Thoughts on Media Spring 2021 1 INSIGHTS 2 IDEAS 3 INSPIRATION Issue No. 1, The State of Audio Experiencing Audio Some have said that audio is the most intimate form of mass-messaging available, since it's almost always an individual experience. Whether you are listening to the radio in your car, streaming a podcast while out for a run, or catching a new audio book on your train ride into work, audio is an immersive experience like no other, and the options for listening have never been better or more diverse. Despite the apparent explosion in audio sources in recent years, it still feels in some ways like we are just scratching the surface when it comes to using these channels for advertising success, and there continues to be a lot of misinformation around how to approach an audio advertising campaign. In this issue, we will explore the state of audio, and we will share our thoughts and insights around what types of media are available in this space, how it can be bought, where it fits in the user journey, how to measure audio channels, and where we find inspiration at Norbella. As always, if you have additional questions or thoughts on what we have shared, or general inquiries about media strategy, placement or analytics, reach out and we'd be happy to chat with you directly. Happy listening! Phil Decoteau - Director, Platform and Digital Media Insights A Shifting Audio Landscape? We are consuming more media than ever before - over 12 hours a day on average - but the current environment is becoming more fragmented, regardless of how it's being consumed. Audio is no different, and there are increasing options from which to choose. How is the changing landscape impacting user listening habits, and is terrestrial radio still a viable option for audio campaigns? It can be argued that no medium has ever actually been replaced, but new technology and distribution channels do continue to change where and how media is consumed. As behaviors change, the story about media changes, and the result of those misleading headlines often leads to misconceptions about the actual state of things. Emerging streaming channels like online radio and podcasts have increasingly led to concerns about whether terrestrial radio is still worth buying at all, and we often field comments and questions such as, “everybody is cutting the cord, and everybody only watches Netflix now" or, “nobody listens to radio anymore, everyone just listens to podcasts”. While there certainly is truth in the decline in some areas across media, it is incumbent on us as media professionals to act according to real-world trends, and, most importantly, make recommendations which are foundationally informed by data, research, and experience, and results. Below are 5 charts which highlight recent listening trends, which may temper some of your concerns about the state of audio: Let’s look at some Q1 National research from Nielsen’s Q1 2020 Total Audience Report: Radio (AM/FM and Satellite) represents the 3rd highest daily consumption of media, at 1 hour 39 minutes, which delivers an impressive 91% Reach against A18+. That 91% Reach is higher than other medium measured, and surpassed television a few years back, and maintains that lead, with television and smartphone tied for 2nd at 85% Reach. Audio is holding its own, the radio Reach number is nearly flat to 2019 (92%), and time spent is down only 3 minutes year over year. There is no question that the ease of access to additional audio platforms has increased audio consumption and has shifted behaviors, but terrestrial is still king of the medium, at least for today, and based on the data, for probably for quite a few more years to come. When looking at the Reach of other audio platforms you’ll see that radio continues to have a sizable lead (+27%) when it comes to reach, it even leads against A18-34 versus streaming audio (+9%). No doubt streaming is gaining, and this past year accelerated that growth with work from home becoming so prevalent. Where we listen is a key factor in what sources we listen to. According to the Infinite Dial 2020 report (below), 81% have listened to AM/FM in the car in the last month, with the next highest of owned music coming in at a substantially lower 48%. Still, there is a clear shift in consumption happening. Using the same Infinite Dial study, over the past 4 years, there has been a 14% decline in AM/FM radio listening, which is accounted for by an increase in owned and online audio. However, AM/FM continues to hold a sizeable 150% lead. Even outside of the car, radio is a key part of people’s days. The dramatic growth of in-home smart speakers allows more occasions for audio consumption and AM/FM leads in-home listening. According to Edison’s Smart Audio Report, measured Q4 ’19 – Q3 ’20, AM/FM radio holds a double-digit lead over Pandora, the next closest source. It is our job to follow the research and trends, to make informed and supported recommendations to our clients to help to drive their business utilizing media. Based on the information that is available today, we have found the following to be true: AM/FM radio continues to be not only viable, but a strong contributor to the average consumer’s daily media consumption. There are incremental shifts happening in listening habits, which are eating into AM/FM's dominance, but it is still early and radio still owns the marketplace. The rise in smart speakers has provided more listening opportunities, but AM/FM remains the leading source here as well. As always, it comes down to finding the right media mix for your customer and your business objectives, which likely means a combination of terrestrial and streaming audio to achieve meaningful reach in the marketplace. Greg Angland - VP, Client Engagement and Head of Broadcast Media Teresa Conant - Broadcast Manager Ideas Measuring Streaming Audio Streaming audio lives at the intersection of traditional and digital media, which often poses many questions for marketers and brands: Is it an extension of an awareness-based traditional radio program? Can it be used to increase brand interest and affinity? Is it a digital channel used to drive direct response? The answer is “yes” to all of the above. Streaming audio is a swiss army knife in a marketer’s tool belt, but because it can play different roles in a media strategy, it’s crucial to identify key metrics for success and have a measurement plan in place. So how do you measure its effectiveness? Or justify the investment? We can measure performance in relation to your campaign objectives: 1) If you’re using streaming audio as an awareness driver it would be helpful to use exposure, frequency, and penetration to measure connection with a given audience. 2) If you’re using it to build brand affinity it's likely that completion rate and engagement rate may indicate the message is resonating with the current audience, where greater likelihood of being included in the consideration set amongst competitors would indicate increased brand affinity. 3) If you’re using it to drive sales there are a few key metrics to consider: sales volume/lift, offer code redemptions (if applicable), and site traffic/quality. Vanity URLs can be effective in isolating and measuring site traffic from streaming audio partners... but keep it simple! For podcast programs, there are also attribution companies, like Podsights, that help to tie back website visits to a given campaign. Here’s how streaming audio spend breaks out by campaign objective for Norbella clients: Streaming audio performance can also be measured in relation to comparable channels. As media channels become more fragmented, it's helpful to acknowledge the potential benefit of each channel in attaining your campaign objective. Streaming Audio vs. Online Video While online video has the visual component, streaming audio may provide greater exposure to the brand message, with fewer people skipping streaming audio ads compared to online video ads (65% of people say they always skip online video ads, where only 8% of podcast listeners skip ads) (source: Adage, Podcasts Offer Brands a New Canvas for Connecting with Consumers, March 12, 2021). On both channels it is recommended that you buy non-skippable ad formats to guarantee the exposure to the brand message, however measuring completion rate. Streaming Audio vs. Radio There’s a growing opportunity to connect with your target audience across streaming audio, with a 32% growth in time spent listening to streaming audio since the beginning of 2020, and 53% of all daily listening streaming on digital where 54% listen to ad supported streaming audio content (source: Pandora, The Year that went Supersonic, January 2021). Less skipping means better storytelling With podcast ads, brands get more than three to six seconds to tell their story. In a recent study of regular podcast listeners, only 12% said they always skip ads. In fact, 33% of respondents said they “never or rarely” skip ads, and 38% said they do so “only sometimes.” (AdAge, March 2021) With the ad experience authentically incorporated into the content of the show, often through live reads, custom segments or brand integrations, the content feels native and intentional. Comparing these statistics to the 65% of people who say they always skip online video ads, brands can gain a great deal of creative opportunity. Podcast ads offer brands a creative canvas much longer than 15 to 30 seconds to tell their story. Captures user attention Due to the portable nature of podcasts, we know that often people are doing other things while they are listening—cleaning, exercising, walking their dog or driving. As a result, it is certainly worth exploring whether all of this adjacent activity compromises the saliency and effectiveness of the ads on podcasts. When surveyed, 48% of people who listen to podcasts say they pay more attention to ads on podcasts than on any other media—period. In fact, 86% of people who listen to podcasts say they recall ads on podcasts more than any other channel, with social ads at a not-so-close second at 80% (AdAge, March 2021). This is likely the net effect of all the other proof points: the ads go unskipped, users appreciate the advertisers that support their favorite podcasts, and they have won in the race for capturing human attention. Podcast ads may be audio, but they are definitely not noise. They are a unique ad experience that can help brands of all sizes find and authentically engage with the right audiences to scale while achieving long-term growth and greater advertising ROI. While measurement is still in some ways catching up to other channels, there are several methods to attach value to a streaming audio campaign depending on a campaign's objectives and approach. Kelsey Kelich - Associate Media Director, Planning Lauren Mraz - Analytics Manager Inspiration What We're Digging Now At Norbella, we're not just passionate about media strategy and buying, but we're also voracious media consumers! Discussions often turn to recommendations about our current favorite TV shows, podcasts, books, or other content, so we couldn't pass up the chance to share some of our inspiration when it comes to audio. Norbella by the numbers 81% of Norbellians listen to some a form of streaming audio every day, about half listen to terrestrial radio up to a few times per week. Most Norbellians listen to 1-3 podcasts regularly (at least 1x per week), while 2 people listen to 6+ podcasts in a given week. 73% of the company reports that their podcast listening has increased in the last 2 years. 73% of Norbella listens to podcasts in their car or while doing an activity, but only 27% listen while working. What we're listening to Bob Deininger - VP, Digital The Daily (New York Times): because it provides quick take on headlines and more in depth discussion of key current events The Prof G Show: with unvarnished opinion on business especially digital trends plus "algebra of happiness" which provides personal growth tips Broken Record (with Rick Rubin, Malcolm Gladwell): self-described "liner notes for the digital age", always great conversations with musicians and great tool for music discovery. Kelsey Kelich - Associate Media Director, Planning Work in Progress: Sophia Bush is the host aka Brooke Davis from One Tree Hill, need I say more? Up First: Gives me all the headlines I need to feel informed on what’s happening in the world in less than 15 minutes! Chicks in the Office: Their Bachelor recaps on Wednesdays helped me get through ‘hump day’ (well, that and wine) Mel Russel - Senior Digital Buyer Crime Junkie: like a lot of people, I love a good true crime story! I like this true crime podcast because it’s less of the detailed forensic information and more storytelling with respect to the victims. I typically listen to podcasts on morning or evening walks so it’s a great way to be engaged in a story without staring at my phone for a news report or video. The Daily: I honestly don’t have time to listen to this daily, but when an episode airs about a topic I’m interested in, I’ll make time for it. I especially like this podcast because the episodes are short and they only discuss the “need to know” points. I don't often read the news, so this is my go-to source (other than social media) for current events. Tim Dillon Podcast: I realized I only listen to the other two podcasts I mentioned, but my boyfriend listens to Tim Dillon religiously. He said he likes it because he discusses current events in a shockingly absurd way. Let's Talk Norbella is a media strategy, planning, and buying partner for smart agencies and marketers. 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