As OMD’s US Director, National Audio Investment, Natalie has 30 clients to stay on top of-including Lowe’s, State Farm, jcpenney, H&R Block, Frito-Lay, Levi’s, Pepsi, McDonald’s ToysRUs, Walgreen’s, Wells Fargo and Visa. Over the years, she has been an advocate for radio and the audio medium in general, letting her voice be heard on a variety of issues, including accountability, research, marketing and new media. As a veteran in the business with over 30 years of Agency and Sales experience in radio, she has a unique perspective on the evolving media landscape and its challenges:
Tell us about the impact of data and research on buying decisions today versus years ago.
There are no decisions made today without the analysis of data by every party along the way. That means the marketer and the agency and all of the people involved with modeling and ROI review. Procurement groups are involved. Budgets are not released until the plans have been vetted and we have shown them what the yield is on their investment. It used to be that they would just authorize the budget based upon a plan of “Radio-100 GRPs” and that was it. Clients are much more involved in the detail of the buys than they used to be. It is the pre-buy they now want to see. The procurement and financial people need to make sure that any dollar is well-spent. We have to arm the clients with the right information. In terms of the cost, and the value that we are held to, it’s very tight. Everything has to be valued and measured, whether it’s an event sponsorship or a program integration or any creative element. They need to see all of the detail in advance: the entities, the properties, the reach and frequency, the market deliveries are, added value, etc. Radio performance is reviewed with other media in continuous modeling for media mix optimization and we have to show productivity so that we get the investment vs. another medium, as well. So, we have to continue to prove our value. They then have a sense and expectation of what the return is going to be. We have to make sure that we are delivering against that. It is really more like financial investing than it is like “Mad Men.” We actually do hire people from Wall Street, from the financial industry. We are building dashboards. All of our decisions are based upon data and analytics. The available data is significant and we have to absorb and review all of it. It is as much a science today as it is an art.
Wow. That’s fairly complicated.
It is big. And that’s just before we get the money. Then we have to talk about what happens once we are approved to buy and then after we’ve placed the buy. An interesting way of looking at it is, when you compare traditional broadcast of the past with digital or streaming mechanics. Virtually all of our effort in traditional media was done on the front end with audience estimates, we spent a lot of time reviewing the station lineups and properties. Buyers used to spend more time on the front end, especially when you think about television and all of the program estimates to ensure that you are not overpaying since there was no cash back or changes once schedules were purchased-only audience makegood for underdelivery and a post-analysis somewhere down the road.
Then, digital came along and put the emphasis on the maintenance and on the back end. The maintenance piece is “what did I get today and how do I optimize tomorrow, and how do I pay only for what I am getting in terms of my delivery today, and obviously the back end changes to costs estimated”. Digital didn’t spend a lot of time on the front end. The idea was “you will just pay for what you get” but it requires significant resources in daily maintenance, changes to schedules and cost resolution.
So, we are bridging the learning from both media types, traditional and digital, to get the front end on the digital side and the maintenance and the tracking better on the traditional side. That’s the way I look at it. So at the end of the day, we are now doing so much more. The estimating has gotten more complex, with PPM data and increasing change to programming and networks, limitless fragmentation and new suppliers and you can’t just give clients a post 90 days after it airs. That doesn’t work anymore. We have to get much better at real-time tracking and posting and the summary of the analytics after the campaign runs, and feeding that into other teams, so that they can review and adjust and work on planning going forward.
We’re doing much more to bring digital closer to traditional . They have to deliver against planned. It’s not just about paying for what was delivered, with money returned and impressions lost. It’s all about delivering the plan precisely, and improving transparency because the plan was based upon optimized modeling tied to sales and proven results.
Who do you use for monitoring all of that real-time data?
We are working with our Annalect division to build dashboards. It’s part of Omnicom’s offering. So that we can import the Media Monitors, Arbitron, and Triton data. As the medium gets more and more complicated, we have to find smarter ways of being efficient. Those means have to come from technology, because there’s no other solution. It has to come from the partners holding up their end on technology, and working with us on electronic reporting, and data flow. Also, one of the things we’ve been talking to the networks about is streamlining their product offering. There used to be dozens of larger networks. Now there are 100’s of smaller networks. We have the same number of radio stations as we’ve always had. But, it is the way that we purchase them that has become more difficult. We are trying to talk to them about finding a way to streamline. I don’t know how much of that becomes trading. At the end of the day, you do what Google audio was doing and then with better research extend to programmatic. Via trading we could match what we are looking for, in terms of stations or dayparts, match something nationally that mirrors our client’s footprint mapped to sales by region. That’s really what we should be doing. But, right now, we are taking the network’s offerings and trying to optimize them to match coverage and major markets, and overall balance. But it does not precisely match client’s goals so there is inefficiency.
We are hoping that soon, there will be more flexibility and customization. It is inevitable because digital media does this well. Digital continues to take money from traditional so there will need to be change to survive. We need to be able to purchase in a different way. Now, networks take their stations and put them into fixed networks that they’ve decided based on a certain demographic. But, it is arbitrary and not customer-focused. It’s not working. It’s broken.
This leads us into the question of why do you think network radio ad dollars have taken such a hit over the past year or so?
We don’t call it network radio anymore, because the medium is now larger and includes the station groups. Once Clear Channel, Cumulus, and CBS became fully national thru consolidation, they were able to compete in the National radio arena. It’s been a few years now. They are able to customize by market and give us only the formats that we want. They are pretty easy to deal with, because we are getting information on stations and not via a network that translates to a station. It is really more direct. So national spot and network lines have blurred. The budget for national radio has grown but it encompasses more of radio.
So the RADAR rated networks have taken a hit because of it?
Yes, because there is much more national inventory in the market and these other companies have gotten very good at marketing and offering live leads at the station level, and offering integration. Again, the major piece is the customization of these lineups that match your client’s needs to some degree. It’s not exactly where we need to go, but it is certainly more enhanced than buying a fixed network, where I get one spot on each station. If you remember how we used to buy, you wanted ten spots on each station, or five or six. When I buy a network, I could be getting one spot on each station, or two. So I have to piece together all these other networks to come up with 6 or 10. If I buy a station group directly, I can buy as many as I want. It’s different. We take the two pieces and we put them together, and you end up with a national medium, a larger national medium. Then, also, you add the streaming audio to it, the satellite radio to it. You see what happens to network radio.
How can radio increase its share of advertising dollars on a national basis? I know you want to say, “Make it easier for us”.
Yes. Obviously, the technology has to be employed. Right now, it’s really cumbersome on a national level. We have had issues with Rush and the controversy and the ad serving is very difficult. It’s still, believe it or not manually done, and the networks have to rely on thousands of individual radio stations to insert the copy. That is not the best use of anybody’s energy and fraught with the possibility of human error. Right now, the station, unfortunately, is overwhelmed. Each one is affiliated with multiple networks. And they are getting copy from all of them with separate instructions for each property. So, of course, this takes time and they are going to make mistakes. This should all be completely seamless, automated and in real-time. The systems are not designed for today’s competitive realities. You can get on air more rapidly in local, TV, and in digital.
What about the multicultural effect on the marketplace?
The marketplace not only includes general market suppliers, but several dedicated to multicultural as well. A client’s once broad Adults 18-49 target with one buy might now include several separate efforts targeting: young men, young women, Hispanic and African American segments with distinct budgets and creative and the marketplace includes specialized multicultural suppliers as well.
Now, you see many of the larger companies enhancing multicultural in addition to digital offerings.
Is it really just easier to buy digital to get what you need done?
No. Digital has its own issues. The data isn’t organized yet and operations are not standardized. Listening patterns need to be assessed with more usable data published and available to the Agencies for sophisticated buying decisions. Radio companies do need to immediately streamline and invest in technology to make the ad serving better and product offering more tailored to client needs and more like the digital process.
Any new innovations or good progress that you’ve seen?
What is working exceptionally well is in the creative realm with music and live events, they are all integrating with social media and digital media and on site and activation. What they can offer a marketer today is unbelievable. Each company is doing something innovative.
Are the upfront days pretty much done for radio?
Less upfront certainly and much more flexibility for those who do buy upfront. The rules are less stringent with more flexibility built in. Television is still largely upfront with digital mostly purchased monthly. Radio is in between and everything is moving closer to air. We are seeing increased changes to schedules, to targets, to all of it. The advertisers need to react to today’s sales data. They didn’t used to have that data. But now, they have a read on everything. They need to boost sales next week, or for the next three weeks. They are calling us to implement and effect immediate changes. And those who are nimble, flexible, speedy and prepared will benefit. That’s why the operations and the tools and the systems needed to improve yesterday. We don’t have time.
If you can’t get them on the air tomorrow, they are going to go elsewhere, and that’s lost money off the table.
That’s lost money that may go to digital. You see the effect of that on print media. They had the longest deadline of all. If you look at it that way, you can see why some of those media are being effected more dramatically. Radio is in a much better position in very many ways. The integration of streaming and broadcast is easier and the addition of pure play to the mix has only enhanced the relevance of audio. The addition of visual elements available now via online devices is another advantage. These are exciting and challenging times. Continuous reinvention is critical.
–Carl Marcucci
