An Interview with David St Laurent, CEO of Western Media Group
The last time we talked, you were starting to lean into podcasting and streaming audio. That seems to have worked out well.
Yes. Podcasting has been growing very quickly. And along with it, streaming audio. The entire streaming media segment continues to deliver solid results for advertisers. It has become somewhat of a cornerstone of digital marketing strategy.
We certainly wouldn’t have been as far along in the podcast space if we had not already been well positioned with audio.
If an advertiser is buying radio, then by extension, audio should definitely be part of that plan. Even with radio continuing to be strong in smaller markets, streaming audio has done a great job of capturing a significant share of ear. And it’s likely to grow. This has provided the perfect platform for us to launch into the podcast segment.
According to the recently released Canadian Podcast Listener Report, more than 17% of the population are listening to podcasts every week. That’s up from zero just a few years ago. And almost sixty percent of the entire population streams audio each month.
If you’re an advertiser, podcasting is where you want to be.
What is cool about the audio renaissance is that while streaming audio and podcasting have taken share from terrestrial radio, the overall combined time spent listening to audio has grown. Depending on the audience segment, we are seeing a total of 25-26 hours weekly listening to terrestrial radio, streaming audio and podcasting.
I should point out, though, what is very interesting is that the smaller community-based radio stations in markets like Fort St John, Whistler, Mackenzie, Peace River and Campbell River continue to thrive because they provide local and relevant community formats.
Local news never gets old. If it’s not on Twitter it’ll be on your local radio station.
What changes are you seeing in the programmatic space?
Originally there was a time when programmatic was viewed as a way to fill remnant space. That’s no longer the case.
Programmatic is the digital industry now. The data and capabilities are light years ahead of what was available when we entered the space in 2011. Marc and his team certainly aren’t just chasing inexpensive inventory and they never bid on an ad impression without expecting it to convert. They have the data and machine learning available to convert ad spend into conversions.
With podcasting and streaming audio experiencing rapid growth, what else has you excited?
Media buyers are still seeking digital audio, so we remain focused on podcast advertising and streaming audio. Audio has become the new tactic of digital marketing strategy. But at the same time we are building out a Connected Television offering.
Like streaming audio, Connected TV is growing leaps and bounds. It is enabling advertisers to re-discover a lost audience. It’s such a natural complement to our traditional broadcast portfolio which has really ticked up beyond expectations.
What do you think explains the resurgence of traditional media?
There’s always a period where media buyers want to put a new audience product through its paces. They want to test it to see what it can do under a variety of conditions. We’re in a phase now where half the people are watching the internet and half the people are watching TV.
But there’s still the recognition that when you see a brand on TV you think, ‘hmm they must be good.’ This recognition is what many successful “digitally native” brands rely on. And it’s why these so-called “direct-to-client” media plans include heavy television to drive trial even though they are marketing to millennials.
So traditional broadcast media is still a very successful tactic for brands that have mass appeal. We are finding that the independent media properties – the ones owned and operated in the communities they serve – are having great success. Not only with national brands looking for local audiences but local brands that want to deepen their local ties.
What’s the next big thing for Western Media Group? What’s showing up in your crystal ball?
We always have a new category under development. But now there’s a distinct sense that we’ve seen this movie before but this time it’s got a different cast.
There are strong similarities between the development of connected television and streaming audio.
And it makes sense. Just as radio buyers now regularly buy streaming audio as part of their mix, if an advertiser is buying television or digital video they should also consider connected television.
The problem is you can’t buy connected TV at sufficient scale in Canada right now. This will correct itself over time. So we’re keeping a close eye on companies such as Telaria as they build out their technology offering.
So given the number of opportunities it is hard to know which one will ultimately dominate. But these days, the topic that everyone still wants to talk about is podcasting.
Let’s talk more about that. What are some of the dynamics of streaming audio and podcast advertising?
We’ve worked hard to grow our portfolio of streaming audio inventory. We have made good progress and have several announcements in the pipeline but there is still much to do.
A lot of the work left is educating the advertisers about the inventory. Most everyone knows Spotify, but there is so much more audience available.
As I mentioned earlier, audio is – or should be – part of every radio buy. And advertisers are now accepting that podcasts are an available channel to form new partnerships. For us, this has created a lot of energy around new platforms, through both dynamic audio insertion and premium sales agreements.
Big picture, the real story is that people are consuming more media than ever before. They are making extra time for audio streamers such as Spotify, SoundCloud, AccuRadio, and Google Play.
On top of the streaming you have podcasts. The last number I heard is that there are over 700,000 different podcasts available. That’s a lot of choice! Through our audio streaming partners and friends at The Podcast Exchange, we are working hard to bundle solutions for advertisers wishing to enter the space.
There’s a lot of cross pollination going on, but we do what it takes to get between the ears of consumers listening to streaming audio.
Further contributing to the growth in audio are smart speakers. These devices have really helped spark the market.
That’s why streaming audio and podcasts have become our fastest growing services. Both bring the advantages you get with digital media: better targeting and the ability to measure every user who gets an ad impression. Price efficiencies and a one-to-one interface with the consumer that has a great chance at growing into a relationship. That’s what advertisers want. A relationship with their target audience.
How are advertisers embracing these new media products – streaming audio and podcasts in particular?
In the last year we’ve seen a dramatic shift of budget into these categories.
As a rule of thumb, we’re seeing advertisers redirect ten to fifteen percent of their radio budget into streaming audio.
Podcasts though, require a separate strategy all together. Podcasts are the current day version of what the glossy magazine used to be: intelligent, long-form reads on interesting topics. Those magazines that used to be found on the living room coffee table. They still exist, just in a new format and resting between our ears. So just as magazine advertising had its own media strategy, so should podcasting.
How are you squaring the circle between radio and audio?
Ultimately I think that audio and podcasts will help in the resurgence of radio. There is nothing like community radio to connect with a local community.
Years ago, we made a strategic decision to exclusively focus on smaller community-oriented radio only. In the vast majority of instances it makes sense to utilize community radio as a primary-strategy.
Take Whistler, for example. Or Fort St John. Or even Campbell River or Peace River. In these markets it makes sense to drive messaging with locally-owned community radio.
These are where radio stations are still hiring and adding to their employee counts. These are the stations that are earning a much greater share of the advertising dollar in their market.
In larger markets, the situation is rather different. Radio needs help. It’s no secret that there can be a huge amount of wasted coverage in a large market.
For a single outlet retailer, radio just doesn’t make sense. You’re paying for coverage in places where people will never visit your store or restaurant.
This is what makes smaller market community radio so strong: because it delivers the entire market for an advertiser.
This is why in large markets advertisers have woken up to the fact they can clone the effectiveness of radio by using digital audio. That’s why you’re seeing more local retailers include streaming audio with geographic restrictions to their campaigns.
Radio in the larger markets does not have the same advantage, so it needs the precise targeting that digital audio and digital display ads provide. Well defined geo-targeting, strict demographic definitions and a layer of lifestyle or interest targeting work well.
So that’s the flip side of traditional radio. What are you seeing as far as podcasts go? How are agencies approaching podcasts?
The podcast industry started off as a Direct response solution, but has now grown in to a branding powerhouse in its own right.
That said, advertisers can run a real risk of failure if they treat podcast like streaming audio or radio. Podcasting is its own medium.
While broadcast radio is intended to speak to thousands, podcasting is intended to speak to one person at a time. It’s personal.
Quite frankly, I cringe when advertisers simply re-purpose a radio spot to run on a podcast. To put it mildly, listeners do not receive this type of creative well. And what is interesting is that the typical podcast listener actually appreciates and receives commercial sponsor messaging well. There’s research to support this. Listeners understand that someone needs to pay the bills.
We get a lot of calls for one-off and standalone podcast strategies. In these cases we recommend creating custom creative. You have to remember that the majority of podcasts are heard through headphones. The entire relationship between the host and listener is unique and already well defined.
The listener has elected to listen to the show, so there are just two people involved: the host of the podcast and the listener. So why on earth would an advertiser design creative to shout out to thousands, when instead they could have a one on one conversation with an engaged consumer?
The other thing that is interesting is that the average podcast listener is also a very desirable consumer. I made an earlier comparison between glossy magazines and podcasts. We can take this one step further and connect long-form editorial content that historically might be found in The Financial Post or The New York Times. Yet podcast listeners, for the most part, do not buy newspapers.
But they will consume the same content through a podcast even though they are younger, more educated, and tend to be early adapters with above average household income.
What is your next product roll-out?
Connected television. Similar to our audio platforms, connected television is an extension of linear television. It will fit nicely into our existing portfolio of broadcast media solutions.
We’re excited about how connected television can help advertisers reach cord-cutters and digitally native consumers, including Gen Z.
I expect we will see rapid growth in our ability to deliver audiences at scale and the related revenue over the next couple of years.
Any other observations?
Sure. First, there has been a shift in the advertiser and media buying mindset. As a media supplier we’ve evolved from selling programming to instead finding and securing audiences. This makes a lot more sense when you consider the advances in data, analytics and personalized delivery.
What does that mean?
Advertisers realize that the power is in the hands of the audience.
Advertisers should not enter the planning process of an ad campaign with the intention of driving media costs down. Most realize there is much more to be gained in driving top line revenue than there is from driving the cost of media down.