Radio Has 'Sunk Cost' in Data, Radio Execs Say

LAS VEGAS -- Radio broadcasters have invested in data and connected with listeners through Facebook, and should be concerned about the current backlash against consumer data collection, radio executives said on a panel at the NAB Show. Broadcasters need to “keep a close eye” on consumers' reaction to data collection, because radio broadcasters already have a great deal of “sunk cost” at stake in consumer data, Cox Media Group Executive Vice President Bill Hendrich said. “We have all benefited from Facebook,” said broadcast consultant Fred Jacobs, president of Jacobs Media Strategies.

The current negative attention on Facebook and data privacy issues means consumers are going to be more aware of the trade-offs they're making, Entercom Senior Vice President-Corporate Business Development Tim Murphy said. Though some of the questions about consumer data collection are unsettling, Hendrich said as businesses radio broadcasters don't want the public to “overreact,” because the industry is already invested in big data.

“Data is currency,” and its value isn't going away, Murphy said. “The tide of data ruling the world is not going to stop.” Since surveys consistently show radio as a highly trusted medium, radio broadcasters should be careful to be transparent with consumers about what data is being collected and why, Beasley Broadcast Group CEO Caroline Beasley said. Data has become so important to the industry that Beasley considered hiring a data scientist, she said.

Technological growth and data collection are a way for radio to solve its advertising attribution problem, Murphy said. “We're losing dollars to less effective advertising because they can show proof,” Murphy said. Whatever method radio eventually adopts to better gauge listener numbers, it must be commonly adopted to be effective. Advertisers need a “common currency” and comparable metrics to understand why they should buy radio spots, Hendrich said.

The executives said the rise of smart speakers and podcasts could be a boon for radio. Consumers listen more after buying a smart speaker, Beasley said. To take advantage of smart speakers, radio stations need to focus on making sure consumers will be able to correctly say the station's name to allow speakers to find stations by voice command, Hendrich said. Taking advantage of the boom in podcasting isn't as easy as it might seem for radio because of the longer format and different expectations, the executives said. Putting a portion of a standard morning radio show online isn't the route to a successful podcast, Hendrich said.