There will be significant changes in how radio advertising is bought and sold over the next couple of years especially in the wake of new technologies, which is threatening the traditional radio business.

By offering such services as restaurant recommendations, movie schedules, and other features, satellite radio, digital music players and the Internet are slowly impinging on traditional radio’s iron grip on local advertising.

The iPod and other portable music devices have given consumers the ability to listen to the content they want to hear, and when they want to hear it. Satellite radio services (such as XM Satellite Radio and Sirius Satellite Radio) are offering more channels, many of which are commercial free. Likewise, Bid4Spots, Google Audio, SWMX, and PodZinger have also caught the eye of radio advertisers.

According to the Radio Advertising Bureau, radio revenue growth has been slowing since 2003. But before 2001, the industry logged four consecutive years of double-digit revenue growth.

Radio has to reinvent itself quickly, many analysts say. According to an article in MasterNewMedia.org (Podcasting and the Future of Radio Advertising): The competition coming from new media technologies like P2P file sharing, online music clearinghouses like iTunes, portable MP3 players, and the gigantic podcasting wave provide so much more for the user experience, that for radio intended as a music jukebox this is a loosing battle from the very start.

The future of radio, according to the article, lies in what many advertisers call a “new branding experience” for audible interactive media: Unintrusive, friendly and discrete, the future of radio advertising is all about creating a user experience that mixes unique theme-based content programming with a very selected and limited set of sponsors. This means that to adapt, traditional radio needs to reflect more the type of focused content delivered today.

As streaming radio (also known as Internet radio) evolves, advertisers will also be able to specifically target their ads to individuals that match a defined set of demographic criteria. This will be possible through technologies that are slowly beginning to surface.

For it to grow and evolve, radio and other traditional forms of media must learn to become a participatory and interactive medium.

Thanks to YouTube, whose astonishing surge in popularity has welcomed online videos into the mainstream, small businesses now have a plethora of cost-effective options for online video advertising.

According to a recent report by the Kelsey Group, the emerging medium has reached a local level with an ecosystem beginning to form around the affordable production of video advertising for small businesses. Video production companies, such as Spot Runner and TurnHere, are now producing and distributing video ads at price points that are targeted toward SMEs, offering rates that are significantly lower than those of traditional advertising.

The report also cites concern over finding affordable ad distribution channels. Aside from cable television, another promising option is the Internet Yellow Pages, which has the greatest opportunity in local online video ads according to Kelsey:

The opportunity is greatest for IYPs, given sales assets, existing SME relationships and the growing demand for video advertising in the small-business marketplace where directory publishers hang their hats. Add to this the presence of high-margin, low ad elasticity vertical categories (similar to autos and real estate) such as professional services, and the potential becomes clear.

By embedding a video player in Internet Yellow Pages listings, the level of media and information of a traditional IYP lookup would be greatly enhanced. From a sales channel perspective, it could also be bundled with existing print and online display ad sales.

The report also notes that the vanity factor which has driven major revenues for Yellow Pages publishers is also very much present in online video. Video has the potential for easier integration into a cross-platform product bundle, since it is much easier to comprehend by advertisers (compared to other forms of performance-based marketing such as Pay Per Click).

Though its long-term benefits have yet to be realized, online video has the potential to be an extremely powerful medium, and the next must-have format in local advertising.

In a recent article by the Seattle Times, Microsoft chairman Bill Gates predicted that the advertising business model for traditional media will slowly decline as web-based advertising comes to the fore.

The same article stated that advertisers will spend about $445.5 billion globally in 2007, according to a forecast by ZenithOptimedia. Of that, online is expected to get 7% of the pie compared with newspapers’ 28.3%.

He also predicted that traditional Yellow Pages are doomed as voice-activated Internet searches combined with on-screen interfaces on smart mobile devices get better and proliferate. [Microsoft's] recent acquisition of voice-technology provider TellMe is accelerating the trend.

In bold and biting terms, Gates also added that Yellow Page usage among people below 50 will drop down to zero in the next five years.

Although web-based advertising may influence the profit margins of newspapers, magazines, television, and radio, traditional media is definitely not going away anytime soon, and there is ample time to adjust and take advantage of this transition.

In terms of the demise of Yellow Pages Mr. Gates predictions are not supported by the research facts. Millions of Yellow Pages advertisers, both print and online, can attest to the 14:1 return on investment, a result of the ready to buy consumers the Yellow Pages deliver. And while readership, viewer ship and listener ship has declined in other media the Yellow Pages has seen a growth in usage year after year.

Consumers find the Yellow Pages easy to use with valuable local information about the businesses in their local areas available at their fingertips. Publishers are meeting the needs of their consumers by developing new headings and by creating new formatted directories like the portable mini directory which have become so popular throughout North America.

The Internet Yellow Pages (IYP) is not only growing in use (25% each year according to the Kelsey Group), but it is also the perfect complement to the print editions for extending reach and electronic access. IYP can be seamlessly integrated with its print counterpart to maintain or enhance impact. In the future, the print and online versions of the Yellow Pages will continue to thrive simultaneously.

Sorry Mr. Gates but the hard copy is not going out of style any time soon. I guess as humans we just need to connect with something other than an electronic device every now and then.

PCM International was recently honored at the 2006 Industry Excellence Awards of Yellow Pages Association, which was held on May 1 at the Mandalay Bay Resort & Casino in Las Vegas. Hosted by Los Angeles-based comedian Tony Vicich, the awards gala coincided with YPA’s Annual Conference and Exhibition: Masters of Transformation. PCM was a participant at the conference that hosted 600 delegates representing 250 publishers and certified marketing representatives from around the world. Among the prestigious recipients were Yellow Pages publishers, marketers, and associated companies that comprise the $26 billion annual worldwide and $14 billion U.S. directory advertising industry. According to YPA president Neg Norton, The companies honored with a YPA Industry Excellence Award set the standard for Yellow Pages best practices in serving advertisers and consumers. Leaders within the industry continue to innovate with creative programs and products that keep our industry healthy and vital in a demanding marketplace.” The bronze award that PCM received was for sales innovation, for its innovative client-trade-show marketing strategy, Bringing the Yellow Pages Brand to Life.” Aside from Montreal’s Yellow Pages Group, PCM International was the only other all Canadian-owned award winner in the competition. PCM was competing with US-based industry giants such as TMP Directional Advertising, which has $500 million in annual billings. It was an honor to receive this recognition, considering the very tough competition we faced. But then it is our job as marketers to stand out from the crowd isn’t is?

The term viral marketing refers to marketing techniques that use pre-existing social networks to increase brand awareness. It can often be word-of-mouth, delivered and enhanced online, using the network effect of the Internet to reach a large number of people rapidly.

It also refers to Internet-based stealth marketing campaigns, including the use of blogs, amateur web sites, and other forms of astroturfing, designed to create word of mouth for a new product or service.

The aim of viral marketers is to create a buzz about a certain product, so that the idea spreads widely. If it’s effective, viral marketing may require very little effort, as the recipients of the message become the primary agents who spread it to other people. But the weakest aspect of viral marketing is that its impact is quite difficult to measure and control.

An article in Marketing magazine, Catching a virus, which discusses the necessary tools marketers need to effectively measure viral marketing campaigns, observes that the most attractive element of viral marketing is that it can transform the consumer into an endorser, turning him/her into a persuasive influencer among peers.

Due to the fact that the source of the marketing message originates from consumers themselves, it automatically becomes a credible endorsement, since it’s a recommendation which fellow consumers are more willing to believe. The consumer, after all, never lies.
But as viral marketing grows, its impact also needs to be carefully measured. According to the same article, the biggest challenge in measuring viral marketing is the ability to exclude spam blogs.

The authors, Lesli Fairweather and Jason Ten-Pow, stress that the most effective methods for measuring viral marketing should include the following:

24-hour real time access offering the ability to track and trend
Trend analysis over various increments of time
Sentiment measurements and analysis
Demographic and geographic analysis
The ability to develop and customize detailed report

Such a methodology will allow marketers to survey the expanding online community and to listen to the uncompromised sentiments of consumers. Another advantage is that, aside from gaining honest comments, it also improves the quality of research, adding a more perceptive aspect to trend and market analysis.