The radio industry admits it needs a makeover.
National ad revenue is flat; consumer listening patterns have become unreliable, and radio personality Howard Stern is moving to Sirius Satellite Radio by the end of the year.
But changes are in the works, and media buyers expect radio can reap better results this year, thanks to some key industry initiatives and some intriguing new audience trends.
Just two weeks ago Viacom's Infinity Broadcasting Corp. kicked off a trade campaign. Tagged "How far will you go?" the ads play up results of radio advertising that drove people to sign up for more information at a marketer's Web site, such as an effort for DaimlerChrysler. Infinity says it's pledging to cut its ad inventory by up to 20% on up to a third of its stations.
That follows No. 1 operator Clear Channel Radio's "Less is more" initiative announced last July , aimed at improving the listening experience by reducing commercial clutter by 20% across its 1,200 stations nationwide, and making spots shorter and more effective.
In Clear Channel markets such as Louisville, Ky., the company's FM stations went from 12 minutes of commercials per hour to 8, and AM stations went from 16 minutes per hour to 14. Included is new, premium pricing for radio commercials placed at the beginning and end of a pod. It's too early to tell how the moves will affect radio ratings, but media buyers say early indications are positive.
less is more
"Radio's leaders met with a lot of buyers and planners over the last year, and one of the points that emerged about what's wrong with radio is clutter, and they're working to fix that," says Kim Vasey, senior partner-director of radio for WPP Group's Mediaedge:cia, New York. "If Clear Channel's moves result in better ratings and increased consumer acceptance of radio, we'll see more companies adopting the less-is-more idea," Ms. Vasey says.
Clear Channel is also addressing another complaint raised by media buyers: It's making an effort to improve the creative and trim most radio spots back to 30 seconds from an epidemic of sloppy 60-second spots. The company has established a new Creative Resources Group to help advertisers devise better, more targeted radio commercials designed to fit particular broadcast environments and audience preferences.
"It's highly unusual to have [radio] sales people with creative training. This is a very significant development," Ms. Vasey says.
Radio's other bright spot includes the rise of Spanish-language radio, whose ratings and audience share continue to grow each quarter.
As it picks up momentum, Hispanic radio programming is becoming increasingly complex and differentiated, says Rosa Serrano, senior VP-account director for multicultural media for Interpublic Group of Cos.' Initiative, New York. "We've seen overall double-digit growth in Spanish media in general, and radio is getting a lot of that," Ms. Serrano says.
Other formats on the rise include "hot talk," which is "more free-wheeling and less conservative" than traditional talk radio, says Aaron Cohen, exec VP-director of broadcast for New York-based Horizon Media. It tends to attract younger male listeners ages 18-34, he says, and reveals new "pockets of audiences."
Christian radio, which gets little coverage, also saw major gains last year, according to Linnae Young, VP-general sales manager for Salem Radio Representatives, the sales arm of Salem Communications, which owns 104 stations nationwide. "Last year while the radio industry as a whole struggled, our revenues increased 36%," says Ms. Young. She cites "explosive growth" in all major product categories, with advertisers including Walt Disney Co., New Line Cinema, Paramount and Sony Pictures; retailers including Wal-Mart Stores, and automakers including BMW of North America, Toyota Motor Sales USA's Lexus and Chrysler Group's Dodge.
"Our biggest advertising growth and ratings are coming from Christian rock, which is popular among women in their 30s who want to listen to something wholesome with their families," says Ms. Young.