THE CANADIAN AUDIO LANDSCAPE 2018 UPDATE. 1 Radio Connects September 2018

Transcription

1 THE CANADIAN AUDIO LANDSCAPE 2018 UPDATE 1 Radio Connects September 2018

2 WHAT YOU NEED TO KNOW. The following provides an overview of the audio landscape in Canada. Key radio facts, figures, insights and its advertising impact on business and consumers are included. All information is sourced and noted and comes from syndicated and bespoke research. The contained information in this document are some key best practices when it comes to planning and executing radio. Like all documents of this nature, it is meant as a guideline and not a de-facto approach. Each business need is unique and the same approaches won t work for all products or against all consumers, but there are some brilliant basics that apply to all plans and executions. Also important to remember is not all markets are the same and there are unique differences between English and French Canada that should be observed. 2 Radio Connects September 2018

3 Glossary of Terms Definitions of the terminology used in this document. Audio Streaming Any audio transmitted online as a continuous flow; includes music streaming services, live streaming of AM/FM or other audio on demand. Pureplay music streaming Streaming of those music services available online only, such as Spotify, Apple Music subscription service, and cbcmusic.ca. Ad-supported music streaming A music streaming option offering users limited interactivity (typically a range of playlists with limited ability to skip songs) at no charge with advertising. Ad-free subscriptions Paid subscriptions to pureplay music streaming services such as Spotify, Apple Music, Google Play Music that allow on demand access to a virtually unlimited choice of music with no advertising. Podcasts Pre-recorded digital audio programs, usually spoken word, that you can subscribe to in a feed and/or download to listen to later. 3 Radio Connects September 2018

4 Contents. Audio Landscape Truth in Audio. An update on the evolving audio landscape and the impact of streaming and music services. AM/FM radio fundamentals and who s listening. Year over year listening trends, daypart trends and demographic overviews. Radio s impact on business. Hearing ads on the radio makes people take action. Behaviours and ROI on the path to purchase. Radio planning and activation essentials. Basic principles to follow when executing AM/FM radio buys. 4 Radio Connects September 2018

5 Truth in Audio AM/FM Radio is the dominant audio platform. Radio is thriving in a diverse audio landscape and technology is making it even more accessible across platforms. It dominates in the home, in the car and at work. The audio landscape is ever evolving, and AM/FM radio has been evolving and adapting in pace. Currently there are a many misconceptions about radio and its place in the audio landscape. Commercial radio is waning It s Not. Millennials don t listen to radio They Do. Spotify and similar platforms are the new radio They re Not. Radio doesn t build business It Does year old s are listening. Millennials do listen to radio, 4 x more than they listen to Spotify and the older they get, the more they listen to AM/FM radio. (Source: Radio on the Move, Wave 9) Technology is changing how Canadians curate music. Personal music business model is changing from owning to renting. Platforms like Spotify, Google Music and others have changed the business model. AM/FM Radio inspires action. Most Canadians recall taking action after hearing a brand, product or service advertised on AM/FM radio. 53% took action either purchased it, told someone else about it or went on line for more information (Source.Radio on the Move interim summer 2018 report). 5 Radio Connects September 2018

6 Radio Today RADIO CONNECTS WITH CANADIANS. Radio connects Canadians with new music, local and global news and keeps them entertained and informed. Apps, smartphones and smart speakers empower listeners to take their favourite stations, personalities and podcasts with them. And audiences keep coming back for more. 6 Radio Connects September 2018

7 It s always on. On Air On Line On Target The original mobile platform. A mass medium capable of easily delivering your message to many people. Digital capabilities offering interactive opportunities. An environment that delivers consumers who are engaged and passionate about the content. Targetable assuring the right people are exposed to your message. Complements and enhances on air campaign by reaching consumers using multiple touch points. Offering companionship and information. A trusted medium and always available especially during times of crisis. Delivers content wherever and whenever listeners want it. Exposure to the message when and where consumers are ready to buy or shop. 7 Radio Connects September

8 It s on target, on time and online. Target selective reach Radio provides an efficient way to target specific audiences through format, daypart and listener trends. Builds frequency Radio schedules can efficiently build frequency over time while maintaining reach. Remotes, sponsorships, added-value and promotional opportunities. Radio s agility and flexibility allows for additional opportunities to extend the campaign beyond on air spots. No significant seasonal drop-off Tuning to radio is consistent across seasons and it s content is always fresh and new. Listeners are loyal. Market selectivity Radio can deliver effectively at a local level and can minimize spill across trading areas. Ability to reach the light TV Viewer Studies have shown reach against the valuable light TV viewer can be delivered by radio. Multiple platform availability due to apps, station streaming and station social sites Advances in technology allows radio to be truly mobile and on demand across platforms. 8 Radio Connects September 2018 Compliments digital buys Canadians take action online after hearing a radio ad. Action that is often mis-credited to digital. IT REACHES CONSUMERS ON THE LAST MILE IN THE PATH TO PURCHASE

9 9 Radio Connects September 2018 RADIO IS OUR COMPANION Radio is a social experience that has evolved over time. A continuing relationship between the listener and personalities, something that doesn't happen with audio streams or music collections.

10 Radio, growth with stability. Number of Canadian radio stations has increased over the years. Total Commercial Stations Opportunity for growth as HD stations come online. 10 Radio Connects September 2018 Source: CRTC Report 2016

11 Canadian Radio, a $1.6 billion dollar industry. Market Share Combined, Bell and Rogers claim over 60% of total Canadian market. Newcap recently sold to Montreal s Stingray (formerly Galaxy). 35% 26% Cogeco s recent acquisition of RNC stations in Quebec gives them the dominant share in French language radio. 14% 7% 10% 8% Bell Canada (BCE) Rogers Corus Newcap Cogeco Other 11 Radio Connects September 2018 Source: CRTC Report 2016 Source: CRTC Monitoring Report 2017

12 The audio landscape in Canada is changing rapidly. Spotify launched: September 2014 Apple Music launched June 2015 iheartradio app launched: October 2016 Radioplayer app launched: March 2017 Amazon Echo Smart Speakers December Google Play Music launched: May 2014 Tidal Music launched: December 2014 Amazon Prime Music November Google Home 2017 Smart Speakers June Radio Connects September

13 The audio universe is expanding with tracking of personal music. 1. Albums (Physical + Digital) Sold: > 2017 = -18% 294 CANADIANS 18+ AUDIO HOURS (MM s) BY PLATFORM: # of Streams: > 2017 = +71% #1 Reason listening to PurePlays = Listen to Any Song I want when I want 4. 50% of Daily Spotify Listens have Premium Subscription (No Ads) 5. Audio Time* Spent 18+ Canadians - Millions of Hours > 2017 = +25%. Radio : Receiver + Streaming Satellite Online Audio/Music 13 Radio Connects September 2018 SOURCE: MTM SPRING 2017 / NIELSEN CANADA YEAR END REPORTS ROTM 2017/2018 W9 * Audio Time = Radio Receiver + AM/FM Streaming + Satellite + Online Audio/Music

14 Personal music business model is changing from owning to renting. + + Physical Sales In Decline Brick and mortar stores and physical album sales have been in a steady decline. Rented Audio Libraries Growth of digital platforms has changed how Canadians manage their personal music libraries. Spotify September 2014 Apple Music June 2015 Google Play May 2014 Amazon Prime November Radio Connects September 2018 Source: Nielsen 2016 a& 2017 Canada Year-End Reports. On demand audio data from Apple Music, Google Play, Spotify, Tidal, and Slacker * Includes physical and digital albums, as well as TEA (Track Equivalent Albums) from single song sales

15 Canadians spend less time with streaming and SiriusXM than Americans. 15% Americans stream music almost twice as much as Canadians. Data plans often impact usage outside of the home. 9% 4% 7% Sirius XM not as developed in Canada. Streaming Sirius XM Canada U.S. 15 Radio Connects September 2018 SOURCE: Edison Share of Ear Canada 2017; U.S: Edison Research, Share of Ear, Q2-Q4 2017, Q1 2018

16 Most of pureplay streaming reach is duplicated. % who listen to AM/FM Radio on a typical weekday Close to 90% of pureplay music streamers still listen to AM/FM Radio daily. 87% 89% 90% Daily pureplay streamers Weekly pureplay streamers Monthly pureplay streamers 16 Radio Connects September 2018 SOURCE: Radio on the Move Q.E1 Thinking of all the time you may listen at home, in the car, or at work, how much time in total do you spend listening to AM or FM radio stations during a typical weekday? Base: Canadians, aged 18+; pureplay streamers in past 24 hours (n=457); pureplay streamers in past week (n=781); pureplay streamers in past month (n=1,004)

17 Smart speaker adoption is growing rapidly Nearly tripled since before Christmas. Just one year after Google Home arrived in Canada, more than 1-in-10 Canadian adults own a smart speaker. More players entering the field. Samsung will soon be joining Google, Amazon, and Apple. Microsoft rumored to be developing their own. % of Canadian Adults who Own Smart Speakers 11% Audio branding increasingly a thing. The growth of smart speakers is opening new conversations at ad agencies around audio branding. 4% Nov/Dec 17 June Radio Connects September 2018 SOURCE: Radio on the Move Q.F17 Which of the following would best describe your experience with the Amazon Echo and Google Home smart speakers?/ and Apple HomePod smart speakers (June 18)? Base: Canadians aged 18+ (n=2035)

18 Google Home leads smart speakers in Canada. Different picture than the U.S. Google Home was first into the market in Canada and backed it up with a major marketing campaign, unlike Google Home 3% 8% the U.S. where Amazon launched first. Amazon Echo flat. Little or no growth since its launch in Canada just before Christmas. Amazon Echo 2% 2% Jun 18 Nov/Dec 17 HomePod to earliest adopters only. Apple s HomePod launched in Canada in June when the Apple HomePod 2% survey was in field. Could have been acquired via the U.S. 18 Radio Connects September 2018 SOURCE: Radio on the Move Q.F17 Which of the following would best describe your experience with the Amazon Echo and Google Home smart speakers? [I already own an X] *brackets indicate Canadian release date Base: Canadians aged 18+ (n=2035)

19 Smart speakers open new opportunities to listen to audio. Impact of Smart Speakers on Time Spent with Audio (by % of owners) +40% Net increase in listening to music: +40% Listening Less Listening More A total of 41% of early smart speaker owners say they are listening to more music since they got their smart speaker, with just 1% saying they were listening to less music. 41% +13% +9% Net increase in listening to AM/FM: +13% Smart speakers are the new radios for many early smart speaker owners. Net increase in podcast listening: +9% Google Home in particular provides easy access to most recent episodes of favourite podcasts. 16% 14% -3% -5% Music AM/FM Podcasts 19 Radio Connects September 2018 SOURCE: Radio on the Move Q.F21. How would you say having a smart speaker at home has affected the amount of time you spend listening to each of the following? *non-listeners and those who did not report any changes not shown Base: Canadians aged 18+ who own a smart speaker (n=203)

20 Spotify is the most listened to pureplay service. Spotify 1 in 5 Canadians listen. One in five Canadians listen to Spotify s ad-supported and ad-free services weekly, up 3 points from 16% in November/December Daily listening is up 1%. Overall growth due to increases in ad-free subscriptions. Spotify 10% 19% Apple Music growing faster than Spotify Apple Music, solely an ad-free paid subscription service, is showing more robust growth than Spotify, with weekly listening up 6 points from 8% in late Apple Music 6% 14% Listen weekly Listen daily Google Play + YouTube Music. In May of this year, Google announced the launch of a new premium service, YouTube Music, and has confirmed that it will replace Google Play Music in Google Play Unlimited 3% 7% 20 Radio Connects September 2018 SOURCE: Radio on the Move Q.F13 Overall, thinking of all locations, how often, if ever, would you say you listen to [service]? Base: Canadians aged 18+ (n=2035)

21 Who s listening to Spotify and why. Listen to Spotify ( Ad Free + Ad Supported ) 1+ x/week Listen to Spotify ( Ad Free + Ad Supported) daily Early adopters most likely to subscribe to music platforms year old s are also the most likely to use adblocker technology. On demand access the priority. 65% of Canadians who use pureplay services do it to have immediate access to songs. Curated playlists less important. Only 1/3 of pureplay streamers name curated playlists radio s domain as a main reason for listening. 32% 20% 16% 16% 9% 7% 4% 2% All adults Radio Connects September 2018 SOURCE: Radio on the Move Q.F13 Overall, thinking of all locations, how often, if ever, would you say you listen to: Spotify? Base: Canadians, aged 18+ (n=3470)

22 Millennials listen to AM/FM radio 4 x more than Spotify. Listen to AM/FM on "a typical weekday" Listen to Spotify daily 88% 83% 90% 91% Millennials tune to radio to stay connected. +4x 20% 9% 7% 2% 22 Radio Connects September 2018 All adults SOURCE: Radio on the Move Q.F13 Overall, thinking of all locations, how often, if ever, would you say you listen to: Spotify? Q.E1 Thinking of all the time you may listen at home, in the car, or at work, how much time in total do you spend listening to AM or FM radio stations during a typical weekday? Base: Canadians, aged 18+ (n=3470)

23 When you buy ads on AM/FM, you get almost all of Spotify s audience for free. % of all Canadian adults Ad-supported subs also tune AM/FM. In fact, an even higher % of ad-supported subs who listen to Spotify weekly reported listening to at least some AM/FM on a typical weekday (95%, compared to 89% of all Canadian adults). Similar picture in demo. A total of 92% of year-olds with an ad-supported subscription who listen to Spotify weekly said they also listen to some AM/FM on a typical weekday. % of all 18-34s delivered exclusively by Spotify: just 1.2% (down from 1.8% in Nov/Dec 17). Listen to some AM/FM on a typical weekday 89% Ad-supported subs listening to Spotify weekly 8.3% % of all adults delivered exclusively by Spotify 0.4% 23 Radio Connects September 2018 SOURCE: Radio on the Move Q.F13 Overall, thinking of all locations, how often, if ever, would you say you listen to [service]? Base: Canadians aged 18+ (n=2035)

24 Convenience, free content and to be connected are reasons why pureplay streamers listen to AM/FM. It's free To get practical info (traffic/weather/ads) To hear the latest news It's convenient To hear whats happening in general For the local connection For the personalities - the human connection To hear new music I wouldn't hear otherwise To put me in a good mood All Past Month Pureplay Streamers 25% 36% 32% 49% 45% 56% 55% 54% 61% It's convenient To get practical info (traffic/weather/ads) To hear the latest news To hear whats happening in general It's free For the local connection To hear new music I wouldn't hear otherwise For the personalities - the human connection To put me in a good mood Daily Spotify Users 26% 36% 32% 41% 57% 52% 51% 50% 49% 24 Radio Connects September 2018 SOURCE: Radio on the Move Q.F16e. Given all the other ways you have to listen to music, which of the following reasons best describe why you still listen to AM or FM radio? Base: Canadians aged 18+ who listened to music streaming services in the past month, and also to AM/FM 30+min in typical weekday (n=737) 24

25 AM/FM radio fundamentals and who s listening As the audio landscape expands and becomes more measurable, AM/FM radio consistently delivers valuable audiences across all regions and all demographics. 25 Radio Connects September 2018

26 Listening by region/language. 89% OF CANADIANS 12+ LISTEN EVERY WEEK TO AM/FM RADIO Ad 1834: 80% weekly reach 83% 86% 85% 85% Total Quebec: 87% French: 86% 87% 85% Ad 1849: 85% weekly reach Ad 2554: 89% weekly reach 87% English: 82% 86% 87% 26 Radio Connects September 2018 Source: P12+ All M-Su 5a-1a by Province Numeris Diary Fall 2017)

27 Canadians choose to spend time with radio more than any other audio. SHARE OF EAR CANADA Radio Connects September 2018 Source: Edison Research Share of Ear 2017 Canada Avg. Daily Listening P13+ AM/FM includes over the air streams Owned Music includes CDs, digital music files etc. Streaming Audio includes pureplays such as Spotify, Apple Music, Google Play etc.

28 Radio has solid time spent across multiple demos. Radio TV Internet Print ( D/C Newspaper + Magazines) MALE FEMALE HHI +$100,000 UNIVERSITY EDUCATED MARRIED SINGLE Atlantic Quebec Ontario Prairie B.C. 28 Radio Connects September 2018 Source: RTS FALL Avg. Total Time Spent by Medium

29 Radio Reaches 27.3 MILLION people Weekly. 89% of 12+ Population 50/50 17 Hrs/wk Daytime 35% M Hours Per Week F Hours Per Week. Canadians 12+ spend 17 hours per week listening to radio. Canadians spend most time listening during the day Mon-Sun 10am-3pm 29 Radio Connects September 2018 Source: Numeris Diary FALL 2017 M-Su 5a-1a Total Canada

30 Canadians tune in everywhere. In 2017, Canadians 12+ spent 451,959,000 hours with radio, reaching 27,261,900 people weekly. (Source: P12+ All M-Su 5a-1a Numeris Diary Fall 2017) In 5 of Canada s largest markets (T/M/V/C/E), Canadians 12+ spent 136,332,800 hours, reaching 13,122,500 Canadians weekly. (Source: P12+ M-Su 2a-2a Numeris PPM Data wks 1-13) 30 Radio Connects September 2018

31 Canadian AM/FM radio dominates audio at WORK. Time spent AM/FM Radio 63% Owned Music 13% Streaming Audio Sirius XM Podcasts 4% 11% 6% CANADIAN AM/FM RADIO HAS 89% SHARE OF AD SUPPORTED AUDIO AT WORK TV Mus. Ch. 2% 31 Radio Connects September 2018 Source: Edison Share of Ear Canada 2017; U.S: Edison Research, Share of Ear, Q2-Q4 2017, Q

32 Canadian AM/FM radio dominates audio in the CAR. Time spent AM/FM Radio 73% Owned Music 12% Sirius XM Podcasts 2% 11% CANADIAN AM/FM RADIO HAS 96% SHARE OF AD SUPPORTED AUDIO IN THE CAR Streamed 4% 32 Radio Connects September 2018 Source: Edison Share of Ear Canada 2017; U.S: Edison Research, Share of Ear, Q2-Q4 2017, Q

33 Canadian AM/FM radio dominates audio at HOME. Time spent AM/FM Radio 59% Owned Music 14% Streamed TV Music Other 3% 11% 10% CANADIAN AM/FM RADIO HAS 87% SHARE OF AD SUPPORTED AUDIO AT HOME Podcast 3% 33 Radio Connects September 2018 Source: Edison Share of Ear Canada 2017; U.S: Edison Research, Share of Ear, Q2-Q4 2017, Q

34 What Canadians listen to. 12+ Ad Ad Ad Ad News /Talk 24% News /Talk 16% Hot AC 17% Hot AC 21% Hot AC 11% Hot AC 15% T40 / Mainstream 17% T40 / Mainstream 14% T40 / Mainstream 9% T40 / Mainstream 14% 34 Radio Connects September 2018 Source: Numeris Diary Fall 2017 Mo-Su 5a-1a Total Canada all radio stations Based on total hours News /Talk 14% News /Talk 10%

35 Behaviours change as life stages change. As Millennials age, their time spent with radio increases Millennials measured in 2013 are yrs. Old They listened to 30,422,219 hours of radio in one week. +28% increase from when they were Millennials measured in 2013 are yrs. Old They listened to 29,231,919 hours of radio in one week Millennials measured in 2013 are yrs. old They listened to 27,827,395 hours of radio in one week Millennials measured in 2013 are yrs. Old They listened to 25,925,086 hours of radio in one week yrs. old 25.9MM hrs/wk Millennials measured in 2013 are yrs. Old They listened to 23,840,853 hours of radio in one week 35 Radio Connects September 2018 Source: Numeris PPM data Mo Su 2a 2a Total Meter Ctrl Total Radio Avg. Weekly Total Hours Calendar Years Jan Dec, Demos as labeled.

36 APPLIES TO TEENS AS WELL % of Population 6 Hrs: 42 Min % of Population 5 Hrs: 56 Min 36 Radio Connects September 2018 Source: Numeris PPM data Mo Su 2a 2a Total Meter Ctrl Total Radio Avg. Weekly Total Hours Calendar Years Jan Dec, Demos as labeled.

37 Radio has consistent Reach. A MEDIUM FOR ALL SEASONS Jan 2017 June 2017 Dec Jan June 2017 Dec 2017 Jan 2017 June 2017 Dec 2017 Jan 2017 June 2017 Dec Jan June 2017 Dec 2017 Jan 2017 June 2017 Dec % 94% 95% 94% 94% 93% 94% 94% 96% 95% 95% 94% 93% 94% 95% 94% 94% 93% 94% 95% 96% 94% 95% 94% 94% 95% 96% 95% 95% 95% 94% 94% 96% 94% 95% 94% A2+ A18+ A18-34 A18-49 A25-54 A Radio Connects September 2018 Source: Numeris PPM Data Mo-Su 2a-2a Total Meter Ctrl Total Radio Avg. Wkly Reach % Calendar year 2017 Jan-Dec Demos as labelled

38 Radio listening peaks during the Workday for A18+ and during Drive for A READIO REACHES 86% OF AD25-54 EACH WEEK DURING 3-7PM BR 5A-10A 71% DA 10A-3P 83% DR 3P-7P 83% EV 7P-1A 66% BR 5A-10A 73% DA 10A-3P 86% DR 3P-7P 84% EV 7P-1A 69% BR 5A-10A 66% DA 10A-3P 80% DR 3P-7P 82% EV 7P-1A 69% BR 5A-10A 71% DA 10A-3P 83% DR 3P-7P 84% EV 7P-1A 70% BR 5A-10A 74% DA 10A-3P 85% DR 3P-7P 86% EV 7P-1A 71% BR 5A-10A 74% DA 10A-3P 89% DR 3P-7P 83% EV 7P-1A 65% A2+ A18+ A18-34 A18-49 A25-54 A Radio Connects September 2018 Source: Numeris PPM Data By Daypart M-Su Total Meter Ctrl Total Radio Avg. Wkly Reach % Calendar year 2017 Jan-Dec Demos as labelled

39 Radio s impact on business As the audio landscape expands and becomes more measurable, AM/FM radio consistently delivers valuable audiences across all regions and all demographics. 39 Radio Connects September 2018

40 AM/FM Radio inspires action. After hearing a brand, product or service advertised on AM/FM radio, more than half of Canadian adults (53%) acted on one or more of these things: PURCHASED IT TOLD SOMEONE ABOUT IT WENT ON LINE FOR MORE INFO 40 Radio Connects September 2018 SOURCE: Radio on the Move Q.Ad1. Whether listening in the car or elsewhere, have you ever taken any of the following actions after hearing a brand, product or service advertised on AM/FM radio? Base: Canadians, aged 18+, (n=2035)

41 AM/FM Radio drives digital search. Though typically unattributed to radio, nearly 4-in-10 Canadian adults say that hearing an ad on AM/FM radio led them to seek out more info online, up 5-points from late Ever gone online for more info 34% 39% Nov/Dec 17 June Radio Connects September 2018 SOURCE: Radio on the Move Ad1. Whether listening in the car or elsewhere, have you ever taken any of the following actions after hearing a brand, product or service advertised on AM/FM radio? [Gone online to get more information] Base: Canadians, aged 18+, (Nov/Dec n=3470) / (June n=2035)

42 AM/FM Radio activates affluent consumers. $100K+ HH more likely to take action. Nearly two-thirds of Canadian adults in these affluent households report having acted on an ad they heard on the radio, Especially on the last mile in the path to purchase. Canadians in affluent households spend more time in their cars or trucks, making them much more likely than those in lower income households to have been influence by an ad they heard in the car. Ever gone online for more info, purchased, or told someone about a product, service or brand after hearing an ad on radio 43% 57% 64% HHI income <50k HHI income k HHI income 100k+ Ever heard something on the radio in the car that affected a purchase you were about to make / store you were about to visit 26% 37% 41% HHI income <50k HHI income k HHI income 100k+ 42 Radio Connects September 2018 Source: The Canadian Podcast Listener a Landscape Study / Summer 2017 & May 2018 Ad1. Whether listening in the car or elsewhere, have you ever taken any of the following actions after hearing a brand, product or service advertised on AM/FM radio? Ad3. Has something you heard on the radio in the car ever affected a purchase you were about to make, or a store/location you were about to visit? Base: Canadians, aged 18+ (HHI <50K: n=731; HHI K: n=645; HHI 100K+: n=361)

43 One-in-seven Canadians say they went online in the past month to get more info about an ad they heard on radio. % went online to seek more info on an ad heard on AM/FM radio past month 15% 17% 20% 18% Users of audio platforms index higher. Those Canadians who over index on their use of audio platforms respond more than average Canadians when there here a commercial on AM/FM radio. All Cdns 18+ AD18-34 HH Income $100K Cdns 18+ = 15% 23% 26% 27% University Ed. 43 Radio Connects September 2018 Sat. Radio Users Pureplay Stremers SOURCE: Radio on the Move Q.Ad2b. When was the most recent time you went online to get more information about a brand, product or service after hearing it advertised on AM/FM radio? Base: Canadians, aged 18+, (n=3470) Daily Spotify Users

44 AM/FM Radio provides the soundtrack for the last mile in the Path to Purchase. Listened to AM/FM Radio while going to, or doing this in the past 24 hrs: Shopping at a mall or plaza Grocery shopping To the drug store / pharmacy Hardware/home-improvement store Stopping at a coffee shop Picking up lottery tickets Take your car/truck in for servicing Fast food restaurant or drive-thru To the bank To a movie A casual or fine dining restaurant Stopping for beer, wine or liquor Visiting a car dealership 77% 76% 76% 75% 75% 75% 75% 74% 74% 74% 74% 71% 69% 44 Radio Connects September 2018 SOURCE: Radio on the Move C5d. And still thinking about the time you spent in a private vehicle in the past 24 hours, did you do any of these things while driving, or use your vehicle to get there? C5e. Were you listening to AM/FM radio in the car while doing or going to this? Base: Canadians, aged 18+, in private vehicle in past 24 hours who used vehicle for activity in past 24 hours; base varies depending on activity

45 Radio amplifies spend. Men s Personal Care Brand Study $12 Return on Advertising Spend +8% Key Sales Element Title Driver Here +0.8% Category Share For every $1 spent on AM/FM Radio, the men s personal care brand saw $1.23 on ROA spend among male AM/FM radio listeners. The parent brand saw $11.96 ROA spend among all households Parent brand saw +8% sales lift among male AM/FM Radio listening households The parent brand saw a +0.8% increase in category share, which can translate into millions in revenue. 45 Radio Connects September 2018 SOURCE: Nielsen Catalina Solutions, analysis of men s personal care brand s AM/FM Radio campaign 03/27/17-10/27/17 5,794 households, 4,549 analysis panelists 1,029 total parent brand buyers

46 Radio advertising ads lift. Nielsen Catalina Solutions looked at the impact of radio advertising on a snack product. Product studied usually gets 10.5% share of all sales in the category. When 9% of the consumers were exposed to radio campaign for the product, the snack product saw a 13.9% share of sales against those listeners. Generated a 32% increase in share. Increased sales generated by those exposed to radio ads improved market share by 3.4 points.. Better with radio than without. Including the 91% of those not exposed to the product s radio campaign, the weighted average of 0.3% increase in share points is higher than expected without advertising. Radio can have a greater impact in overall sales, particularly at the right GRP level. 46 Radio Connects September 2018 SOURCE: Nielsen Radio Rediscovered 2017

47 AM/FM Radio has positive impact on product sales. Grocery $23 Radio pays back. Key adverting categories were measured over three years to evaluate ROI. In all categories studied, radio surpassed its initial investment when evaluated against sales. Autos & Aftercare Department Stores Retail/Mass Merchandisers Telco Home Improvement $9 $15 $14 $17 $21 Snacks $6 $1 to $10 ratio. On average, for each $1 invested, radio advertising yields a $10 return on advertising spend (R.O.A.S.). Beer Candy QSR Soft Drinks $4 $3 $3 $2 Breakfast Bars $2 47 Radio Connects September 2018 SOURCE: Nielsen studies

48 Radio planning and activation essentials Radio stars in the theater of the mind, stimulates emotionfilled images within the listener s own mind voices, music, sound effects, recall of video images. No matter how small or large the advertiser, Radio allows creativity to brand and create a unique identity that consumers will remember. The more information known about a product or consumer, the more effective a radio campaign is. 48 Radio Connects September 2018

49 Measurement Numeris is the de-facto measurement for Television and Radio in Canada Diary measurement. Radio listening in diary markets is measured through paper and online diary formats. 92 markets surveyed in Fall 28 markets surveyed in the Spring Remaining markets, typically small or rural are purchased on cost per occasion basis Central area audience numbers in radio are used to generate station rating points for demographic targets. The definition of a central area generally corresponds to Statistics Canada Census Metropolitan Areas, Census Agglomeration, Cities, Counties, or Census Divisions or Regional Districts. Refers to a Numeris defined geographical area assigned to a station in a market. Passive Measurement - Personal People Meters (PPM) Radio and TV share the same PPM panels that provides measurement across 52 weeks of listening. Major markets are measured for 52 weeks continuously Toronto, Montreal (English + French), Calgary, Edmonton and Vancouver are measured continuously through PPM technology. 49 Radio Connects September 2018 Extended market audience numbers are used to generate total station impression deliveries for demographic targets. A Numeris defined geographic area comprised of a market and adjacent counties or census divisions, which is assigned to a broadcast market on the basis of majority audience delivery. Also known as Extended Market (EM) Full Coverage Area The geographic area covered by a station s signal, which may vary for different stations in a given market. May change from survey to survey. The defined geographical area comprised of a market and adjacent counties or census divisions, which are assigned to a broadcast market on the basis of majority audience. Cannot be expressed as %, (reach%, rating) because a geographic area is not specifically defined.

50 Targeting key demographics. Identifying the consumer. Radio is a targeted reach and frequency medium and can be planned on a defined and targeted demographic or audience skew. Targeting beyond the currency demo. Although it is key to identify the buying demo as the currency demo upon which costs and negotiations are based, station selection can be informed by a tighter demographic composition as Men or Women 25-45, within the Ad or Wm currency demo. Balancing the audience composition. It s important to balance a buy against men and women, older and younger ends of the demo. This ensures the buy delivers against the key consumer profile. Improves overall audience composition of the buy. It s Important to balance skew when buying against adults so that neither men nor women are overdelivered against. Overly targeted buys have specific impact on the execution. A finite or narrowly targeted radio campaign can impact the buy through the use of fewer stations resulting in possible reach reduction with potentially higher frequency and a likely increase in CPR s. 50 Radio Connects September 2018 Psychographics, behaviours and factors like household income and purchase history are available within Numeris Diary / PPM / RTS data to further identify key stations.

51 Planning essentials. Understanding brand objectives, target behaviours and individual market dynamics is key Planning factors There are key factors that need to be considered when planning radio weight levels. What other media is planned in the market Individual market dynamics, English vs. French audio behaviours PPM vs. Diary market Target Demographics Advertising category Time of Year Product purchase cycle Setting Reach Levels Reach: What % of the target market audience needs to be reached to achieve objectives, on a weekly and campaign level? Reach will build faster in PPM markets vs. diary markets. Setting Frequency Levels Frequency: How many times does the target market need to hear the message to take the required action, on a weekly and campaign level? Frequency will build faster in Diary markets vs. PPM markets Planning effective GRP levels Must take into consideration the marketing insights (brand health, competitive landscape, SOV objectives, consumer target) which inform the individual market objectives. 51 Radio Connects September 2018

52 Buying essentials. : 52 Radio Connects September 2018 A radio buy is put together based on the planning brief and buy objectives. Building the buy: Criteria in the buy brief. Key pieces in establishing the buying guidelines Demographic insights Timing Markets Commercial Length Estimated budget Radio stations are typically selected based on: Station ranking on planned target how much reach the station delivers Format of the station Station skew does it deliver males or females? Station core does it deliver younger or older audience? Cost is it part of a combo buy? What are the implications to add or remove a station from the buy? Duplication are multiple stations delivering the same listener and therefore impacting reach? Time Spent listening (TSL) does this station have a dedicated listener, can t be reached through other stations? Turn Over how high is the turn over on this station, does it require more spots to reach listeners? Radio buys are built one station at a time: Ensure frequency targets are observed Ensure number of spots per week based on station format is adequate (i.e.: CHR format may require 60 spots per week vs. Country format that requires fewer 20 spots per week (more loyal listeners, less turnover/churn in audience) Ranking of station Station reach Factors that are considered when adding stations: Ranking Format consider niche stations which will offer unduplicated reach Station audience does adding the station compliment the other stations i.e.: older / younger, male/female. Does adding the station bring balance to the total audience target or skew? Cost combo rates, deal rates and efficiencies when grouping vendor stations in a market for greater share of $ s can improve efficiencies Added value being offered beyond GRP s (tags, announcer read liners, etc.)

53 Weight Levels Possible Scenarios. The general rule of thumb is a minimum of GRPS per week (50% R/ 3.0 F) occ/wk in non measured markets Retail - typically sales driven, short term Requires high impact and immediate results Launch / Growth e.g. new product High Impact and sustainability Mature / Sustaining Ongoing awareness, always on. Radio Only: GRPs/wk Radio and other media: GRPs/wk Radio Only: GRPs/wk Radio and other media: GRPs/wk Radio Only: GRPs/wk Radio and other media: GRPs/wk 53 Radio Connects September 2018 SUBJECT TO BRAND BUSINESS OBJECTIVES AND COMPETITIVE CLIMATE

54 Weight Levels. Things to keep in mind. GRP weight levels can vary by execution type. Is it a launch? Is it daypart specific? Is it a spot buy vs. GRP buy? Is it a DJ endorsement campaign?. GRP weight can vary by market. Some markets will require more stations to achieve reach levels, or conversely build reach quickly (ie.montreal F) therefore requiring overall higher GRP levels. PPM markets vs. diary markets can have different reach objectives. Frequency guidelines. Typically a minimum of 3 frequency per station for diary and in PPM markets: Helps set the benchmark on when to add stations to a campaign. Note, in some markets this may not be achievable on all stations 54 Radio Connects September 2018

55 Lead times following a critical path. Fast, Cheap or Good Pick 2. Major market top ranked stations can be sold out up to 2 months in advance. Longer lead times will result in better station inventory and better rates. Premium or top ranked stations may invoke minimum unit rates for high demand periods. Specific station requests and short lead times require communication between the client, planning and buying teams. Stations require at minimum 2 to 3 weeks for effective promotional ideation and development. To generate customized and targeted promotions, more lead time is needed. 55 Radio Connects September 2018

56 Cost Implications. The following will impact CPP s and pricing models. Target Group Smaller the demo or more specific the target, the higher the cost. Commercial length Not all lengths are costed the same. Commercial lengths outside of standard :30 second creative typically carry a premium. May vary by station. Lead Times and Timing Closer to airtime and tighter the avails, the higher the cost. High demand or strong retail periods can impact pricing back to school, pre Christmas, long weekends in the summer are all high demand periods. Day part mix Radio is typically bought on a reach plan Monday to Sunday all dayparts. When days or dayparts are excluded or used exclusively, costs will be impacted. Tightened rotations Restricting airings to specific times can impact costs, i.e. 7a-830a vs 5a-10a. Radio remotes Like promotional events, radio remotes have hard costs outside of media costs. May require minimum media spend to have a remote. Specific station selection Higher ranked stations typically cost more, # 1 ranked on Ad1849, vs # 6 ranked on Ad1849. Some formats can cost more for a perceived higher value audience ie Higher % of HHI $100K+ etc. 56 Radio Connects September 2018

57 Creative. Radio is self-regulated. Stations are self-regulated and will determine creative acceptability. Radio stations follow Health Canada guidelines when it comes to regulated advertising products like: Tobacco, Cannabis, Vaping, Pharmaceutical and Children s Advertising. Health Canada has not issued guidelines on marijuana and associated products advertising as of August Stations will refuse creative if they believe it does not align with: Their station brand or values. Their station format or with the station s personality. Listeners sensibilities or is considered offensive to them. There are 3 creative lengths for radio 30 s are the standard. 60 s are rare. :10s (could also be 5 s, 7 s 8 s or 15 s depending on each station). Short format typically used for promotional and sponsorship reminders. Effective when paired with 30 second brand sell. 57 Radio Connects September 2018 WHEN TRAFFICKING RADIO TAGS AND/OR 30 SECOND SCRIPTS (FOR BRAND SELL) LEAD TIME IS ESSENTIAL. RADIO STATIONS REQUIRE TIME TO ENSURE THE TAG IS THE CORRECT LENGTH STATION TALENT NEEDS TIME TO RECORD THE 30 SECOND SPOT AND BUILD IN TIME FOR CLIENT APPROVALS

58 Creative wear out. Don t worry about wear out. Good creative has a long expiration date. 58 Radio Connects September 2018 Source: Westwood One, Cumulus Radio Multi branded pool of media mix modeling data

59 Creative wear out. CREATIVE QUALITY IS THE PRIMARY DRIVER OF BREAK THROUGH, ACCOUNTING FOR 75% OF VARIANCE IN BRAND/MESSAGE RECALL LEVELS Superior creative delivers 3-4x more in ROI. 59 Radio Connects September 2018 Source: Westwood One, Cumulus Radio Multi branded pool of media mix modeling data

60 Cancellations and shifts. Radio is a very flexible medium, however, there are rules of engagement. 2 weeks notice to cancel According to CAB rules, radio stations require at minimum 2 weeks notice to cancel a radio campaign. The stations have the right to refuse if there is no business reason to cancel. Being overbudget is not a reason. Promotions may be noncancellable When promotions are involved, radio stations require 4 weeks lead time or may negotiate a noncancel clause up front. Shift a buy with less than 2 weeks notice Ability to shift may be dependent upon station inventory and demand for the time period Any changes to flight dates can be subject to rate changes. Shifting and then cancelling is not good business practice. 60 Radio Connects September 2018

61 Contact us It s been a pleasure to share this information with you. For much more on how AM/FM radio connects with Canadians, please reach out. Radio Connects 160 Bloor Street East Suite 1005 Toronto Phone: Radio Connects Caroline Gianias President caroline.gianias@radioconnects.ca Lisa Dillon Director of Consumer and Media Insights lisa.dillon@radioconnects.ca Chantal Leblanc Direct of Client Services Radio Connexions, Montreal chantal.leblanc@radioconnects.ca Radio Connects September 2018