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Beth Anne Cobb

on 1 October 2014

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Transcript of Radio

Radio Advertising
Ryan Moore I Becs Yeager I Tory Looney I Audrey Bell I Beth Anne Cobb
It was formed in 2008 and through 2013, Sirius XM has 25.6 million subscribers.
As of 2012, Sirius XM had a 60% penetration rate in the new car market.
Out of that 60%, approximately 45% have become subscribers.
The company has long-term deals with General Motors, Ford, Toyota, Kia, Bentley, BMW, Volkswagen, Nissan, Hyundai and Mitsubishi, along with assorted trucks, boats and recreational vehicles.

Sirius XM radio content is available to stream online as an add-on to existing subscriptions, or as an Internet-only option.
Internet and mobile services directly challenging Sirius XM include Pandora and Spotify.
In order to better compete, SiriusXM announced that the company would start offering a personalized interactive online radio experience, similar to Pandora in August 2011.
Roughly half of SiriusXM channels sell advertising time to clients and advertising agencies. These are primarily “spoken word” programming channels that run the gamut of topics, including:
News (CNN and CNBC cable TV simulcasts)
Talk (conservative and liberal programming, truckers, GLBT)
Sports (ESPN, Fantasy Sports Radio)
Comedy (Raw Dog Radio, The Foxxhole).
While SiriusXM does promote its total number of subscribers and provides some guidance to who’s listening to what, the satellite service steadfastly refuses to release audience information for individual channels.
Advertisers have no idea if 100 or 100,000 people are hearing a specific message on any given channel, perhaps accounting for the high mix of direct response advertisers who live-and-die by measuring and managing results, rather than counting gross advertising impressions.
Started in 2000
Put in the name of a favorite song, artist, or genre into Pandora and it will quickly scan its entire world of analyzed music to find songs with interesting musical similarities to your choice
Can create up to 100 unique stations
Ability to increase personalization with thumbs up/thumbs down feature

Founded in 2006, but launched in 2008
Free version with some advertisements
Premium version for $9.99 a month
Able to play any song, anywhere
Able to download music and listen offline
Offers student discount for $4.99 a month
No ads

The average cross-platform user spends 146 minutes a day listening to spotify
According to Edison Research and Triton Digital, the average listener’s weekly time spent listening to digital audio has more than doubled since 2009
75% of listeners say commercials are a fair price to pay for free audio content
Every week, an estimated 94M consumers listen to digital audio, making Spotify the ideal messaging platform for any brand
40 million users with 10 million subscribers in May 2014

Radio History
Uses Pandora’s 100% registered user base which provides age, gender and zip code
Also uses other insights such as interests and psychographics
Uses precision targeting
Free version with many advertisements
$4.99 a month for ad-free version
Over 150 million members in 2012

AT&T's station, WEAF, created the first "toll broadcast" (which we now know as a commercial) in August 1992. It was bought by Queensboro Corp. in Jackson Heights, Queens, New York City.

The buy was for $50 to play a 10-minute spot once a day for five days. They quickly sold three apartments, establishing viability for the medium.

Radio begins to mature.
During this decade, advertisers - through
their agencies - owned and controlled entire programs, and hired/fired talent.

Radio was the voice of the war effort during WWII. Entertainers soothed the public and new reports informed their audiences.
TV arrives in the late 1940s which
created a struggle against radio.
Radio continued to struggle against losing listeners and advertisers to Television.
As FM radio began to take hold during the 50s and especially the 60s, a movement towards multi-sponsored advertising emerged.
Instead of broadcasting variety shows to directly compete with television, radio stations began broadcasting rock and roll music among other genres.
Corporations picked up on the transformation and sought to promote their products on multiple frequencies throughout the entire day.
However, more sponsors meant less air time for each commercial, and the length of a standard commercial decreased. In the 60s and 70s, commercials averaged around 30 seconds.
Advertisers needed more creativity in their ads beyond a simple jingle.
Commercials started to take on comedic qualities or tried to act more conversational as opposed to previous commercials where companies utilized experts in certain fields to persuade consumers.
Another mean of advertising included the usage of celebrities in commercials.
N’Sync was used on a Chili’s commercial and Britney Spears was used in a Pepsi ad during the 90s and 00s.
The necessity for companies to stay current with popular trends and culture took hold of advertising and weaponized comedy and pop-culture icons as talking advertisements.
The cost for advertising on the radio is done on a per-spot basis.
You will be charged every time your ad runs. So, if you want your ad to run 5 times per day for 5 days you will have a total of 25 ads.
If you have an single price ad rate of $10 per ad you will be charged a total of $250 dollars for the 25 ads. (and you thought high school word problems were never used in real life!)

While the cost depends on many factors, the primary one is how many people will be listening. Below are ballpark figures for weekly advertising costs, based on advertising with a top performing radio station using a schedule that includes 15 Monday – Friday spots and 4 weekend spots.
New York City, Los Angeles, Chicago: from $4000 to $8000
Dallas/Ft.Worth, Houston, Phoenix, San Diego: from $2000 to $5000
Denver, Cleveland, Kansas City: from $1000 to $3000
Akron, Wichita, Baton Rouge: from $800 to $2000
Myrtle Beach SC, Green Bay, Topeka: from $500 to $1500
Advertising Costs:
Sirius XM Holdings is an American broadcasting company that provides two satellite radio services operating in the United States: Sirius Satellite Radio and XM Satellite Radio.
Sirius XM
Large audience
Can pick the specific program you want to advertise on
Since many people listen in the car there is an opportunity for a listener to be exposed to a message many times

An advertiser doesn’t know if 100 or 100,000 people are listening
There is no demographic information released about listeners so advertisements can only be placed based off the program types
There is no way to geographically target these ads since it is a national radio

Spotify also offers the aspect of a social connections.
Able to search for friends
Can search for other peoples playlists
Able to share a song with a friend
Sharing and
Around 77% of adults tune in to an advertising supported AM/FM station. The average listener, spends almost 2 hours (109 minutes) per day listening to AM /FM radio.

In the United States, there are over 11,000 commercial radio stations. While there are 50,000 Watt stations which reach large geographic areas. Many stations reach relatively focused geographic areas. By picking the right station, you will be reaching people that are potential customers.
AM/FM Target:
Source: Nielsen Report - See more at: Radio Advertising Guide: How To Get Started Today
Why Kashflow stopped using Spotify for their advertisements–

"When a user clicked the ad box in Spotify it worked really well – we knew exactly how many clicks we were getting and how many people signed up to try our accounting software. But there’s a problem – this isn’t how people use Spotify."
There are lots of ‘half solutions’, like sending people to a specific URL or asking them to Google a specific term, but the reality is that the majority of people will still just Google ‘KashFlow’ ".
Spotify and Kashflow:
There will be greater developments in the ability to measure the effectiveness of online and digital radio.
Advertisers will continue to use AM/FM radio for more local businesses and more national brands will continue to use online and digital media.
However, due to the ability to geographically market through large radio companies, local advertisers will begin to use this outlet more often.
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