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Radio In The New Media Landscape

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1 Radio In The New Media Landscape

2 New Media Choices Are Very Topical Right Now But Their Reach Is Dwarfed By Radio’s Reach
Terrestrial radio accounts for about 41% of unique visitors Television: Nielsen Annual universe estimates 2007/08 Total viewers Radio: Arbitron National Regional Database, Spring 2007; Total U.S. M-Su 24 Hour; Persons 12+ Cume Persons; Satellite Radio: Sirius AND XM Q3 2007, Total Subscribers Online: Media Audit September 2007; total U.S. persons online Internet Radio, MP3 Players: Arbitron and Edison Media Research, The Infinite Dial 2007: Radio’s Digital Platforms P12+ Podcasts: Bridge Ratings August 2007, P 13+ Video On Demand: Arbitron and Edison Media Research, Internet and Multimedia 2006, P12+ Newspapers: Veronis Suhler Stevenson Communications Industry Forecast Average daily circulation TV, Radio, Newspaper, Podcasts and Internet Radio are weekly reach

3 In Spite of Increased Media Choices, Radio Reaches Over 90% of The Population Each Week
Only a 2% decrease in reach over the past three years Only a 5% decrease in reach over the past seven years : Arbitron National Regional Databasae, Total U.S. M-SU 24 hour Persons 12+ cume rating : RAB Marketing Guide & Fact Book citing Arbitron Radar ratings

4 Consumers Continue To Spend A Lot of Time With Radio
Radio ranks 2nd for time spent with media U.S. Census Bureau, Statistical Abstract of the United States: 2007 Adults 18+ for television, daily newspapers, books, magazines, home video, and interactive TV Persons 12+ for radio, recorded music, cinema, video games, and Internet

5 Recent Studies Show That Radio Remains A Very Relevant Medium
An Arbitron/Edison Media Research study conducted in January 2007 reported that 79% of Americans expect to listen to AM/FM radio as much in the future as they do now despite advances in technology 77% of online radio listeners, 79% of audio podcast listeners, and 70% of satellite radio subscribers expect to maintain their current AM/FM radio listening in the future People who listen to digital radio platforms (online, satellite, or audio podcast) do not spend less time listening to AM/FM radio. Digital listeners have an AM/FM TSL of 2:45 per day compared to all listeners’ AM/FM TSL of 2:37. An American Media Services survey conducted in September 2007 reported that 74% of respondents are listening to radio the same or more than they were five years ago 74% usually turn on the radio when they get in the car 63% listen to the radio at least once a day An American Media Services survey conducted in April 2006 reported that 91% of respondents believe that radio is an important part of American life 78% said that radio is important in their everyday lives 74% reported that they listen to radio at least once a day 78% said that they usually turn on a local radio station when they get in their car 37% of those who have a favorite media personality in their market said that personality worked on the radio compared to 32% for TV SOURCE:

6 Rock Radio Listeners, Typically Quick To Adopt New Technology, Haven’t Given Up Traditional Mediums
The most important new feature that rock listeners want in their next personal mp3 player is an FM tuner Two of the top four options for “the one thing” rock listeners couldn’t live without were traditional mediums: TV and FM radio Satellite radio growth has stalled among rock listeners with subscribership unchanged from 2006 to Potential interest among non-subscribers has also declined since last year Jacobs Media Tech Survey III February/March 2007

7 Traditional Radio Remains Relevant Among Kids
“Most of the people I know who own iPods are under 25, and they still listen to the radio. Why? Because that’s still a place where people go to hear their favorite music, and it’s still a place to go to hear about fun shows and contests and promotion. The iPod is a nice gadget, but where are you going to go when you want to win tickets to see Usher? You’re going to go to Channel 93.3, because your best friend said they were giving away Usher tickets on A.J.’s Playhouse.” Adam Jacobson, radio editor for Radio & Records “Don’t forget, teenagers are really looking for a sense of community, and that’s one thing that local Radio stations can really provide.” “Radio is, believe it or not, one of the top ways to reach teens that we’ve found in our research. We asked teens: “How would you recommend that companies advertise to reach people your age?” Radio was the number two answer on our list, just behind television.” Michael Wood, VP of Teenage Research Unlimited “Children and teens are spending an increasing amount of time using “new media” like computers, the Internet and video games, without cutting back on the time they spend with “old media like TV, print and music… Instead, because of the amount of time they spend using more than one medium at a time, they’re managing to pack increasing amounts of media content into the same amount of time each day.” “Generation M: Media in the Lives of 8-18 Year-olds” , Kaiser Family Foundation, March 2005 Karla Peterson and Mark Sauer, “Radio Singing A New Tune, The San diego Union-Tribune, April 13, 2005 RAB White Paper: Teen Market 2002

8 “Old” Media Still Have The Highest Usage Among Kids
“Young people’s use of “new” media such as computers and video games does not seem to displace their use of “old” media such as television and music. “Indeed, it seems instead that media use begets media use: those young people who spend the most time using computers or playing video games also spend more time watching TV and listening to music.” “Today’s youth are masters of multitasking. About a quarter of the time young people are using one medium, they’re doing something else media-related at the same time.” “Generation M: Media in the Lives of 8-18 Year-olds” , Kaiser Family Foundation, March 2005

9 Why Is Radio A Good Choice In This New Media Landscape?
Targetability Radio is a highly targeted medium with a variety of special formats that uniquely target an advertiser’s potential customers. Programming and personalities attract large audiences within specific demographic groups that stay tuned in for long periods of time. Immediacy Radio is the shopper’s companion, reaching consumers near the point of purchase. Consumers typically spend more time with Radio than with any other medium during prime shopping hours. In any 24 hour period, 63% of adults ages 25 to 54 are exposed to Radio within one hour of making their largest purchase of the day. (RAB Marketing Guide & Fact Book, ). Emotional Appeal Radio is an imagination medium, using the mind of the listener to create unique, evocative and effective images on a very personal level. Everyone has a favorite radio station which provides advertisers a unique opportunity to connect with consumers in a personal and generally private activity which results in a high degree of listener receptivity. Advertisers can create a one-to-one relationship with listeners which is so critical for breaking through the media clutter. “Radio advertising can spring forth a world of visions in the mind and connect your product to the consumer with that personal touch”. “The Power of Radio”, Kim Vasey, Senior VP/Director of Radio at Mediaedge:cia Mediaweek, August 23, 2004

10 The Radio Ad Effectiveness Lab (RAEL) Study, Personal Relevance, Personal Connections, How Radio Ads Affect Consumers, Highlights Radio’s Unique Emotional Appeal The research firm WirthlinWorldwide conducted a study on behalf of RAEL in 2004 to better understand how consumer perceptions of radio advertising might differ from those of TV and newspaper ads. The study had two phases, a qualitative phase to understand the values and benefits lexicon used by consumers in discussing media advertising, and a quantitative survey to better quantify the architecture of consumer relationships to advertising. Phase One was conducted using focus group interviews with adults aged while Phase Two utilized a random sample survey methodology resulting in a completed sample of 662 adults. The study’s results, as summarized by RAEL, are below. Radio listening is a one-on-one and emotions-driven experience, and listeners believe that both the medium and its advertising are more relevant to them (compared to television and newspapers) Consumers see television and newspapers as being designed to satisfy the masses, but radio is where they turn to get gratification of their personal wants and needs. Consumers believe that their radio programs carry ads which are appropriate for them as individuals, and listeners are therefore more ready to react at an emotional level – if the advertisement is well suited for that program’s context. The ability of radio advertising to make personal, emotions-driven connections with listeners helps explain why radio can be so effective when the advertising is done well and placed appropriately. The Radio Advertising Effectiveness Laboratory (RAEL) was created in 2001 by advertisers, agencies and radio companies as an independent organization to research the effectiveness of Radio advertising in the U.S.

11 Consequence/ Benefit of Ads
In The RAEL Personal Relevance Study, The Following Statements Were Shown To Be More Closely Associated With Radio Than With Television Radio is associated more with… Mean (rated on scale of 1 to 7) Ads make me feel more connected to my community 5.2 Advertisements in this medium are more honest 4.8 The advertisements are concise 4.6 I feel like the ads are directed more toward me personally 4.4 Advertisements in this medium are reliable 4.3 I am more likely to trust the advertising in this medium 4.2 I get more exposure to advertisements for local products and services 5.3 I can do other things while absorbing the advertising in this medium 5.1 I am more likely to trust the advertising Provides me with last minute info about products/services before I shop More likely to get a good deal on the products/services that I purchase 4.1 I’m less likely to waste money buying products/services that I don’t want Advertisers who use this medium care more about reaching me personally 4.7 Ads Consequence/ Benefit of Ads Advertisers The Radio Ad Effectiveness Lab (RAEL) 2004 Study, 2Personal Relevance, Personal Connections, How Radio Ads Affect Consumers

12 Consequence/ Benefit of Ads
In The RAEL Personal Relevance Study, The Following Statements Were Shown To Be More Closely Associated With Radio Than With Newspapers Radio is associated more with… Mean (rated on scale of 1 to 7) Advertisements are fun 5.6 Advertisements are creative 5.3 The advertising in this medium is more interesting and engaging 5.1 Advertisements in this medium are intrusive I feel like the ads are directed more toward me personally 4.9 Ads do a better job of reaching the people they are meant for I can do other things while absorbing the advertising in this medium 5.7 The advertisements are more likely to hold my attention 4.6 Remember ad longer because ads in this medium have more impact on me These advertisements are more likely to open my mind to new ideas 4.2 Advertisers who use this medium are trying harder to reach me 5.0 Advertisers who use this medium care more about reaching me personally 4.4 Ads Consequence/ Benefit of Ads Advertisers The Radio Ad Effectiveness Lab (RAEL) 2004 Study, 2Personal Relevance, Personal Connections, How Radio Ads Affect Consumers

13 Adding Radio To The Media Mix Benefits Advertisers Due To The Synergy Effect
The recent RAEL study, The Benefits of Synergy: Moving Money Into Radio revealed the following: Substituting two Radio ads for one of two TV ads increased unaided brand recall by 34% Substituting two Radio ads for one of two newspaper ads almost tripled unaided brand recall Substituting one of two television or newspaper ads with two Radio ads resulted in more people choosing the advertised brand as their first choice product, and consumer playaback of main message was as good if not better than stand alone television or newspaper RAEL STUDY, THE BENEFITS OF SYNERGY: MOVING MONEY INTO RADIO, 2005

14 RAEL’s Key Implications For Advertisers Include:
Integrating Radio increases consumer impact without increasing costs against effectiveness measures including brand recall, message playback, and persuasion Redeploying a portion of the budget into Radio appears to make marketing sense A synergy mix with Radio was shown to work across five product categories providing validation for increased usage within current/pending campaigns. Radio effectively communicates a message that can be received, remembered and played back by consumers. Radio is known to be powerful in isolation but is also significantly potent in media mix settings. Research demonstrates Radio’s ability to extend reach, and is an important way to communicate with consumers already reached by television and newspapers. Radio is more than a “supplement”. It’s not about spending more. It’s about more wisely investing what you have. Click here to read the full study: RAEL STUDY, THE BENEFITS OF SYNERGY: MOVING MONEY INTO RADIO, 2005

15 Radio Can Boost An Advertiser’s ROI
In June 2005, The Radio Ad Effectiveness lab (RAEL) released its third and largest “real world” study, “Radio’s Return On Investment Compared To Television”. The study, conducted by Millward Brown and Information Resources, Inc. (IRI), examined four pairs of radio and television campaigns in a range of product categories over a six month period. Scanner sales data from product categories included Grocery Food, Grocery Non-Food, and two Over-The-Counter Drug products. The study’s key finding: Incremental radio campaigns showed significantly better ROI for the advertisers than did their national television campaigns. RAEL STUDY, RADIO’S RETURN ON INVESTMENT COMPARED TO TELEVISION, JUNE 2005

16 Specifically, Incremental Radio Delivered 49% Better Return On Investment Than The Corresponding National Television Campaigns All radio ads were :30s Radio ads were not pre-tested as were the television ads. We would expect that better radio creative with pre-tested ads would result in an even higher radio ROI. Radio Overall: Radio in the presence of TV and in the absence of TV TV Overall: Television in the presence of Radio and in the absence of Radio TV Historical Average: Historical estimates of TV ROI from the participating advertisers RAEL STUDY, RADIO’S RETURN ON INVESTMENT COMPARED TO TELEVISION, JUNE 2005

17 RAEL’s Implications For Advertisers Follow:
Radio moves product. Across four different advertisers, incremental radio advertising consistently and significantly increased product sales and delivered meaningful profit for each dollar of advertising. Radio demonstrated in this study that it can function as a primary medium for advertising. Radio ads increase sales even when national television is present. Radio was just as potent in the presence of Target Rating Points (TRPs) of national TV as it was by itself. In fact, the test results actually suggested slightly more impact for radio when combined with television than when used alone. Radio’s effects can be measured – when radio is used at sufficient weight. Radio is prepared to be held accountable for its advertising effectiveness. But effectiveness measurement requires that advertising be present at sufficient weight for statistics to accurately capture that result. Most importantly: Radio’s ability to deliver strong Return on Investment for advertisers has been proven in a real-world test at last. In this study, radio’s ROI was 49% better than television’s, and radio advertising’s value is no longer just speculation. Click here to read the full study: RAEL STUDY, RADIO’S RETURN ON INVESTMENT COMPARED TO TELEVISION, JUNE 2005

18 Radio Continues To Reinvent Itself Proving Once Again That There’s Nothing “Old” About Radio
“Having existed for more than 80 years, radio has met the challenge of new forms of audio delivery on numerous occasions and managed to remain a very competitive and profitable form of media.” Harris Nesbitt analyst Lee Westerfield, October 8, 2004 High Definition (HD) radio allows broadcasters compete on the digital playing field of the 21st century. Podcasting provides an on-demand product for radio. Internet streaming of terrestrial broadcasts keeps radio top-of-mind when listeners are on-line. Innovative online programs such as Clear Channel’s “Stripped” online concert series by major artists such as Rob Thomas and Jesse McCartney provide unique and original content on its radio station websites. Clear Channel’s “Less Is More” initiative is improving the radio environment for both listeners and advertisers by reducing the clutter on all CC radio stations, and by improving the quality of commercials through Clear Channel’s newly created Creative Services Group. Electronic audience measurement promises to provide more accurate audience measurement, showing radio as the reach vehicle that it is. It is designed to measure the emerging digital broadcasts, whether carried over the air, by cable, by satellite or on the internet.

19 What Exactly Is HD Radio?
HD Radio provides digital broadcasts with AM stations sounding as full-bodied as FM stations, and FM stations sounding like compact discs without static, hiss or signal fades. HD Radio has been called “one of the most significant advances in over-the-air AM and FM broadcasts since the introduction of FM stereo”. The majority of people select a radio station for its music selection, and research suggests that lower radio usage is due to listeners’ desire to hear more musical diversity. Once radio stations cease to broadcast in analog, it will be possible to have two to three additional radio stations per frequency, enabling the broadcaster to create niche formats for its stations. For example, a news/talk station could have a signal broadcasting business news while a third signal broadcasts technology news. A Classic rock station could have a second signal broadcasting entire albums from ’70s rock artists while a third signal broadcasts cutting edge adult alternative artists. This will allow terrestrial radio to increase its program offerings and eliminate the advantage that satellite radio has with its niche formats. BRIDGE RATINGS INDUSTRY ESSAY: iPOD RESEARCH – FIRST LOOK JANUARY 2005 RADIO & TELEVISION NEWS DIRECTORS ASSOCIATION & FOUNDATION, “THE AMERICAN RADIO NEWS AUDIENCE SURVEY, RADIO IN TODAY’S NEWS MEDIA MIX”, iBIQUITY website,

20 Data delivery services including scrolling text with song titles and artist names, plus on-demand traffic updates, weather, sports scores, stock updates, breaking news, etc. Future developments include an interactive component with a “push to buy” button. In the Summer of 2004, Clear Channel Communications began an aggressive rollout of digital broadcasting equipment” to 1000 stations which over a two to four year period is part of an overall effort to upgrade its radio technology, It is projected that by 2008 over 90% of the U.S. population will be reached by an HD station. The HD Alliance, a joint initiative among the major broadcast companies, was announced in December 2005 to accelerate and coordinate the HD rollout, to promote the technology, and to ensure compatible format selections in each market. The initial HD rollout began in January 2006 in 28 markets. By May 2007, the HD and HD2 multicast rollout was completed in the top 100 markets. There are currently over 1000 radio stations broadcasting in HD with approximately 700 multicasting. They program a variety of music or talk formats with member broadcasters responsible for programming each of their multicast channels. The HD2 multicasts will either complement existing on-air programming or introduce brand new music or talk formats

21 The Alliance committed $200 million to promote HD radio in 2006 , $250 million in 2007 and $230 million in 2008, positioning HD radio to be the nation’s largest radio advertiser. Ads for the technology will be tied to promotions for digital radio receivers and radio retailers Clear Channel Radio’s Creative Service Group has created format-specific on-air spots for any broadcaster to use entitled “Are you Def yet?” The Alliance is working with retailers, consumer electronic manufacturers and automakers to develop and distribute economical HD radio receivers Established a website that provides information about the technology, where HD2 channels are currently operating, and links to HD radio receiver retail outlets Clear Channel was the first of several radio broadcasters to sign a licensing deal with Apple which will allow listeners to “tag” music on their stations and later purchase those songs on iTunes. Broadcasters will encode their stations and HD side channels.

22 MSN Direct HD – Clear Channel and Microsoft are collaborating on a nationwide data delivery service using HD Radio technology, providing personalized and localized content to a variety of HD Radio receivers and in-car navigation units. An extension of Microsoft’s existing MSN Direct service which transmits information including traffic weather news alerts music new movie times sports and stocks Expected launch is 2008

23 Keeping up with the MP3 Generation
Podcasting has grown rapidly over the past few years An estimated ten million people downloading and listening to podcasts weekly An additional twenty-two million listen to podcasts in a typical month Twenty million weekly podcast listeners are projected by 2010 Over 400 Clear Channel stations are podcasting in more than 130 markets with nearly five million pieces of content delivered in the first half of 2007. Top Clear Channel podcasts are on the following stations: KLAC-AM, KZZP-FM, WHTZ-FM, WEND-FM, KFI-AM, and KNEW-AM The ad-supported podcasts will be free to listeners, enabling them to download portions or popular programming. Bridge Ratings June 2007; Arbitron/Edison Media Research, The Infinite Dial 2007: Radio’s Digital Platforms Akami/WebSideStory, 5/27/07 – 6/2/07

24 Clear Channel Online Approximately 10 million people visit our websites per month* 12.1 million member database of active radio listeners Over 600 streaming stations reaching a cumulative audience of 1.4 million people per week** Clear Channel streaming network ranks 3rd for online radio listening, behind Yahoo Music/LAUNCHcast and AOL ** More than 4 million on-demand plays a week Google Search – exclusive deal with Google provides listeners with the ability to search using Google without leaving the station’s website. Nearly 1 million searches a week on our websites Clear Channel has hired full-time online managers in three markets: New York, Chicago and Rochester. * Nielsen-NetRatings April 2007 ** Comscore Arbitron Online Radio Ratings August 2007

25 CCOMR On Demand Offerings
“Stripped” Unique content in an on-demand environment A weekly in-studio performance series created for artists who thrive on performing without the typical studio and video embellishments. Shot with four cameras in an intimate studio. Stripped features today’s true musical superstars including John Legend, Rob Thomas, Jewel, James Blunt, Hoobastank, and Brad Paisley. More than 40 artists have participated. Each “Stripped” session features an interview with the artist as well as audio and video of the artist’s performance. Weekly audience of 500,000

26 Videos On Demand Largest video on demand offering in the radio industry 5K+ videos from Eminem to Johnny Cash, including: Music videos Exclusive live performances Interviews Artist home videos Behind the scenes footage Available across all music websites Preceded by a :15 Video pre-roll Over 750,000 videos played each week

27 “Sneak Peek” Exclusive music on-demand before it’s available anywhere else.
Participating artists include Bruce Springsteen, Rihanna, Godsmack, Toby Keith, Bon Jovi, Eric Clapton, Backstreet Boys, and Paul McCartney. Most recent artist is Jay-Z whose newest album, “Kingdom Come”, is available now on over 220 Clear Channel station web sites before its official release Average of 100,000 listening occasions for each “Sneak Peek”

28 New! Uses the strength of our local radio brands to introduce audiences to new and developing artists early, before songs are “on radio”. Listeners choose from hundreds of songs and videos on-demand. 150 artists featured, 50 unsigned Exclusive home videos from featured artists NEW! Success stories include: James Blunt (1.9 million albums sold) Ne-Yo (debuted at #1 on Billboard album chart) Teddy Geiger (Top 40 hit, nearing Gold) Rihanna (Top 40 hits, Gold) Fort Minor (Top 40 hit) Josh Turner (debuted at #1 on Billboard Top Country Albums Chart) Accessed at or through a Clear Channel station website. Launched January 31, 2006 In-Concert Live & On Demand Features live performances from today’s and yesterday’s hottest artists. Every genre, every generation, from BCGB’s to the EnormoDome. In-Concerts have included Motley Crue, Iggy Pop, Norah Jones, Ozzy Osborne and Jack Johnson

29 Sponsorships available Launched January 2, 2007
8,000 unique visitors per month Clear Channel’s first exclusive online station not supported by an on air dial position Interactive Adult Alternative online radio station with artists from the 80s and 90s Allows audiences to engage in interactive features and get directly involved in programming the station. Using state-of-the-art mobile Digital Studios, listeners can: choose the songs they want to hear record their voice and play DJ upload audience profiles participate in weekly online music testing record elements for station imaging Sponsorships available Be a DJ for an hour – client specific name recognition and client exclusive commercial hour Audio/video components Mobile studio rights – “…broadcasting live from the “eChannelMusic, Coca-Cola Studio”

30 Social Networking Social networking site fostering interactivity and community for radio station listeners Listeners can create a blog create a profile share user generated content share exclusive Clear Channel on-demand content post messages live chat Link to networking site from station website. Initial stations include KHKS, Dallas CHR KTBZ, Houston Alternative Rock KIIS, LA CHR WKSC, Chicago CHR KYLD, San Francisco Rhythmic CHR KDWB, Minneapolis CHR WHTZ, WWPR, New York CHR, Urban Contemporary WFLZ, Tampa CHR WIHT, Washington CHR WLDI, West Palm Beach CHR KTRH, Houston News/Talk May 2007 launch “As our new Tech Poll III clearly shows, social networking sites like MySpace are highly used destinations. Roughly half of Rockers are active or occasional Participants. Even nearly four of ten Classic Rockers spend significant Time on social networking Sites, thus validating the need to stay current, visible, and make lots of “friends”. Jacobs Media

31 Clear Channel Moves To Wireless
“Move over satellite radio. A new breed of subscription radio services is about to take flight on cell phones.” (Mediaweek, January 3, 2006, Motorola Rivals Satellite Radio With iRadio by Katy Bachman ,) mSpot Radio CC streaming eight sports stations since May 2006 to subscribers of Sprint and U.S. cellular who carry mSpot compatible phones Music programming from ten Clear Channel stations is now available on mSpot’s radio services through Sprint and U.S. Cellular (March 2007) WHTZ New York WWPR New York WGCI Chicago KHHT Los Angeles WMIB Miami Five commercial streams including four Hispanic and one Urban format from the Format Lab Plans to distribute one hundred Clear Channel stations on mSpot

32 Z100 Mobile Relaunch of Z100 Mobile: Initially had been subscription based, available on Cingular phones. Now it’s free and available on all phones and works on nearly every carrier Interactive Listeners can have access to podcasts of popular station features request songs, be notified 15 minutes prior to song airing get “on demand” traffic reports, view the title and artist of the last ten songs played text the jocks dedicate a song Enter to win contests Plan to launch similar programs in the next twelve months

33 Other CC Technology Initiatives
April 2007 deal extends radio advertising to Google’s online advertisers, most of whom have not previously bought radio “Own a Radio Station” Advertiser “owns” specific hours of programming No commercial stop sets All Spots live and seamlessly integrated into fabric of the station Involved in all station promotions Clear Channel Total Traffic Network Real-time traffic information to all 2007 BMW models No subscription fee unlike most in-car navigation systems Content for Navigon’s navigation devices (MobileNavigator brand) in 125 metros. Service will be incorporated as a standard feature with no extra charge for users. Content will be available on Nextel or Sprint phones Clear Channel will be providing news, traffic and sports for a Blackberry application in the 25 largest markets Satellite Radio CC owns 10% of XM Programming 10 channels on XM

34 “Less Is More” Is Creating Better Radio
“Clutter is a major issue in our industry and our decision to limit the amount of commercial time and length of breaks, while reducing promotional interruptions, will benefit listeners, advertisers and the industry as a whole.” John Hogan, CEO Clear Channel Radio Clear Channel Radio has placed a new and significantly lower ceiling on the number of commercial minutes that are aired per hour as well as the length of each spot break and the number of units in each break. These unit and spot loads apply to every Clear Channel Radio station across the country effective January 1st, There are no exceptions. Each spot break has no more than four minutes of commercials or no more than six units. This includes local, national, network and barter – anything that has revenue attached to it. Clear Channel Radio Station promotional clocks were adjusted to a maximum of 2 minutes per hour effective October, 1st, 2004. All Clear Channel stations are running three shorter breaks per hour instead of the traditional two long breaks. Advertisers have the option of buying :60s, :30s, or :15s in a “first in pod, last in pod or island position.

35 Clear Channel Leads The Industry In Running Fewer Minutes and Units
57% of radio listeners report that they would increase their radio listening time if they felt that the number of commercials was noticeably reduced.* Clear Channel is currently running 17 percent fewer commercial minutes and 8% fewer units than the industry average** * PARAGON MEDIA STRATEGIES, “COMMERCIAL LOADS: IF A COMMERCIAL FALLS IN THE FOREST, WILL ANYBODY (NOT) HEAR IT? ** Media Monitors November 26, A-7P Top 10 markets

36 What Do Listeners Think of “Less Is More”?
A research study among commercial radio listeners conducted by Burke, Inc. and released in January 2005 showed the following: Listeners exposed in the test to a “Less Is More” radio clock noticed: Fewer commercials and shorter commercial breaks More music being played Shorter commercial breaks, shorter commercials, and fewer commercials relative to their favorite station The “Less Is More” clock with three breaks tested the best among the three clocks tested (traditional spot load w 3 breaks; lightened spot load w 3 breaks; lightened spot load w 2 breaks) According to the 2005 Spot Load Study by Arbitron and Edison Media Research, listeners prefer more frequent, shorter commercial breaks as opposed to long blocks of programming with long blocks of commercials. 57% reported preferring stopping three times an hour for a commercial break compared to 34% who preferred stopping two times an hour. LESS IS MORE RESEARCH, BURKE, INC. JANUARY 2005 ARBITRON/EDISON MEDIA RESEARCH SPOT LOAD STUDY 2005: MANAGING RADIO COMMERCIAL INVENTORIES FOR ADVERTISERS AND LISTENERS

37 The Burke Study Also Showed That :30s and :15s Can Be Just As Effective, And As :60s
Ad recall, a measure of effectiveness, appears to be related to other factors than commercial length. a :15 traffic sponsorship and two other shorter length spots were all in the top third of recalled spots Many nationally advertised and familiar brands using :60s did not out-perform commercials of shorter length. Of all the ads tested, on average, a :30 ad had 74% of the recall of a :60 ad On average, a :15 ad had 94% of the recall of a :60 ad On average, :15 and :30 ads had 82% of the recall of a :60 ad LESS IS MORE RESEARCH, BURKE, INC. JANUARY 2005

38 What Are The Advantages For An Advertiser?
‘TM’ A less cluttered environment means: Better radio – listeners are never more than four minutes away from content Stronger TSL - More listeners who listen longer A cleaner environment for our advertisers’ messages to be showcased More opportunities for spot placement within a spot break. Taking the first or last spot in a pod makes sure the advertiser’s message is always close to programming content. An advertiser also has the option of Island placement with a :60, :30 or :15 depending on the market and station clock.. More opportunities in length of commercials, :15s, :30s, or :60s, “Blinks” or “Adlets” for specific campaigns (e.g. branding, educational, calls to action) Ability to increase reach and frequency with the same dollar investment by using shorter spots. Entry to radio for advertisers who couldn’t afford :60s but who will be able to afford :30s and :15s

39 Not Only Are Clear Channel Stations Airing Fewer Commercials, They’re Airing Better Ones
Clear Channel Radio Creative Resource Group (CSG) - a new resource for advertising agencies and local stations, assisting them in creating engaging and memorable radio ads, offering creative coaching, online toolkits and ongoing direction in the creation, writing and production of compelling ad spots. Industry veterans are leading the group including former Clear Channel Radio VP of Creative Services, Jim Cook, Clear Channel Radio programmer Bob Case, and award winning writer Liz Smith. CSG has received numerous awards which honor excellence and recognize the creativity of marketing and communication professionals including nine Marcom Creative Awards and three Communicator Awards CSG’s new web site, is a resource for advertisers including client success stories, commercial examples, “Less Is More” Q & A, and research.

40 The Format Lab Formed a Content Research & Development Group to create compelling formats for Clear Channel and other broadcast companies’ HD2 channels Project 75 An initiative to develop 75 new formats, Additional formats are already being created. Blues Channel (Blues fresh today and legends of yesterday) Classica (Classical music for everyone) Full Metal Racket (Hard rock and heavy metal) Relaxation Channel (Soothing sounds of nature, peaceful prose, and meditation exercises) Workout Channel (30 minute cardio workout mix) Sirens (All female artists who are on the cutting edge of today’s music) Debuting a Clear Channel online portal to the Format Lab’s channels in summer second pre-roll commercial Will include: All CC streaming terrestrial stations HD side channels Format Lab channels

41 Electronic Measurement Means Better Accountability
In June 2005, Clear Channel Radio issued a Request for Proposals to create a state-of-the-art radio ratings system to accurately represent radio’s true performance and value to advertisers. An electronic measurement system would provide a multi-media measurement system including broadcasts carried over the air, by cable, satellite or on the internet. It can also measure audio from “time shifted” devices such as DVRs and ad insertion technologies. Two markets are currently using electronic measurement (Arbitron’s Personal People Meter – PPM) for radio ratings: Houston and Philadelphia. Arbitron plans to convert the top ten markets to PPM currency by the end of 2008.

42 Electronic Measurement Implications for Radio
The PPM results in higher daily and multi-week cume for radio, showing radio to be much more of a reach medium than traditionally thought. Erwin Ephron, father of “recency planning” and partner at media consultancy Ephron, Papazian & Ephron, Inc., notes that “when radio is planned differently, especially with the help of the new Arbitron PPM data, it is an ideal reach medium.” Using data from Arbitron’s Philadelphia test of the PPM, Ephron showed that “using more stations and days with lower weekly weight per station turns radio into a highly competitive reach medium”. The Ephron Letter, June 2005, Reach Trumps Frequency: How Radio Can build Business in A PPM World

43 In Summary, Radio Remains One Of The Top Media Choices Among Americans Don’t Fall For The “Radio Myths” Remember: Radio still reaches over 90% of the population each week Radio still consumes a lot of people’s time each week Radio’s reach dwarfs that of new media such as satellite radio and digital music players Consumers of digital radio are still listening to broadcast radio Kids use of “old” media is not displaced by “new” media due to their multi-tasking capabilities Radio remains the 2nd most used medium among children 8-18 on a typical day Radio is the medium which has a unique emotional connection to consumers Advertisers enjoy a synergy effect when radio is added to television or newspapers in an ad campaign Radio can boost an advertiser’s ROI, and has been shown to deliver nearly 50% better return on investment than television Radio is on the cutting edge of technology with HD, podcasting, internet streaming, custom online programming, social networking, mobile radio, and a move toward electronic measurement Clear Channel Radio is taking the lead in creating a better listening environment for both listeners and advertisers through its “Less Is More” initiative, Creative Services Group, Format Lab, and Online initiatives. The NAB’s new new ad campaign says it best : “Radio. You hear it here first.”

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