Radio InSights

Social Media Fails to Deliver

U.S. companies spent a combined $5.1 billion on social media advertising last year. According to new research, it appears most of the money was wasted.

Gallup research found that two-thirds of U.S. consumers say that social media has no influence on their buying decisions. The conclusion of the authors:

“Social media are not the powerful and persuasive marketing force many companies hoped they would be.”

That’s an understatement. Only 5% of those polled felt that social media has a great deal of influence on their purchasing decisions.

In another study Nielsen (paywall) found that global consumers trusted ads on radio in addition to television, print, and billboards more than social media ads.

Radio Insights recently pointed out that fraud is rampant in the video ad business with more than half of online video ads never seen, and that an equal percentage of  banner impressions served on advertising networks and exchanges are never seen.

Now it turns out that social media is ineffective.

It makes one wonder how many products and services are losing out because they are pulling dollars from radio and other traditional media so they can buy online video ads, banners, and a Facebook presence.

NPR: Canary in Radio's Coal Mine?

Digital. That’s the future.

Over-the-air radio is sooo 20^th century. Broadcasters must shake-off their rear-view-mirror attitudes and nostalgic musings, and get on with digital!

That’s what broadcast critics tell us. "The future doesn’t care who the winners are, and listeners don’t care about your margins," we’re told.

Listeners might not, but you probably care about your margins, and revenue too.

All this locker-room pep-talk punditry about digital might be inspiring if it didn’t fly in the face of the financial facts of digital.

Local broadcast radio generated $889 Million in digital revenue last year. Pandora, the music service that claims to have more listeners than most radio stations had advertising revenue of $521 Million.

In other words, this backward-thinking ludditious industry did 70% more digital business than the darling of every radio critic, Pandora.

Let that sink in a little.

In a 2010 post entitled Radio’s Digital Future Revealed Radio Insights noted NPR’s aggressive digital initiatives. According to then NPR CEO Vivian Schiller:

We are agnostic about whether somebody listens over broadcast or listens to the exact same radio stream on the Internet. As younger generations are consuming content on their cellphones or on their iPhones or on their iPads or on their Android phones or whatever, we want to make sure that we're there.

As we noted at the time NPR was following the game-plan of those who declared that radio must move faster, lest it miss the digital revolution all together.

Ms. Schiller went on to predict that in the next five to ten years Internet radio would take the place of over-the-air broadcast radio.

Four years later, Ms. Schiller is no longer with NPR, and 93.6% of NPR listening is still done the old fashion way, on broadcast AM and FM stations.

There’s still time for Ms. Schiller’s prediction to come true, but online listening trends for NPR are not encouraging. As the graph at left illustrates, Triton Digital shows a steady decline in the rate of streaming growth for NPR stations.

In an analysis of NPR streaming Steve Mulder, director of user experience and analytics at NPR Digital Services noted:

In a comparison of the year-to-year data, the cumulative audience for pubradio streams dropped 9 percent. And while visitors were listening to a wider variety of content, the total amount of listening time per streaming session remained flat, at about an hour.

Live streams total only 6.4% of NPR consumption. That, after four years of an all-out digital effort.

NPR is radio’s canary in the digital coal mine.

If a multi-million dollar attempt to transform (don’t call it radio) NPR into a digital product is already sputtering, what’s the likelihood we’ll be melting down broadcast towers and turning them into wind turbines anytime soon?

Broadcast spots brought in $14 Billion (that’s with a B) last year. Yes, its not as much as the in the past, but then again what is radio doing to protect its share, let alone grow it?

How much innovation have you seen on the broadcast side of the business?

Sorry, talking about Twitter and Facebook on the air is not tranformational. Where are the new formats? Where are the new morning shows?

Name one thing that local radio has done in the past five years that we’ll still be talking about five years from now.

Where would Clear Channel be today if they put as much energy into their radio stations as they do with iHeartRadio?

Too many broadcast leaders share Ms. Schiller’s view of the future of broadcast radio. They have given up on local radio.

And they have no idea on how they are going to replace that $14 Billion of revenue.