BILLBOARD BOWS TO STREAMING, REWEIGHTS CHARTS:  Currently Billboard treats the chart weighting of all “streaming” plays the same, no matter if its subscription-based audio, free ad-supported audio or free ad-supported video.  The problem with this cookie cutter approach is that listeners consume music differently across the tiers which can skew the charts.  The most glaring example of this is how younger listeners rip through just the beginnings of songs on YouTube (which count as a play every time), and/or play the same song over and over.   Because of this behavior YouTube ends up with a disproportionately higher effect on the Billboard charts than it should.  To solve this problem Billboard has announced a change in the chart weighting formula which they’ll begin using in 2018.  The formula changes, which differ on the Billboard 200 and Hot 100 charts, are a little complicated – read the article if you really want to geek out.  Regardless of the math behind the formulas, rest assured that as Billboard throws more weight behind the streamers so too will the artists who’ll look to Pandora, Spotify, Apple, etc. to help break their next hit.

AUTONOMOUS DRIVING’S IMPACT ON AUTO INSURANCE BEGINS:  There’s an uncomfortable truth about the future of the auto insurance industry.  Once autonomous (self-driving) cars become the norm there will be significantly fewer crashes, thereby driving the cost to insure a car way down and shrinking the entire category.  Industry experts estimate the US auto insurance market could decrease by 40% within the next 25 years.  And the first sign of change is already here.  According to the attached Business Insider link, Liberty Mutual is the first insurer to offer a lower cost insurance plan for Tesla owners whose cars are equipped with Autopilot technology.  The program is simply called InsureMyTesla, and it features rates which are 20-30% lower than regular automobile insurance.  Down the road (sorry) you could even see insurers offer single price packages for vehicle insurance and maintenance combined.  Feels like some major disruption is on the way.

A LOOK INTO AUDIO’S CRYSTAL BALL:  Finally today, there’s been so much buzz over the last few months about the impact voice-enabled technology is having on marketing I thought it would be helpful to highlight the attached overview article from GeoMarketing.com.  It’s an interview-style piece with Pandora SVPs Susan Panico and Steven Kritzman covering a wide array of future-of-audio topics.  In it they discuss; 1) how connected home devices are driving a new surge in audio consumption, 2) how Voice is supplanting Touch as the next gen way we’re interacting with the tech around us, 3) how AM/FM’s monopoly of in-car listening is being frayed by new connected car streaming delivery, and 4) how this trend is already aging up into the primary buying demos most brands covet.  If you work in or around the audio space and believe it’s important to “skate to where the puck is going”, this is important stuff to understand.

Have a great Monday guys!

REGULATION IS COMING TO DIGITAL POLITICAL ADS:  For decades traditional media has been under a strict set of regulations which require transparency about who’s paying for candidate and issue based Political advertising.  It’s the reason why all TV and Radio ads have “paid for by friends of Joe Bag-of-Donuts” at the end of each ad.  But up until now there’s been no such requirement for digital ads.  However, thanks to the ongoing scandal involving Russian interference of our last election in which foreign operatives allegedly purchased Facebook, Twitter and Google ads to influence US voters, things are about to change.  As noted in the attached AdWeek Link a bipartisan group of Senators is preparing to introduce new legislation called the Honest Ads Act, which will require “paid for by” disclosures as well as other record keeping requirements for digital ads.  My guess is this will sail through Congress, because it’s hard for any lawmaker to argue against improved transparency in this area.

R.I.P. AUTOPLAY:  For years autoplay video ads have been the advertisers’ best friend and the users’ worst advertising nightmare.  As the name indicates these ads automatically play as you enter a site or click on content, so you can’t avoid them.  This makes for a wildly effective ad unit that’s also annoying as hell.  Recently users have become less tolerant of autoplay’s forced view, which is why video completion rates are down and ad blockers are on the rise.  Publishers are responding to this behavioral shift as noted in the attached Digiday link.  Autoplay video units are being replaced with value exchange-based ads in which the user voluntarily renders an ad in return for some benefit.  You’re also seeing more embedded rollover video ads which are also user spawned.   Overall this is a positive trend for both consumers and brands, since it eliminates the force feeding of annoying ads which end up making the advertiser look like the bad guy.

TECH-WHILE-DRIIVNG IS MORE DEADLY THAN YOU THINK:  For almost 30 years the driving-related fatality rate was steadily decreasing, mostly thanks to safer cars and a crackdown on drunk driving.  But as you can see in the image below, auto-related deaths rose 5% this past year and a compounded 14% over the last two years.  So what’s going on here?  The only real difference in how we drive today vs. just a few years ago is the use of digital technology while driving.  Texting is a huge problem.  And so is the ever-increasing array of in-car tech which takes our eyes from the road and puts them on the screen. What’s particularly alarming is the spike in deaths of motorcyclists, pedestrians, etc..  This indicates that drivers just aren’t paying attention to things around them the way they used to, and it’s a safe bet that smartphones are the reason why.  To make matters worse NHTSA doesn’t even know the true toll tech-distracted driving is having.  Take the tragic story at the beginning of the attached Bloomberg link for example.  The fatal accident described was clearly caused by a driver using their cell phone, yet it was classified as a generic accident.  Examples like this mean the affect connected devices are having on fatal accidents is actually being under reported.  This should be a wake up call for all of us.  It’s time to start taking distracted driving seriously, because its killing more of us than anyone realizes.

Please have a SAFE Friday (and weekend) guys!

THE “VOICE SHELF” COMES TO SEARCH:  In tomorrow’s Voiced-based environment the entire Search industry will be transformed.  Gone are the quaint days of being one of seven listings on the first page of a Google search.  Instead marketers will rely on voice recognition AI to respond to verbal searches we’ll be making.  In order to succeed in this new paradigm brands will need to solve for two things. The first is getting established as Voice Skill on platforms like Google, Amazon, etc..  Think of this as an embedded SDK which generates content called for by the search.  It’s literally the martini recipe Alexa responds with when somebody says “Hey Alexa, how do I make a vodka martini?”  The second must have is a high ranking on something called the Voice Shelf.  This is the order in which a voice-enabled digital assistant pulls content.  Staying with our vodka martini theme for a minute, if both Kettle One and Tito’s have a martini recipe Voice Skill, which one does Alexa respond with?  Since there isn’t any sponsorable content on voice platforms (yet), it’s sort of a Wild West situation of brands testing ways to get their Voice Skills first in line on the Voice Shelf.  Are you confused yet?  To help sort this out take a look at the attached AdAge article.  And is it still too early for a martini?!?

AMAZON PRIME IS A BRILLIANT LOSS LEADER:  For consumers Amazon Prime seems like a pretty straightforward proposition.  Pay $99/yr and get unlimited free shipping of Amazon purchases along with a host of other freebie benefits.  But since most users blow past $99 in shipping costs annually, how does Amazon make this profitable? As it turns out they don’t have to.  According to the attached BGR link, Prime members spend $1,300 in Amazon purchases, which is almost double the $700 non-Prime shoppers spend.  In other words AP is a loss leader which doesn’t need to make money by itself.  Its only purpose is to get users through the front door, because the profit made on $1,300 is the real game.  Someone once told me half-jokingly that sushi was invented by the soy bean farmers as a delivery mechanism for soy sauce.  Think about it – that could actually be true.  Following that analogy, AP is the sushi to all of our soy sauce purchases.

RIDING THE DISCOVERY DINOSAUR:  If I had a nickel for every time someone in Radio bragged that AM/FM is “still #1 in music discovery” I’d be writing this blog from my villa in Tuscany right now.  It’s not really a sellable metric, but Radio keeps beating the discovery drum as anecdotal evidence that they’re still relevant.  But times are changing.  In a new study by the research firm Integr8, in the attached RAIN link and in the graphic below, you can see how broadcast radio’s monopoly on music discovery is slipping with the younger demos.  In fact, Gen Z is just as likely to discover that next new song or artist on a Streamer or YouTube as they are on their local radio stations.  Can you imagine what this stat will look like once today’s teens age up into the primary advertising demos?  Again, this is really only a brag stat since I’ve never once sold the propensity to discover music in my 25 years of media sales.  But once Radio loses the discovery crown we won’t have to hear about this stat every time Nielsen releases a pro-Radio propaganda piece. Tick, tick, tick …

Have a great Thursday guys!

THE FCC CHAIR’S TEPID SUPPORT OF THE 1^ST AMENDMENT:  Remember all the way back to last week when President Trump inferred that NBC stations are risking having their broadcast licenses not renewed due to repeated “Fake News” reporting.  This set off a firestorm of 1^st Amendment defense because it was seen as an assault on freedom of the press.  This put the spotlight squarely on the FCC who’s in charge of broadcast licenses, and it’s Chairman Ajit Pai who was just appointed by Trump and confirmed by the Senate to a new term.  While fellow FCC Commissioners immediately rallied to the 1^st Amendment’s defense, Mr. Pai was silent for a week.  Then yesterday in a speech at George Mason University, Pai stated his support for freedom of the press as an apolitical principle which would not be swayed by political influence.  His comments were covered in the attached Inside Radio link.  The Chairman stopped short of announcing his disagreement with the President (and didn’t even mention Trump by name), but his comments were seen as lukewarm support for one of the most important liberties we enjoy in our country.  It’s a start, I guess.

END OF DAYS FOR AGENCY TRADING DESKS?:  Yesterday on their Q3 Earnings Call Omnicom CEO John Wren announced that its in-house trading desk, known as Accuen, was basically flat on revenue year over year.  More significantly, he also explained that the HC was beginning to transfer Accuen talent from the trading desk to individual client teams, as noted in the attached AdExchanger link.  This is happening because clients are less willing to allow agencies to place their business through non-transparent trading desks, which are basically stand-alone profit centers for the HCs.  And as the market demand shifts agencies must be agile enough to move resources.  Rest assured programmatic is still important to Omnicom and its clients.  But by embedding programmatic specialists in account teams they can still leverage the power of their data platform (known as Annalect), while providing the full transaction transparency their clients are demanding.  You may remember Publicis made a similar move when it disbanded their Vivaki trading desk in 2015 and spread that programmatic talent across the account teams.  It’s a sign of the times about where the industry’s programmatic business is headed.

THE POWER OF THE USP:  Finally today, let’s go all the way back to a lesson you would have learned during a freshman year marketing class about the power of Unique Selling Propositions.  USPs, as they’re known, are the key differentiators which separate a company from its competitors in the minds of its customer.  Inc.com published a fascinating look at how USPs work in the attached link.  Their assertion is that all USPs can be divided into one of three primary categories – Cost Leadership, Innovation, and Customer Intimacy.  Then they explain each through real companies who are leaders in their respective categories.  They referenced Southwest which goes the extra mile to control costs by using identical planes across their entire company.  And Google, who’s completely committed to bringing life changing innovation to market regardless of cost.  And Ritz Carlton Hotels, who knows enough about a given customer’s preferences to leave dark chocolate instead of milk chocolate on their pillow at night.  All of these are impressive examples of harnessing the power of a well-defined USP to create a competitive advantage and beat out the other guys.

Have a great Wednesday guys!

RADIO HANGING ON IN-CAR FOR DEAR LIFE:  Last week Edison Research rolled out a new batch of audio data in its Definitive Guide To Audio Report, as highlighted in the attached RAIN link.  The findings are in line with most other audio research from the past few years around the general migration of music listening from AM/FM and Downloads to Streaming.  However, there was one interesting new data cut around in-car listening that’s worth noting.  To set this stat up consider the fact that in-car has long been considered the last bastion of broadcast radio’s monopoly over audio consumption.  The reasoning is simple – it takes OEMs longer to install apps and wifi connectivity in new car models, so AM/FM Radio’s position in your car’s center stack has remained stable.  But things are starting to change.  As you can see in the graphic below, the newer the car is the more likely streaming audio listening will replace AM/FM.  It’s inevitable that this trend will continue until Radio is just one of many ways to deliver music in-car.  And when that happens the broadcasters’ last stronghold will crumble.

APPLE’S COOKIE BLOCKING – ONE MONTH IN:  You may recall last month Apple implemented a block on its Safari browser to only allow cookie tracking over a 24 hour window.  This means publishers and networks who rely in cookie data to behaviorally retarget ads got a severe haircut on the amount of targeted inventory they have to sell because any data more than a day old is now lost.  Now that we’re a month in to this change publishers are starting to see to the inventory, pricing and yield impact, as noted in the attached Digiday link.  Not surprisingly, yield from ads run through Safari is down – about 10% by most estimates.  This is due to the fact that networks have lost the ability to layer on behavioral data at a premium, which relegates more impressions on Safari to cheaper non-targeted ads.  Fortunately for publishers Safari is a relatively small player in the browser space.  The “sum of all fears” scenario for publishers and networks would be if one of the big boys, like Google Chrome for example, instituted the same behavioral blocks as Apple.  More to come on this, I’m sure.

GLOBAL AD REV SURGES THANKS TO MOBILE:  Yesterday there were a pair of long-term ad revenue forecasts released.  The first was from eMarketer who charted out global ad revenue growth over the next several years.  The numbers are strong – with an estimated 7% CAGR worldwide, and about 5% in North America, from now through 2022.  (The NA growth is slower because it’s a more mature digital market.)  In the second forecast Zenith calls for Mobile usage and ad revenue to continue its rampage.  According to Zenith, by 2019 Mobile will account for 76% of time spent online, and 62% of all the digital ad revenue.  As noted in the attached Inside Radio link, if you put these two data sets together you can see a clear picture of Mobile as the growth engine for global ad revenue over the next several years.  And to think just five years ago we were all patiently waiting for the “Year of Mobile” to happen.  Now it’s Mobile’s world, and we’re just living in it!

Have a great Tuesday guys!

MO’ MONEY, MO’ PROBLEMS FOR SPOTIFY:  Since Spotify isn’t a public company there’s no way to get fully transparent look at their books.  But there are some estimated financials from the first half of 2017 floating around the industry right now, as reported in the attached Inside Radio link.  The headline is that Spotify took in an estimated $2.25B during 1H’17, which is a 70% increase over 2016.  The other screamer stat is that operating losses from the first half of the year are estimated at around $200M, with a staggering 85% of Spotify’s business expenses going to pay for music royalties.  So what does this all mean?  Spotify continues to pursue a go for broke strategy of driving as many new subscribers and top line revenue as possible regardless of the bottom line, in hopes of going public at a valuation that reflects its high growth.  But as the article points out, the clock is ticking.  Over the last three years Spotify has lost roughly $1B, and has no reasonable way to raise new capital.  (Keep in mind their plan to Direct List on the NYSE won’t generate any new money for them.)  So Spotify’s entire plan hinges on being able to control royalty costs by pushing even more of their “freemium” listeners into subscriptions before they run out of cash.  So basically Spootfy’s revenue growth is the worst good news you can have in business.

THE POWER OF “GAFA” IN ITS PRIME:  Over the weekend I came across an interesting read in the attached blog post from Benedict Evans, who’s a Silicon Valley VC.  Mr. Evans ran a fascinating analysis on the power currently yielded by GAFA (Google/Apple/Facebook/Amazon) through their annual revenue, employee count, etc..  Then he compares their rev to the tech titans from one generation ago, which he refers to as Wintel (Microsoft – aka Windows, and Intel).  The difference in scale illustrated in the graph below is astounding.  If you compare each group in their “period of dominance” GAFA has 10x more revenue compared to the rest of the tech industry while Wintel had a 3x lead during it’s heyday.  Mr. Evans’ theory for this change has to do with diversification.  Today’s digital powerhouses are so much more than a software suite or a microprocessor chip company.  They’re consumer electronic devices, data storage farms, media sales, retail sales, content subscriptions, etc, etc..  This change is a direct reflection of how many more ways tech is integrated in our lives today than it was just 15-20 years ago.  Makes you wonder what the next generation of tech dominance could look like.

TAKE IT FROM LeBRON, CHEAP IS A GOOD THING:  LeBron James is a billionaire and one of the most powerful celebrities on planet earth.  So you’d naturally assume he pays for whatever he wants when he wants it.  But it turns out LeBron is a little more frugal than that.  In the attached NBA.com link, King James is outed by teammate and buddy Dwayne Wade for being super stingy with his money.  And sure enough it’s true.  Straight from LeBron’s mouth . . . “”No. I’m not doing that. I’m not turning on data roaming. I’m not buying no apps. I still got Pandora with commercials.”  While this is amusing to hear from a worldwide celebrity, there’s a nuanced point to his comment account Pandora.  While the music streamer does play commercials on the free tier of service, the number of ads played and the way they’re served is so nominal that it doesn’t negatively affect the listening experience.  Of course LeBron James could pony up $5 or $10 a month for one of Pandora’s ad free tiers, but in his eyes that’s wasted money because the service is just fine the way it is.  And if it’s good for a guy whose net worth is more iHeart Media and Cumulus Broadcasting combined, then it’s good for the rest of us too!

Have a great Monday guys!

PAID TV HAD A BAD DAY:  After the market closed on Wednesday AT&T (and its subsidiary Direct TV) announced that it had lost 390,000 paid subscribers in Q3 alone.  This spooked investors and caused a sector-wide selloff on Thursday – image below.  So what’s going on here?  According to the attached Bloomberg article, Wall Street is waking up to the realization that traditional paid TV services like Cable and Satellite are on an inescapable decline thanks to new OTT and video streaming competitors.  Because they have more choices, consumers are getting smarter about what the choose to purchase and watch.  The days are numbered for the bloated cable “bundle” where you pay some exorbitant fee for 200 channels when you only watch 10-15 of them.  The trend is towards a la carting, where consumers piece together a couple of internet-based video services they really want, and end up paying much less overall to watch TV.  I predict Wednesday’s announcement by AT&T is only the beginning of a downward spiral for Big Cable.

SHHHH . . . GOOGLE CAN HEAR YOU:  Earlier this week a tech blogger discovered something very creepy about Google’s new Google Home Mini speaker – it was secretly recording and saving audio clips of what it heard, even when the device was in dormant standby mode.  The details are in the attached Money.com link.  Apparently, connected home speakers with voice activation temporarily save audio clips as a way to “learn” your voice commands.  But that usually just happens when you activate the device by saying “Hey Google . . . “.  The revelation that Google’s Mini speakers were recording 24/7 takes this to a whole new level of privacy invasion.  Google quickly swept this under the rug as a coding bug and pushed out a software update to stop the continuous recording.  But you have to wonder how long this would have continued if someone hadn’t noticed.  And then you start thinking about what other connected devices around you are listening too.  Eeek!

FROM RUSSIA WITH LOVE:  Things are about to get very interesting around the issue of Russian operatives buying Facebook ads to influence last year’s Presidential election.  Yesterday in an interview with Axios Facebook’s Sheryl Sandberg said the company had provided the House Intelligence Committee with all the examples it had of ads purchased by Russian buyers.  Then she doubled down by saying FB would provide the targeting used for all of the ads once the Committee releases the information to the public (which is expected to happen today).  This will give us a really clear picture of which ads were targeted to whom and probably indicate what Russia was trying to accomplish.  It’s important to note that these ads were purchased through FB’s self-service API, and the company wasn’t even aware of what occurred until last month.  There’s also evidence that the same activities were occurring on Twitter and Google, so I’d expect both companies to follow FB’s lead by offering up all the information they have.  Mashable has a good article on yesterday’s Sandberg interview in the attached link.  Buckle your seatbelts for this one.

Have a great Friday (and weekend) guys!

ONE CHALLENGE, TWO VERY DIFFERENT REACTIONS:  There’s little doubt that Amazon is having an effect on the entire Retail landscape. This year alone 19 retailers have declared bankruptcy and over 6,000 B&M locations have closed.  Not all of this is due to Jeff Bezos & Crew, but you know they’re a big part of the disruption.  When facing this challenge you’d assume the two biggest Mass Merch retailers, Walmart and Target, would have a similar reaction.  But that’s not the case.  In a fascinating pair of Fortune articles both retailers lay out completely opposite strategies.  Target’s position was articulated on Tuesday by its CFO Cathy Smith in the attached link.  The key takeaway . . . “We are going to win when we’re the best Target, and not trying to be a competitor against Amazon or anyone else.”  So basically Target is going to ignore Amazon and just keep running its own play.  By contrast take a look at this Fortune article, which appeared just one day later.  It showcases Walmart’s effort to go all in on an eCommerce strategy to compete with Amazon.  Over the last 12 months they’ve successfully acquired and accelerated online sales at Jet, Bonobos, Moosejaw, etc..  They’ve also charted a course to integrate the best of their on/off-line assets as described by Walmart CEO Doug McMillan when he said . . . “We’re combining the accessibility of our stores with eCommerce to provide new and exciting ways for customers to shop.”  Seems like Target and Walmart are taking the exact opposite worldview on eCommerce, doesn’t it?

IS CLOTHING ON YOUR SHOPPING LIST?:  So with all the challenges in Retail these days, what’s going right?  One of the bright spots is Hispanic gifting purchases, especially for clothing items, as noted in the attached MediaPost link and image below.  It turns out that US Hispanics are much more likely to give the gift of clothing then the average consumer.  This has to do with cultural identity and the demographic composition of Hispanic households.  Hispanic women use clothing as a cultural touch point, so it’s usually higher up on the holiday shopping list.  And 57% of Hispanic families have children under 18 in the household (which is about 10 points than other ethnicities), so the chances of parents/grandparents buying clothing for their children are much higher.  These are terrific insights for retailers who are looking for pockets of marketing opportunities in the upcoming holiday season.

A REALITY CHECK FOR THE 1^ST AMMENDMENT:  In this blog I really try to stay away for political issues, but yesterday’s Twitter post by President Trump can’t be ignored.  For some background, Trump was upset about news reports from NBC which said he was demanding a significant buildup of the US’s nuclear arsenal.  As a pushback he went to his usual #fakenews narrative, but then took it one step further by suggesting that NBC should have its broadcasting license revoked.  The idea that a news outlet’s license should be shut down just because it ran negative stories about the Executive branch of our government is pretty disturbing.  It directly goes against the 1^st Amendment of the Constitution which preserves freedom of the press.  Beyond the shock value of this suggestion, there’s a mechanical and legal issue to consider.  The licenses are held by the FCC, so they would be the ultimate arbiters of NBC’s fate.  Technically the NBC Network itself isn’t a licensed entity, so there’s nothing to revoke.  But NBC’s affiliate stations do have licenses, and must reapply every five years.  Could you imagine a scenario where these TV stations are denied license renewals based on their political coverage?  If you want more details on this story the  attached link from Money.com has some fairly balanced coverage.  In the meantime I’m just hoping President Trump doesn’t try to shut down the Daily Gabe too!

Have a great Thursday guys!

BRAND SUPPORTED VOICE SKILLS ARE ABOUT TO BECOME A BIG DEAL:  Do you think Voice is becoming important for marketers?  While you’re considering the answer to that question read the attached AdWeek link.  In it the author states that . . . “Voice is having its moment. People are talking, devices are listening and brands are attempting to insert themselves into the conversation, using Amazon Alexa voice skills and Google Home apps.”  This is occurring thanks to the perfect convergence of three factors; 1) consumer behavior is shifting from visual-based touch input to verbal-based voice activation, 2) AI is getting smart enough so that Chatbots can carry on meaningful conversations with humans, and 3) brands are beginning to create voice-based content (aka Voice Skills) to be relevant on this new technological platform.  And the best part is we’re just getting started.  I wouldn’t even say we’re in the top of first inning yet – it’s more like the team is getting on the bus headed over to Voice Ballpark to play this new game!

THIRD DOWN AND LONG FOR THE NFL ON AMAZON:  Earlier this year Amazon made news by stealing the live streaming rights of the NFL’s Thursday Night Football from Twitter.  Over the first half dozen games the top line audience stats have seemed promising, with an average of 1.9M views per week.  But as The Drum reports in the attached link, these numbers might not be as good as they look.  The basic problem is that a digital “view” can be any visit, however brief, by a single site visitor.  Comparing that stat to traditional TV ratings, which calculate the average number of viewers at any one time, is an apples to oranges situation.  According to multiple sources, Amazon’s actual in-game audience is around 372,000 viewers who watch for an average of 55 minutes.  That wouldn’t be a bad number for a local radio morning show, but we’re talking the NFL here.  By comparison, those same games were watched by an average of 14.2M viewers on traditional TV.  Amazon’s smaller than expected audience could have to do with a lack of exclusivity – why go through Amazon to watch the game live when it’s on the NFL Network and local TV affiliates?  The other theory is that viewers just aren’t used to streaming live sports yet, so there’s an adoption curve to get over.  Regardless of the cause Amazon has a long way to go to move the chains on their NFL investment.

THE RACE TO BANKRUPTCY:  Finally today, I’d like to spend a few minutes on Radio’s other big financial problem.  We all know about iHeart with its staggering $22B in debt and constant rumors of bankruptcy.  But what about the second biggest broadcaster Cumulus?  Their debt is $2.4B, which seems relatively mild.  But then consider the fact that Cumulus’s stock is trading at just 34 cents, and it’s market cap is $9.9M (yes that’s an M for millions, not a B).  Put those numbers together and you have a company worth less than $10M which has $2.6B in debt.  (Reread that last sentence.)  The Wall Street optics are so bad that NASDAQ has begun the process of delisting Cumulus from the exchange for failing to hit a $1 stock price over the past 30 days.  And keep in mind, we’re not even talking about the NYSE here.  When NASDAQ delists your company you know you have a problem!  All kidding aside, Cumulus does have some decent stations which are obviously worth more than $10M.  But the overwhelming consensus from investors is that Cumulus is about to go bankrupt, which is why their paper is trading for pennies.  With iHeart and Cumulus as your “top” two broadcasters, is there any wonder why Radio is in so much trouble?

Have a great Wednesday guys!

ADWEEK’S TOP DIGITAL STATS:  AdWeek is out with another installment of its Top Digital Stats from the past week in the attached link.  After two straight weeks of Digital Media conclaves (first Advertising Week and then the ANA Conference), there’s plenty of meat on this bone.  If you’re into Russian hackers buying Facebook ads to influence our Presidential Election #1 is for you.  Or maybe Snap, Inc.’s downgraded earnings is more your thing in #4.  For me the most interesting blurb is #3 – about some brands demanding higher Viewability standards than even the MRC’s.  It’s hard enough for publishers, agencies and ratings councils to get agreement on a consistent set of Viewability standards, and now every brand wants their own set of minimums?!?  AdWeek did it’s homework on this list – totally worth the read.

DIGITAL NOW HALF OF TIME SPENT ON MEDIA:  The tipping point day has finally come when Digital comprises half the time Americans spend with media.  According to the latest eMarketer stats in the attached Inside Radio link, we’re spending 12 hours per day consuming media.  Of that number 5:53 is digital, and within that stat 3:17 is mobile.  In the image below you’ll see Radio’s slice at 1:26 per day – this doesn’t include streaming which is classified under Digital.  Interestingly, eMarketer has Digital Audio at 51 minutes per day (within the Digital #).  So compared to AM/FM Radio’s 1:26 per day, the listening split is now 62% terrestrial and 38% streaming.  That percentage is way higher than any number Nielsen has ever reported – they usually have streaming in the 20-25% range of total audio consumption.  Lots of numbers to sort through here, but it’s a safe to say we’ve now crossed the threshold into a digital first media world.

“COLLABORATIVE EFFICIENCY” IS KILLING WFH:  Over the last several years there’s been a subtle shift away from letting employees work from home in an officeless utopia back towards a more centralized office structure.  Why is this happening?  Back in the 70s and 80s “telecommuting” started to become popular as an employee perk and as a flat out cost saver – since employers could save on office space needed to run the company.  This trend peaked about 5-6 years ago.  But as reported in the attached article from The Atlantic, WFHing is starting to become less popular.  The reason for this is something called Collaborative Efficiency, which is defined as “the speed in which a small group solves a problem”.  The further away coworkers are from one another the longer communication takes.  The most extreme example noted in the article is the Boeing 727 flight simulator situation, where a group of three pilots in a tightly packed cockpit can almost work without talking to solve something like a fuel leak.  Could you imagine copilots having to email each other in real time to fix that kind of problem?  Granted, most work situations aren’t as urgent as an in-flight emergency, but it’s easy to understand how face-to-face is a better way to communicate than a phone call, and a phone call is easier than email.  And as work functions become increasingly more complex and communication-intensive, maybe the in-your-jammies WFH model isn’t the best way to get business done after all.

Have a great Tuesday guys!