Three Things for March 17, 2022
This week: So how is radio doing these days? Plus, the great Smart Speaker stall. Plus where is the advertising spend going in podcasting?
Before we get to this St. Patrick’s Day edition of Three Things, I want to invite you to join me for A Conversation about Public Media and “The Great Resignation" on Thursday, March 31, 2022, at 4:00 pm (Eastern).
The response from the February 2022 survey of stations indicates there is a lot of stress in the system regarding recruiting and retaining talent at public radio and television stations.
Please join your public media colleagues for a 60-minute dialogue about ideas and potential solutions to help public media organizations surmount this challenge and thrive in the months and years ahead.
You can register at this link, and you'll be receiving an email with details about participating in this Zoom session on March 31. Thanks.
THING ONE: So How Is Radio Doing These Days?
Next Week, Edison Research will give us the first look at The Infinite Dial 2022 at Podcast Movement: Evolutions in Los Angeles (more on that in next Monday’s Three Things Datebook).
Until then, we have Edison’s ongoing Share of Ear study that takes an in-depth look at the share of time Americans spend with all audio platforms together.
Earlier this month, Westwood One (WW1) provided details on the most recent Share of Ear study1 representing a one-year rolling average through the 4th Quarter of 2021. It’s important to remember that the data shared by Cumulus seeks to put a favorable spin on its commercial broadcast properties. However, it’s still valuable information for public radio to take note of by looking at the current media landscape.
So how is radio doing these days?
While the headline says that AM/FM radio dominates, which it still does, the 40% share of listening continues a downward trek for broadcast radio. 18 months ago, this same study had AM/FM with a 43% share of listening (a drop of seven percent). Music videos on YouTube and podcasts took some of that share over the past year and a half.
In August, I offered several slides from the study through the 2nd quarter of last year, and AM/FM radio’s share has crept up a bit in the past six months as in-car listening has increased with more people resuming out of the home activities.
One of the other trends that the WW1 slide deck reinforces is the increased amount of listening to AM/FM streams versus over the air. The chart below tracks this trend over six years for persons 18+.
Streaming as a percentage of AM/FM listening across all demos over the same period increased from 7% in Q4 2016 to 11% in Q4 2021. Among persons 25-54, 14% of listening to AM/FM is to a station’s stream. This is nearly double from 2016 (8%) as more digital natives move into that age demographic.
Last week, Inside Radio offered its analysis of the latest study noting the significant decline in the share of listening to Pandora over the past six years as Spotify filled that role in the music pure-play space.
The Westwood analysis also shows ad-supported Pandora's share of audio time spent has declined by 47% since Q4 2016, from 7.1% to 3.8%, while ad-supported Spotify's share has stood still at 1.6%.
“Pandora is collapsing – they've been in a steady erosion over the last five years or so, and ad-supported Spotify is small and never grows,” Cumulus Media/Westwood One Chief Insights Officer Pierre Bouvard says. “Same thing for the ad-supported channels of Sirius XM which are the spoken word, always a very small share for them.”
Another platform that’s in the WW1 deck shows the continued growth in podcast listening, although there was a bit of a fallback in the share of time spent listening last quarter.
However, the study is quick to point out the power of podcasts with younger audiences as one out of four 18-34 year-olds listen to at least one podcast in a typical day and nearly one in five age 25-54 listen daily. The study also notes that most podcast listening happens at home (69%), with only 12% of time spent listening to podcasts taking place in the car.
The final takeaway from the latest Share of Ear study notes the power of AM/FM radio in the car with 59% of the listening time spent while driving.
Overall, persons 18+ spend an average of one hour and 37 minutes with AM/FM radio daily. That's far ahead of daily minutes listening to digital audio services, with the average daily minutes for Spotify and Pandora – whether ad-supported or ad-free/subscription-based – at 16 and nine minutes, respectively2.
The study also looked at smart speaker listening and found that a quarter (26%) of smart speaker listening time to ad-supported media goes to podcasts. That compares to a 43% share for AM/FM radio.
THING TWO: The Great Smart Speaker Stall
While we’re on the subject of smart speakers, I’ve been tracking the roller coaster ride of smart speaker adoption over the past year with this newsletter. A new report3 from Voicebot.ai suggests a continued stagnation in adoption with projected growth of 4.6% this year, compared to a 32% year-over-year increase just two years ago.
This analysis confirms what we’ve been seeing over the past year that smart speakers are no longer a growth story in terms of a rising user base. The growth trajectory of voice assistants was on a path in 2020 to achieve 50% ownership in the U.S. during this decade, but the growth has slowed to the point that it may take three more years to reach 40% saturation.
The study reveals how little the list of top features has changed over the past few years.
Streaming music, radio, questions, weather, timers, and alarms consistently lead the list of the top monthly and daily features accessed. You can see an even split of two entertainment, two information utilities, and two automation utilities among the top six use cases. All of these use cases were popular from 2018 onward.
Their use profile shows high frequency and stability but not significant growth. They started high and stayed high. Future growth in voice app use will come from other categories.
According to the report, pandemic-related behavior changes actually led to an increase in usage among the majority of smart speaker owners. That rise in use has had some staying power, but much of it reverted to the pre-pandemic levels as consumers were able to get out of their homes more easily in the U.S.
The report’s author, Bret Kinsella, Research Director with Voicebot.ai, notes that the devices' biggest potential for use case growth is built around the smart home. “While 44.6% of all smart speaker owners have tried smart home features and 26% become daily active users, among smart home device owners the figures are 60.5% and 37.0% respectively,” Kinsella adds that “this moved up significantly since 2018 as more families adopted smart home solutions.”
A fascinating piece of this study compares the lifecycle adoption journey of the smart speaker versus the smartphone, as demonstrated by the graphic below. The model, known as the Technology Adoption Curve (TAC), was created at Iowa State University in the 1950s and helps segment consumers based on when they adopt a specific technology and offers a way to differentiate their interests and motivations.
The chart above compares the adoption curve for the smart speaker in comparison with the smartphone. It took six years for the smart speaker to reach 35% adoption4 compared to just four years for the smartphone. But the giant leap for smartphones occurred in year six (2013) when it surpassed 50% adoption. Since the pace of adoption has slowed considerably for smart speakers, it’s difficult to guess when the devices will achieve adoption by half the households in America.
While this slow growth is of concern, Kinsella knows that the magic of smart speakers is only partly the device.
Smart speakers (i.e. Voice) technology is now available in many devices in the home. Voice assistants are now embedded in media players, smart TVs, and a few other appliances. While the presence of these other voice assistant vessels is not as widespread as some had predicted, it still undercuts the need for a smart speaker in some instances. That may be creating some downward pressure on the broader adoption of smart speakers.
For example, my daughter recently won a Samsung Smart TV with Amazon Fire built into the unit in a trivia contest. With a push of the button on the TV remote, she can ask Alexa to play a radio stream, podcast, give the weather forecast, or countless other requests through the device.
A question for the future of smart speakers will be whether or not the current features are enough to attract new buyers or if new applications can be developed that will capture the interest of consumers.
Kinsella believes that developing and marketing new applications for smart speakers is essential for the wider adoption of the devices.
He notes that of the top 10 most popular smart speaker use cases, nine involve a simple command followed by a task automation or information. Only one might return with a interactive dialogue and that is not always necessary.
Consumer adoption shows that simple requests and simple tasks are the valued and trusted features of smart speakers. The complex tasks and dialogues are the outliers. None have captured user attention sufficiently to achieve high frequency use much less become a viral hit.
As an audio-first medium, I’ve often thought that public radio provides an ideal opportunity to build specific skills to showcase the power of our archives and other types of specific content for our audiences.
For all of the right reasons, most stations have dropped the idea of doing event calendars on their broadcast stream. They may still have them on station websites, but there is an opportunity to offer a brief audio calendar as a smart speaker skill that could be easily produced with a built-in sponsorship opportunity. And to use our promotional heft through our broadcast service to promote something like this to our audience.
The same may be true by creating “playlists” with existing content around verticles such as statehouse coverage, election stories, or climate change. I’m far from the technical wizard on how to do it, but I think it’s an opportunity that public radio could explore and learn from as a way to further engage our audience and, perhaps, attract new listeners as well.
The fifth edition of the U.S. Smart Speaker Consumer Adoption Report includes a wealth of data and analysis related to smart speaker adoption trends, user behaviors, and consumer sentiment. You can find out more here.
THING THREE: Where is the Advertising Spend Happening in Podcasting
Last month in Three Things, I wrote about the significant increase in podcast advertising last year. Tech, media, and finance were the top industries categories investing in podcast advertising, according to data from the advertising intelligence firm MediaRadar.
MediaRadar has just released some further details from last year, focusing on three top podcast genres: comedy, news, and true crime.
Tech companies made up 18% of the total U.S. podcast ad spend last year, with a 50% increase over 2020. The growth was driven by cellular providers, who increased their ad buys by nearly eight times compared to 2020. A large part of this growth in spending was with news podcasts in 2021.
Comedy’s tech drivers included wearable tech, web design and development software, and audio equipment, which was up 37% YoY. In addition, home security systems accounted for 35% of tech ad buys on true crime channels and 9% of tech ad buys on comedy channels.
In its story about the data, Inside Radio noted that news podcasts had a 20% increase in ad revenue last year as the number of brands on those shows grew more than a third to top 1,400. Financial services companies upped their news podcast ad spending by 45% versus 2020. The biggest growth came from credit card companies (212%) led by Bank of America, Capital One and American Express, with banks (18%) and investment firms (17%) also growing their podcast ad budgets.
In terms of advertising load within podcasts, news podcasts have the shortest ads: 47% are 30 second formats. In contrast, 60 second-plus ads account for 57% of ads in both the true crime and comedy genres.
I think this is because most ads with true crime and comedy podcasts are host-read, which tend to be longer reads. However, despite the predominance of host read ads in specific genres, that tactic declined last year from 82% to 66% YoY in the comedy genre and from 73% to 59% in the true crime genre.
If your station is doing host read ads for any of its podcasts, I recommend a quick read on How to Create Compelling Copy for Podcast Advertising published in January on the Market Enginuity blog.
The Media & Entertainment category, while still one of the largest overall advertisers in podcasting, actually dipped slightly from 2020. MediaRadar says that may represent a “leveling out” after the pandemic led to a surge in ad spending in the segment. Even so, it was still the second-largest ad category for News podcasts5.
While comedy and news podcasts tend to attract more men, MediaRadar says that true crime, which leans much more toward female listeners, saw a 15% growth in ad revenue, drawn from more than 1,000 product lines. Psychology and counseling services were the top advertising categories, up 57% versus 2020. One service, BetterHelp, upped its spend by 41%. Home security companies were also significant spenders in this podcast genre.
BetterHelp, the online portal that provides direct-to-consumer access to mental health services, continued its heavy spend in podcast advertising this year. The podcast media planning platform Magellan AI reported that it was the top spender in February with an ad buy of nearly $8 million last month. Insurance companies and job recruiters were also well represented, along with long-time podcast advertiser Squarespace still in the top 10.
These significant investments in podcast advertising don’t seem to be slowing down. The key is building the audience and finding the scale to take advantage of the opportunity for local stations.
“As podcasts’ consumption grows exponentially, brands are optimizing this medium to reach across their listeners,” said MediaRadar cofounder and CEO Todd Krizelman.
“With so many different types of podcasts available to suit your interests, there seems to be a podcast genre for every taste. As such, advertisers are strategically considering where their ad dollars are best spent that translates to a higher engagement rate and loyal audience base, especially within True Crime, News and Comedy podcasts,” said Krizelman. “It’s evident from our findings that these podcasts have seen substantial growth in the past year and continue to see ad spend increasing to cater to their audience.”
That’s Three Things for this week. Don’t forget to sign up for our Conversation about Public Media and “The Great Resignation” on Thursday, March 31, 2022, at 4:00 pm (Eastern). You can register here. Thanks.
“Share of Ear” is a view of how Americans consume audio content. Edison reports a share of audio time spent and a percentage of Americans who use each content source in a day. Each quarter, Edison Research surveys 1000 persons 13+ on audio use. Respondents keep a 24-hour diary to record audio use. Each released study reflects 4,000 respondents, representing a one-year rolling average. This wave is based on persons from Q1 2021, Q2 2021, Q4 2021, and Q4 2021.
From Inside Radio, Daily Listening Trends Show ‘America Is Still In Love With AM/FM Radio,’ March 10, 2022.
The report is the result of a survey conducted in January 2022 with 1144 U.S. adults age 18 or older that were representative of the U.S. Census demographic averages. Because they reached online adults representing a subset of the population, some totals are adjusted downward to provide device and usage numbers relevant to the entire adult population. Other findings are relative to device ownership and do not require adjustment.
It was once popular for voice industry leaders to say that smart speakers represented the fastest adoption in the history of consumer electronic devices. That really was never the case unless you argue that pre-iPhone smartphones actually created the category.
Source: Inside Radio, MediaRadar: Podcast Ad Revenue Grew 20% In 2021. More Ads Were Pre-Recorded Too, March 14, 2022.