Driving Revenue-Generating
Strategies Through Information
and Insights
(What Radio Execs Don’t Know Can Hurt Them)
Tom Buo...
2
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Developing sales, operational and acquis...
3
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Overview of Presentation
• Insights from...
4
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Insights on the Changing
Advertiser and ...
5
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Question 1: How Many Different
Media doe...
6
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
The Answer is…
AVERAGE NUMBER OF DIFFERE...
7
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Question 2: How Active are SMBs
with reg...
8
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Very Active and its Increasing
Source: L...
9
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Question 3: How Satisfied are SMBs
with ...
10
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Some are Very Satisfied
• 36% of Radio ...
11
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
What do we know about the typical
SMB A...
12
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Of this Group (that advertise on radio)...
13
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Consumer Behavior is also Changing
 SO...
14
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Understanding Nationwide
Local Advertis...
15
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Radio got 11.3% of the Local
Advertisin...
16
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
But, Online Advertising will Exceed
Rad...
17
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
The Local Advertising Pie is Increasing...
18
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Local Radio is Strong in Key Verticals
...
19
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Online Ads are Accelerating in Key Vert...
20
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Drilling Down in your
Local Advertising...
21
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
The Las Vegas Example: The Market
• Mar...
22
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Las Vegas Radio Competition
• 46 commer...
23
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
But, That is only part of the Story
The...
24
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Radio’s spend is projected to grow to $...
25
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Drilling Down into Verticals…
Radio Adv...
26
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
And that…
as the Auto Spend grows to $1...
27
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Plus,…
for some reason Las Vegas is not...
28
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
There are Some Key Verticals to Watch
T...
29
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
And Online Spending is Exploding for
Ce...
30
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
31
Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
Conclusions
• Changing Consumer and Adv...
Thank You
Tom Buono
tbuono@biakelsey.com
Upcoming SlideShare
Loading in...5
×

Driving Revenue-Generating Strategies Through Information and Insights - NAB Show 2014

443

Published on

Tom Buono, CEO, joined a panel discussion at the 2014 NAB Show entitled: "Lunch and Learn: A Discussion on Radio’s Four Significant Issues" to share valuable advertising revenue trends and projections that will help you prepare for the future and make critical decisions.

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
443
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
21
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Driving Revenue-Generating Strategies Through Information and Insights - NAB Show 2014

  1. 1. Driving Revenue-Generating Strategies Through Information and Insights (What Radio Execs Don’t Know Can Hurt Them) Tom Buono CEO & Founder, BIA/Kelsey April 2014
  2. 2. 2 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Developing sales, operational and acquisition strategies through market sizing, competitive intelligence, business planning and actionable data: MEDIA Access Pro™ Integrated view of markets, ownership, revenues and competitive and comparative information on the media industry on a local level Investing In Radio® Publications Market-by-market investment reference guides, delivering five-year market level projections for over-the-air and online revenues Obtain a 3600 view of the television industry: State of the Industry: Radio Comprehensive report detailing the current situation in the radio industry, from challenges to opportunities, transactions, new sales strategies and digital solutions BIA/Kelsey’s Specialized Radio Services Evaluate ad revenue opportunities across multiple dimensions: market, media and business category: Media Ad View Every market ad spending forecasts that track ad trends and channel adoption by media and business categories; 94 business categories across 12 media Identify the marketing trends of advertisers and buying habits of consumers in today's mobile, online, social environment: SMB Research Local Commerce Monitor: Insights around advertiser behaviors and media choices Consumer Commerce Monitor: Insights around consumer buying behaviors and trends Secure financing BIA Capital Investment banking firm specializing in serving the communications, media and technology industries
  3. 3. 3 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Overview of Presentation • Insights from Advertisers and Consumers • Understanding National Advertising Trends • Drilling Down into Local Advertising Markets • Conclusions
  4. 4. 4 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Insights on the Changing Advertiser and Consumer
  5. 5. 5 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Question 1: How Many Different Media does the Typical SMB Use?
  6. 6. 6 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. The Answer is… AVERAGE NUMBER OF DIFFERENT MEDIA USED FOR ADVERTISING & PROMOTION Source: BIA/Kelsey LCM Wave 17 (Q3/2013); LCM Wave 16 (Q3/2012). BIGGEST LOSERS (IN SMB USAGE): • Directories • Cable TV • Newspapers • Outdoor
  7. 7. 7 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Question 2: How Active are SMBs with regards to Social Media?
  8. 8. 8 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Very Active and its Increasing Source: Local Commerce Monitor” (LCM – Wave 17), BIA/Kelsey’s ongoing study of the advertising behaviors of small and medium-sized businesses (SMBs) Social is becoming a more significant aspect of their business
  9. 9. 9 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Question 3: How Satisfied are SMBs with their Radio Spend?
  10. 10. 10 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Some are Very Satisfied • 36% of Radio SMB Advertisers rate their performance on radio as either Extraordinary or Excellent
  11. 11. 11 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. What do we know about the typical SMB Advertising on Radio ?
  12. 12. 12 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Of this Group (that advertise on radio) • A net 49% expect to increase their advertising spend over the next 12 months • 48% frequently track their business leads • 44% use Radio as their channel to purchase on-line ads • 62% have a loyalty program • They get 26% of their business from daily deals and promotions
  13. 13. 13 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Consumer Behavior is also Changing  SOME RECENT FINDINGS:  Consumers use a wide variety of both traditional and digital media to find and shop for local services and products  This behavior parallels the fragmentation seen in use of media by small businesses.  Consumers are making more appointments online for services like auto, beauty, and healthcare.
  14. 14. 14 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Understanding Nationwide Local Advertising (The Pie is Bigger and the Competition is a Changing)
  15. 15. 15 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Radio got 11.3% of the Local Advertising Spend in 2013 We estimate Radio generated $15 Billion in Local Advertising in 2013, with a little over $500 million, coming from on-line/interactive Radio out of a Total Local Market of $133.2 Billion. Direct Mail 27.2% TV 15.2%Newspapers 15.8% Radio 11.3%Print YP 3.4% Online 9.1% Out-Of- Home 5.6% Magazines 2.0% Cable TV 5.3% Internet YP 1.6% ERPM 1.4% Mobile 2.1%
  16. 16. 16 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. But, Online Advertising will Exceed Radio Advertising by 2017 We estimate Radio will generate $16.9 Billion in Local Advertising in 2017, with over $900 million coming from on-line/interactive, out of a Total Local Market of $152 Billion. Direct Mail 24.6% TV 15.1% Newspapers 11.5% Radio 11.1% Print YP 1.5% Online 11.7% Out-Of-Home 6.0% Magazines 1.7% Cable TV 5.8% Internet YP 1.9% ERPM 1.9% Mobile 7.1%
  17. 17. 17 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. The Local Advertising Pie is Increasing, but Only on the Online Side $105.3 $106.3 $104.5 $106.4 $104.9 $105.9 $27.9 $31.7 $36.2 $40.7 $46.6 $52.7 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 2013 2014 2015 2016 2017 2018 Traditional Online/Digital US$Billions Note: Numbers are rounded. 2013-2018 CAGRs: Total Media CAGR 3.6% Traditional Media CAGR 0.1% Online/Digital Media CAGR 13.6% $138.0 Note: Numbers are rounded. $133.2 $140.7 $147.1 $151.5 $158.6
  18. 18. 18 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Local Radio is Strong in Key Verticals Local RADIO advertising is diverse, generating over 10% of its advertising from five different verticals: Retail (18%), Financial/Insurance (17%), Restaurants (14.5%), Automotive (14%) and Technology (10%) - VS - DIRECT MAIL dominates ad spend by local retail advertising, garnering over 43% of total retail advertising in 2013 Despite declines in NEWSPAPER circulation, local advertising on Newspaper was $21 billion in 2013, representing 15.8% of total advertising and second only to Direct Mail TELEVISION still dominates the local Automotive advertising vertical, as well as the local Government/Political/Religion (“GPR”) vertical BIA/Kelsey’ Media Ad View Plus Forecast
  19. 19. 19 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Online Ads are Accelerating in Key Verticals ONLINE local advertising will exceed $1 billion in 2013 for six different advertising categories. Top two: TECHNOLOGY ($2.1B) RETAIL ($1.8B) ONLINE and MOBILE are the top growing ad channels. By 2017: REAL ESTATE will increase its online ad spend to 40.8% AUTOMOTIVE dealers will focus on video, spending 11.4% of their $2.4 billion online ad budget on video display Quick service RESTAURANT category (subset of restaurants) will increase its online spending from $434.4 million to $618.6 million
  20. 20. 20 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Drilling Down in your Local Advertising Market (Where the Rubber meets the Road)
  21. 21. 21 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. The Las Vegas Example: The Market • Market Rank: 42 • Population: 2.0 million • 30% Hispanic/10.9% Black/10.2% Asian • 435,000 men, 419,000 Women Age 25-54 • Retail Sales: $30.5 billion
  22. 22. 22 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Las Vegas Radio Competition • 46 commercial stations; 31 FM, 15 AM • 20 stations considered viable • $76.1 million in Radio Revenue ($4.3 million on-line) • 4 Groups account for 77% of revenue (Lotus-23%, CBS 20%, Beasley 18%, Clear Channel 16%)
  23. 23. 23 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. But, That is only part of the Story There was $940 million spent on Local Advertising in Las Vegas in 2013. Radio got just 8.2% of the Total Spend. This was less than the Nationwide average of 11.1% and Direct Mail got 26.2% TV got 17.7% Newspaper got 14.9% Pure On-line got 9.2% Mobile got 2.2%
  24. 24. 24 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Radio’s spend is projected to grow to $86.7 million in 2017 (slight decline to 7.8%), as the local Las Vegas Advertising Pie grows to $1.1 billion, and Direct Mail declines from 26.2% to 23.9% TV declines from 17.7% to 16.8% Newspaper declines from 14.9% to 10.9% while Pure On-line increase from 9.2% to 12.0% and Mobile increases from 2.2% to 7.3%*** and More Importantly…
  25. 25. 25 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Drilling Down into Verticals… Radio Advertising’s $9.8 million in Las Vegas Automobile Advertising in 2013 represented 8.0% of the $123.0 million spent in Local Advertising Cable TV 8.8% Direct Mail 12.2% ERPM 0.6% Internet YP 0.6% Magazines 2.1%Mobile 1.2% Newspaper 17.4%Online 8.2% OOH 1.9% Print YP 1.0% Radio 8.0% Television 38.0%
  26. 26. 26 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. And that… as the Auto Spend grows to $137.7 million in 2017, Radio’s share is projected to increase to 9.0% ($12.4 million). Cable TV 10.6% Direct Mail 8.8% ERPM 1.0% Internet YP 0.8% Magazines 1.8%Mobile 5.0% Newspaper 11.8%Online 13.1% OOH 2.1% Print YP 0.4% Radio 9.0% Television 35.7%
  27. 27. 27 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Plus,… for some reason Las Vegas is not a good market related to Automobile Advertising since Radio as a whole got 11.4% in 2013 and this is projected to grow to 13.1% in 2017 Cable TV 8.1% Direct Mail 9.3% ERPM 1.0% Internet YP 0.8%Magazines 1.2% Mobile 4.9% Newspaper 12.8% Online 13.0%OOH 2.3% Print YP 0.4% Radio 13.1% Television 33.1%
  28. 28. 28 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. There are Some Key Verticals to Watch The decline in Newspaper circulation and advertising in Las Vegas creates a real opportunity for the local radio stations to develop sales strategies. 2013 2017 Automobile 17.4% 11.8% Health Care 14.7% 11.6% Real Estate 19.2% 5.7% Retail 18.9% 14.1% Restaurants 8.8% 7.1%
  29. 29. 29 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. And Online Spending is Exploding for Certain Other Verticals in Las Vegas Search 40.4% Video Display 9.5% Other Display 7.7% Classified/V erticals 42.5% 2013: $3.5 Million Search 39.5% Video Display 13.6% Other Display 5.4% Classified/V erticals 41.5% 2017: $5.5 Million Full Service Restaurants
  30. 30. 30 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved.
  31. 31. 31 Proprietary and Confidential. Copyright © 2014 BIA/Kelsey. All Rights Reserved. Conclusions • Changing Consumer and Advertiser Behavior and Advertising Trends in Other Local Media will Identify Opportunities and Threats in the Different Business Verticals. • National Trends are interesting, but Radio Executives must drill down into what is happening in their Entire Local Advertising Market (not just the Radio Market) • Armed with this knowledge, strategies can be developed and your Sales Force mobilized and positioned for consultative sales in Targeted Business Verticals.
  32. 32. Thank You Tom Buono tbuono@biakelsey.com
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×