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The Bridge Ratings Analysis: Social Media Impact

 

For Immediate Release

Wednesday June 30, 2010

Digital Preparedness Study

Is Terrestrial Radio Ready for a Digital Future?

This study reflects an industry's awareness of the need for rapid digital transition and its frustration with an inability to act.

The word has been out for some time now; the warning to all entertainment and media companies is "adapt to the consumers' preference for online and mobile platforms or be forgotten."

Terrestrial radio has been exposed to the potential of increasing audience and advertising revenue through digital platform transition, but this new study by Bridge Ratings pinpoints just how unprepared they are.

In a study released in June 2010, Bridge Ratings focused in on the impact that social media marketing can have on any business. Terrestrial radio was included in this study. Results of a very specific four-week marketing process called "The Social Marketing Hierarchy" showed that over time and with repeated and proper messaging terrestrial radio's tune-in occasions were positively impacted. (see chart below).

Yet, whether the tool is social network marketing, loyalty clubs or increasing online listening, terrestrial radio executives seem to have their hands tied.

Bridge Ratings spoke with 242 general managers and/or market managers in the top 150 radio markets to better understand what's preventing them from being more proactive when it comes to digitally transitioning their businesses. (a)

The study was conducted during the month of May and June 2010 and while there are some market size variances the general complexion of the study can be ascertained by looking at the average among all executives that were interviewed.

When asked "What is preventing your station(s) from having all the digital resources they need to build audience and increasing billing?", the responses break out as shown in the following chart:

While these key obstacles rate very high for all stations, the two of greatest concerns are Budget (92% of GM's responding) and Know-how (91%) or having the properly trained and managed personnel dedicated to their digital efforts.

The fact that costs and personnel assets to direct and operate digital strategies are the number one and two issues makes sense since they are inextricably tied together; station management can't have one without the other.

And while staffing a digital department ranks as the third obstacle to effectively moving forward more quickly, it is clear by these interviews that traditional radio's executives find themselves between a rock and a hard place; the desire to move faster is there yet the resources are not.

The Light at the End of the Tunnel

A simultaneous national Bridge Ratings study conducted among 2611 persons ages 12 and older underscores the urgency related to terrestrial radio's rapid adoption of all things digital.

The following chart shows media use among this sample. Two findings are quite clear:

  • For the immediate future terrestrial radio should maintain it's weekly listenership penetration and
  • Internet radio and social networking show the greatest growth.

However strong is weekly tune-in to traditional radio stations (AM/FM), time-spent-listening is the continuing concern for the immediate future as more consumers of radio find alternate entertainment sources.

What is the potential impact on terrestrial radio?


According to this sample (b), less than ten percent had recently come in contact with a social network communication sourced from a radio station. This chart tied to the previous chart, highlights the importance of radio's use of these tools and that the light at the end of the tunnel is the social networking train coming on fast.

The Real Impact

Of those who had communicated with a terrestrial station through a social network, the power to move them to action was quite clear as shown in the following chart:

44% were motivated to visit the station's web site and 38% indicated they listened to the station in question by virtue of some social network contact whether through Twitter, Facebook or any one of hundreds of social network entities. (c)

All indications suggest that social media marketing is and will play a major role in the future business success of traditional radio where it is very feasible for radio's analog universe to interface with powerful digital tools.

Mobile Consumption

The mobile future presents yet another opportunity for traditional radio as part of being prepared.

91% or 285 million Americans own cell phones. Activity on cell phones is no longer limited to a simple phone call for most users. The cell phone has become a hand-held computer and consumption projections provide insight into not only which activities are growing but which offer the best opportunity to marketers.

In this latest Bridge Ratings study, 2311 panelists were asked about their current and potential use of cell phone activities. This chart expresses these interests as the percentage of panelists who expect to use the activities more in the next 6 months based on their current usage. (d)

Social networking (29%), Text messaging (25%) and Tweeting (22%) are mentioned most often with Internet radio streaming in a close fourth position. All of which provide outstanding business growth opportunities for terrestrial-based radio businesses.

Listener Interest

What do radio consumers want most from their favorite radio stations?

The study produced some interesting results that perhaps had not been anticipated by today's digital managers at terrestrial radio.

  1. Lifestyle information ranked highest among all study participants ages 15+. Lifestyle information varies by format, of course, but the key to understanding what is meant by this category is that most listeners are not getting a variety of information from their favorite station's websites or other digital media. Ask your own station's audience what they want in this category and give it to them.
  2. Music information continues to rank high with 57% responding.
  3. Communicaton between listeners and air personalities ranks high and Twitter interaction an Instant Messaging are at the core of that need.

And how well is terrestrial radio satisfying these needs?

According to our study, not very well.

  1. Only 24% of the sample were satisfied with the amount of lifestyle information catering to their lives that was offered by their favorite stations.
  2. While 79% were feeling good about radio's music information offered, there is room for improvement in the area of Twitter communication (59%),
  3. And...Instant message access to air personalities (52%)
  4. Yet, the most obvious opportunity for improvement for radio's listener engagement and revenue is building Exclusive Social Networks, or social neworks like Facebook or MySpace for just your station listener community. Only 15% of those responding felt radio was delivering on this front.

Epilogue

Over the last two years the digital landscape has rolled out much faster than expected. While the Internet has been pervasive for years, its power on a personal basis has been exposed through social networks and the speed with which communication travels.

Knowledge is the most combinable thing humans have, but taking advantage of it requires special conditions: the size of the community, the cost of sharing that knowledge, the clarity of what gets shared and the cultural norms of the recipients. No other environment exemplifies this more than the Internet and its communication capabilities.

Terrestrial radio management in general seem to be getting the message that leveraging the Internet's tools to further its business is a critical component of future growth and success. Intellectually it is clear. The ability to empower the radio business as a whole is stifled by recent economic developments and corporate rationale concerning reinvesting a greater portion of profit margins.

This study reflects an industry's awareness of the need and its frustration with an inability to act.

Entertainment and media companies that figure out how to apply the digital tools to their business models will escape marginalization. In the old days, the speed of change was manageable in an environment where the ability to act was sometimes detained due to operational limitations.

In 2010 the luxury of waiting to act is more of a detriment.

Samples:

a) Market managers - 242 persons in top 150 U.S. radio markets
Methodology: random telephone digital dialing among all stations in designated markets. Error +/- 6.2%
b) Social Networking study - Total sample universe: 5500 persons 12+, minimum Internet usage 1 hour per week, random digital dialing, 22% cell phone only, error +/- 1.4%
c) Social Networking study - Social Network contact: 495 persons 12+, error +/- 4.5%
d) Mobile Consumer Usage study - Total sample universe: 2311 persons 12+, random digit dialing, daily cell phone usage, error +/- 2.1%
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