's Hogan. "Even more specific demo targeting, the ability to send different commercials to different receivers, etc, that will increase the attractiveness to advertisers, thus potentially increasing our revenues." Tim Hanlon, vice president and director of Emerging Contacts at Starcom MediaVest Group, believes that digital radio could make for an exceedingly dynamic medium. "The magic to come from that will depend on the imagination of those building the receivers." That could mean a radio version of TiVo, says Hanlon. He acknowledges that for the time being, digital radio is about better sound, but feels that change may happen faster than in the TV space. "Radio has been a more creative medium in the past," he said.
The radio industry is poised at a crossroads that could well determine its future place in Madison Avenue's media mix, but some of its biggest players are loath to make the investment necessary to grow, or even maintain its share. That was the subtext of the message delivered by radio ratings giant Arbitron during a second quarter earnings briefing with analysts on Thursday. At a time when Arbitron is driving ahead with research innovations that could well level radio's playing field with other media, the company said three of its biggest customers are balking. One of them, Infinity Broadcasting, one of the largest radio broadcasters, has not renewed its contract for Arbitron's radio ratings and is trying to nurture an alternative plan with a tertiary player. More critically, the three, including Infinity, Cox Radio and Radio One, all are refusing to encode their radio broadcasts during a critical test of the new portable people meter system Arbitron and its partner Nielsen plan to test in Houston beginning this year. The portable people meter, or PPM, is deemed by some to be a development that will finally equalize the relative impact of radio's audience reach with the more dominant medium of television, but some radio insiders fear that the move could also destabilize the economics of the radio industry, and have called on Arbitron and the Radio Advertising Bureau to conduct an independent assessment of the new meter's implications for the radio business. There biggest fear is that by capturing the out-of-home viewing of broadcast and cable TV outlets, radio could lose relative share of broadcast ad impressions, and consequently, share of the advertising pie. But according to results of some new research conducted jointly by Arbitron and media services giant OMD, there is far more planning upside than downside for radio to be realized by the PPM. "When radio is added to TV in a media plan, it brings in a significant number of unique consumers not reached by television alone," Stephen Morris, president-CEO of Arbitron, said during Thursday's briefing. "These findings make a strong case for giving radio a more significant piece of a media plan." That indeed seemed to be the indication when OMD research chief Beth Uyenco and Arbitron executives presented the findings at the recent ESOMAR research conference, but Morris said many of those findings would be vetted by the information generated from Arbitron's and Nielsen's Houston tests, which begin later this year, and are expected to yield findings beginning in April of 2005. But the whole endeavor could be in jeopardy with three big radio players refusing to participate, a position Morris said is putting them at odds with Madison Avenue. "We're hearing an increasing chorus from the buying community urging radio to participate," he said. In fact, many players within the radio industry have been pushing for the innovation, and see the move toward electronic measurement of radio audiences - as well as the ability to measure them directly alongside TV and potentially other media - as a critical step toward the radio medium's credibility and accountability. RAB president Gary Fries has been taking a risky position by pushing his members to support this despite the apparent antipathy from some big players, and in just the past week, radio giant Clear Channel Communications has taken several steps to lead the industry in a new direction (see related story in today's MediaDailyNews). Meanwhile, Morris noted that the PPM has gotten a huge vote of approval from north of the border, citing BBM Canada's decision to roll out the PPM as the official radio ratings currency in Quebec and Montreal beginning this fall as the endorsement of a major industrialized nation. "The barriers to change are very, very high, so when a major economy and a major country like Canada takes this kind of a step... that in our mind, at least, counts as a pretty significant statement of confidence by a very sophisticated media industry that does very detailed analysis before they make a decision to move." Canada's endorsement of the PPM, and the fact that Nielsen recently announced plans to merge its Canadian operations into a joint venture that would be controlled operationally by BBM, has been seen by many in the U.S., including some key lawmakers, as key development, but Morris implied that the development of PPMs nonetheless would be much slower in the U.S. than in other markets, because "of where the processes stand." One of those processes, he acknowledged, is purely economic, and the fact that Arbitron is calling on the radio industry invest on multiple fronts, but especially on the game-changing PPM system, at a time when radio broadcasters are feeling their own economic pinch. To offset some of its dependency on the radio industry, Arbitron has been moving rapidly to develop alternate revenue streams, especially new media planning and software systems that would tap greater revenues from Madison Avenue. Earlier this year, it acquired Marketing Resources Plus, a major media planning software provider, from Nielsen parent VNU, and has been moving aggressively in that direction. On Thursday, Morris said Arbitron plans to introduce a "new planning tool" in the next several months. The company also has ambitious plans to expand its measurement well beyond radio. It is concurrently rolling out a national "marketing" panel that incorporates PPMs to measure media usage with product scanner data to capture product purchases in consumer households. The company is looking at applying that to the measurement of print media as well, and is considered a dark horse against Nielsen to develop a new global positioning satellite-based technology for measuring outdoor media usage.
Alarming Development: Mag Hopes Store Security Stunt Lifts SHOP As is common with many magazine launches, Hearst is promoting its new shopping-focused title, SHOP Etc., with a party. But in this case, Hearst's invite, sent recently to media and press people, is quite unusual, especially given this era of heightened public security. Attached to a standard glossy cardboard invite is a real Sensormatic security tag, i.e. one of those plastic security things that stores have hooked to clothing so shoplifters don't walk out of stores without setting off alarms. At this particular party, which will be held Aug. 4 at the Milk Studios Gallery in New York, you will actually want to set the alarm off. Upon arrival, each attendee will have his or her invitation scanned at the door, and those who set off the alarm will win a $10,000 shopping spree at Saks Fifth Avenue. Jessica Kleiman, director of public relations at Hearst, said that the company was trying to be clever, while also sending an invitation that symbolizes the new book. "We thought about the mission of SHOP Etc., which is to be a one-stop shopping experience for fashion, home, and beauty," she said. "Because there is such a strong retail angle to this magazine, we really wanted to think about the launch party as a store opening and one of the icons that is so prevalent in a store is the Sensormatic security tag." It turns out that SHOP Etc.'s executive marketing director, Lori Rhodes, used to work at Saks and had dealt with the Sensormatic company in the past. Apparently, the company loved the idea and agreed to augment the invitations. Master Debate: AMC To Grapple With Mags' "New Realities" The upcoming American Magazine Conference, which is already shaping up to be a star-studded event -- Amazon's Jeff Bezos, Donny ("I can't say no to press") Deutsch, hip hop producer Russell Simmons will be on hand -- promises an intriguing agenda. When publishing execs gather in October at the Boca Raton Resort & Club in Florida, the theme will be "Mastering New Realities." We assume this is referring to navigating the still tough magazine business climate. The conference, hosted by the Magazine Publishers of America and the American Society of Magazine Editors, will cover hard core industry issues such as audience measurement versus rate base, the pros and cons of launching new titles, discussions on sales strategy and cover design, and really good food and schmoozing. Conference highlights include: * The Best Ever Boca Beach Bash: Advertising Age will present its top magazine list while Food and Wine's celebrity chefs (like Michelle Bernstein of Azul and Robin Haas of Chispa) are serving dinner. * Taming the Consumer Jungle with Amazon.com's Jeff Bezos: The company's founder will be interviewed by Fortune's Andy Serwer (Mag Rack is not really sure what Amazon has to do with magazines, but we'll go along). * All About Advertising: Insights from Donny Deutsch: The man who has re-invented advertising finally gets some exposure. Hopefully, he will wear one of his trademark tight-fitting muscle shirts. * Bush or Kerry -- Understanding New Realities in Politics: Joe Klein of Time and Primary Colors and Howard Fineman of Newsweek will discuss the presidential race and the media, just weeks before the election. * The Power of the Cover: This panel will discuss the choices editors make and the impact their covers have on the newsstand. * What a Difference a Year Makes! New Launches New Learnings: Dave Zinczenko of Best Life, Suzanne Boyd of Suede, and others explain why they would do something as insane as launching a magazine in the recently difficult business environment. *The Debate on Magazine Measurement: This promises to be perhaps the nerdiest hour of one's life, but a must-attend nevertheless. Plus, during the AMC dinner event, "hot-hot Latin rhythms" are promised. Just picture a roomful of 40-plus, Hawaiian-shirt-wearing media executives tango dancing. "The primary focus of this year's AMC is to better prepare publishers to 'master new realities' - by overcoming obstacles collectively and innovatively, and most importantly, by reconfirming and strengthening our connection to those who matter most - the magazine reader," under-stated MPA president-CEO Nina Link. This year's magazine executive panel, moderated by Stephen Shepard, editor-in-chief of BusinessWeek, features Meredith President Stephen Lacy, Time Inc. CEO Ann Moore, Reader's Digest CEO Thomas Ryder; and Conde Nast CEO Charles Townsend. Premiere May Premiere A New LookPremiere magazine has named Dirk Barnett, former Popular Science design director, as art director. Barnett has been design director of Popular Science since 2001. This past May, Barnett was recognized for his contributions when Popular Science won its first National Magazine Award for general excellence in the one million to two million circulation category. On the business side, Premiere is claiming a 79 percent increase in paging for the September 2004 Fall Preview issue versus last year. Bauer Gets In Touch With Its South Of The Border Side Bauer Publishing is extending its wildly successful In Touch Weekly into the international market with the launch of In Touch Weekly Mexico. The new magazine will cover the American celebrity scene as well as feature stars from the Mexican and Latin American markets. The 80-page publication is available on newsstands at 18 Pesos or approximately $1.60 USD. The first issue is said to feature some muy caliente gossip.
Syndication is a better bet for marketers trying to reach back-to-school shoppers in late summer on TV, as its ratings hold up better than network programming. That's according to an announcement yesterday by the Syndicated Network Television Association (SNTA), which finds that syndicated television ratings typically remain strong through August, the core back-to-school shopping month, while also delivering a higher composition of primary back-to-school shopping targets like mothers and value-conscious shoppers. Syndication isn't immune to lighter summer viewing levels. But it remains within 10 percent of its yearly average while network programming drops off 30 percent, says the SNTA. In addition, more mothers of children ages 6 to 17 watch syndicated shows than watch network shows, and by significant margins. For example, ratings for syndicated feature films are 39 percent higher than network ratings; 35 percent higher for dramas, and 30 percent higher for news magazines. The SNTA also provided ratings data that shows syndication over-delivering against moms who shop at discount stores, department stores, and specialty stores. "If you want to reach the mothers of back-to-school children, the place to do it is in syndication," said Mitch Burg, SNTA President, in a statement. "Every single genre of syndicated programming -- court, action, game, sitcom, talk, drama, or entertainment news - is watched by customers who shop in the major back-to-school retail stores." According to the National Retail Federation (NRF), back-to-school represents a $15 billion marketplace for traditional items such as clothing, shoes, backpacks, and school supplies.