Year 2007 was without a doubt a challenging one for radio. First came the Don Imus debacle last April, then a standoff between Arbitron and radio companies over data from its PPM. Radio revenue slipped 6 percent in November, according to new reports, and some economists are predicting that full-year 2008 revenue will dip as well. But 2008 is also a year ripe with possibilities for the medium, especially in an environment where advertisers are increasingly worried about their message getting lost amid ad clutter. Initiatives to cut back clutter have proven effective on stations across the country, and high definition, online and satellite radio are providing new avenues for advertisers. Even a contrite Imus made a comeback, returning to the air via Citadel Broadcasting in December, seven months after being fired by CBS Radio for racist remarks. Media Life talks to Michael Harrison, publisher of Talkers magazine; Matthew D. Warnecke, partner and director of network and local radio and network and local broadcast for MediaCom; and Gerry Boehme, executive vice president of strategic planning and information technology services for Katz Media Group, about the coming year in radio. This is the fifth in a week-long series of 2008 previews with experts in different fields of media.

 
What are three trends to watch for in 2008 in radio?
 
Harrison: It depends on how you define radio. It if it’s AM and FM, you’ll see continued reaction to competition provided by new media like internet and satellite radio. Satellite radio has shaken up the music radio business, as has the iPod revolution, and they’re continuing to get better at programming music because they can’t get away with not doing so.
 
In terms of talk radio, it’s becoming extremely multimedia, and we’ll continue to see that happen. It will become more technologically flexible.
 
Another trend you’ll see is the big consolidation groups deconsolidating. You’ll see more owners and smaller groups divvying up the big pie. You’ll see that happen in 2008.
 
A third trend is the unknown.

When people ask, “‘Where’s radio going?,” the thing you can count on is something you can’t even imagine. Something big will happen that we don't have a clue about yet.

Warnecke: The things I'll be watching are: What happens with the personal people meter and in spending, will Olympics and politicals save 2008?

The third is a hope for '08, that local radio streaming becomes easier to purchase.

Between A) the unknowns of commercial talent contracts and compensation for online B) agency schedule maintenance systems and the issue of how to set up online call letters and C) connecting those stations to Arbitron data, local radio buyers get daily pressure to participate in the online revolution while facing roadblocks making that online participation almost impracticable.

What will be the single biggest change facing the industry over the next few years?

Warnecke: The same changes that face all media: how to integrate emerging opportunities and content delivery for advertisers while growing revenues.

Boehme: The single biggest change will be just that: dealing with change itself.

As a long-established medium, radio shares the same challenges as other media. Business practices are shifting as advertisers demand higher accountability, more information and better measurement. Audiences are fractionalizing as more media choices become available. New devices are competing with broadcast and print for time and attention among consumers.

What was the biggest story in radio in 2007?
 
Harrison: There were three. One was the beginning of deconsolidation, which will continue. Two, the Imus affair, which was certainly the biggest story about radio. And the third is the technological revolution that is gripping all media.

Warnecke: They weren't pretty stories: Arbitron and the PPM delay and another lackluster growth year.

Boehme: Radio maintained and even increased its relevance with multi-platform delivery, better use of interactive channels and communications, electronic ratings, creative sales packages and more research on how and why radio works for advertisers.

What is the single most important thing for media buyers and planners to know about radio in 2008?

Harrison: I think that media buyers need to understand the qualitative nature of the radio audience and not be so dependent on the cost-per-point system.

CPP is extremely misleading because you can think you’re getting tremendous exposure but you might not be getting tremendous results.

Buyers need to understand the specific nature of certain formats and their audiences. They can get more bang for their buck by going after devoted active communities as opposed to going after large demographic stats. This is very important.
 
Warnecke: Radio delivers actively-engaged audiences who remain listeners even when commercials air. Radio doesn't need “live plus.” Television would love a 90 percent-plus audience retention for its commercial breaks.

Boehme: Contrary to some perceptions, radio's influence is growing, not declining. Radio is a reach as well as a frequency medium. No medium targets its audience better, or is as trusted by its core audience.

When do you think satellite radio will start being adopted in greater numbers, and what will this mean for media people?
 
Harrison: I think that it will continue to grow, but I think that its growth will be limited by the bigger growth of internet accessibility in cars. When the internet’s available in cars, satellite radio will be irrelevant. This is crucial information. It’s not outrageous, it’s true.
 
Most of the industry operates in denial, so there is no buzz in the industry as to when it’s coming, I’m just going to step out a limb and say it’s coming sooner than people realize.

Obviously a big issue in radio, especially the last few months, is the adoption of PPMs. People seem to agree that something besides the paper diary is needed, but they're not happy with the execution of the PPM. Is it better to roll out a flawed system, and attempt to fix it along the way, or are media people better off relying on established data that, admittedly, has problems of its own?
 
Harrison: All systems of rating radio listenership are flawed and always will be.

There’s no such thing as a perfect system, unless you survey every person in the country 24 hours a day, which isn’t possible. 
 
The people meter is an advancement over the diary system, but it can never be perfected because of the nature of radio. It’s wireless, complex, and it’s impossible to get the accurate readings that today’s ad community demands. Which is why I advise the community to learn about radio. If you do, you can get a handle on who’s listening.

In the 21st century the nature of the programming will define the audience. There’s no way to accurately rate radio.

Warnecke: A system with industry support and room for enhancement is measurement that I'm happy to encourage. I was reminded recently that we're used to hearing complaints from broadcasters about problems in ratings measurement for television. Those complaints are often posturing for the media marketplace as much as they are legitimate need for improvement.

Boehme: In reality, all survey data is “flawed” and surveys are always in the process of being improved. All surveys are designed to use small samples to represent the habits of the population, since everyone cannot be measured individually. Samples vary, and that influences the numbers from one survey to the next. We also know that methodology itself affects the results.

However, our experience with established surveys allows us to recognize and deal with whatever flaws or bias exists for that methodology. We can use the data to make important decisions while at the same time we can work to improve its performance. That has been radio's history with the diary.
 
You don't hear a lot about Howard Stern these days, two years after he left terrestrial radio. Do you think we'll see a mass exodus to new media platforms of other radio personalities (granted, there aren't that many of his stature)?

Harrison: If AM and FM radio does not pay top dollar to top personalities, and if AM and FM don’t develop new talent, there will be a total mass exodus to new media. As a matter of fact, the new media will grow its own farm system, which it’s already doing, so there really will be no one to exit AM and FM, they’ll come right from new media.

Warnecke: High-profile personalities continue to explore outlets for their content beyond terrestrial radio. The question for advertisers and broadcasters is how to leverage/manage that scale.