Terrestrial radio isn’t going anywhere, according, unsurprisingly, to terrestrial radio execs. Even with the explosion of digital streaming services like Spotify, Pandora, and MOG, representives from Clear Channel, Emmis Radio, and the Radio Advertising Bureau made the case for the continued viability of their businesses in an Advertising Week panel at the Times Center in New York.
“It’s an ‘and-both,’ not an ‘either-or,’” said Charlie Rahilly, president of national advertiser platforms at Clear Channel Radio. Listeners aren’t single-minded about their music consumption, and they’re choosing more than one way to listen. “They use all the different utilities that are available,” he said. There is, they hope, room for everyone.
Of course, executives working in terrestrial radio are hoping none of the $800 million advertisers are expected to spend on audio this year will shift to digital services, where growth in inventory outstrips growth in ad spend. They’re banking their livelihood on people’s laziness. While services like Spotify are nice for on-demand music, not every user wants on-demand, the argument goes. “Some people want to be passive and have their listening experience curated. Let’s face it, we’re a lazy society,” said Alexandra Cameron, svp at Emmis NY, noting that a large chunk of Facebook and Twitter users are unengaged lurkers. Advocates of Spotify and MOG could argue that their playlists, recommendation engines, channels, and social features offer a simple solution to the lazy listener conundrum.
That doesn’t mean traditional radio companies aren’t bracing themselves. Clear Channel recently launched its digital service, iHeartRadio, and sells advertising in packages that include mobile, terrestrial radio, and digital. Emmis Radio is developing a smartphone-enabled service because the company is certain that the custom listening digital services “can’t continue to be free.”
And others aren’t so hopeful that traditional radio will be able to hold on to its ad dollars. Speaking at IAB’s MIXX Conference on Tuesday, Grantland.com founder and podcast host Bill Simmons said that when vehicles become Internet-enabled, “it’s all over.” Digital audio advertising, which currently earns only a small piece of the ad dollar pie, will likely explode at that point, he said. And that's a development he expects to happen in the next year.
Pandora svp of sales Steven Kritzman touted the “lean-forward” engagement of Pandora.com’s personalized stations and of its mobile listeners. Further, its users are registered, so advertisers can target audiences more specifically by factors like age and gender, versus terrestrial radio, which is limited to geographic and time of day targeting. It’s helped increase pricing for digital audio ads. But the digital audio advertising market is still in its infancy.
The Radio Advertising Bureau is working with IAB to spread awareness of digital radio (and, in turn, ad dollars), said Jeff Haley, president and CEO of RAB. “From 6 a.m. to 6 p.m., we are it, and there is inequity between time spent listening and advertising,” he said. “Daytime is the new prime time.”