Radio stations place more focus on proprietary platforms but remain active sponsors of third-party events at the local level.
There are hardly more mutually beneficial relationships than ties between radio stations and events.
Events have long relied on radio stations to drive ticket sales and extend sponsor reach, while radio stations have relied on events to access tickets, on-site booths and other inventory that can be used to create marketing packages that extend an advertiser’s reach beyond a 30-second spot.
But that paradigm is beginning to change.
In a major shift in strategy, two of the largest U.S. radio station ownership groups are placing more focus on proprietary events.
Clear Channel Media and Entertainment has led the way with the iHeartRadio Music Festival, a three-year-old event held annually at the MGM Grand hotel in Las Vegas. The company last year signed naming rights to theaters in Los Angeles and New York City on behalf of the online radio station and this year will further expand its portfolio with the inaugural iHeartRadio Country Festival on March 29 in Austin, Texas.
In addition, Clear Channel last year expanded its long-running Jingle Ball franchise from an annual concert at Madison Square Garden in New York City to a 12-city tour.
Meanwhile, CBS Radio in November hired Amy Stevens in the newly-created post of senior vice president of strategic events and partnerships. Her charge: develop concerts and live programs that highlight the company’s content offerings and provide opportunities for sponsor integration.
In one of her first tasks, Stevens next month will oversee a Red Hot Chili Peppers concert at the Barclays Center in Newark, N.J. CBS Radio will produce the Feb. 1 event—dubbed “WFAN’s Big Hello to Brooklyn”—as part of an expanded partnership with the venue that includes coverage of NBA Brooklyn Nets games and the production of concerts and events marketed on stations in 27 markets.
“We have relationships with artists, and more importantly, relationships with listeners, and we can work together to bring cool experiences to listeners and sponsors,” said Jennifer Morelli, vice president of integrated marketing with CBS Radio.
The Red Hot Chili Peppers will follow up the concert on Feb. 2 at the Super Bowl halftime show at MetLife Stadium in East Rutherford, N.J.
Radio stations’ interest in proprietary events is driven by one primary objective: creating 360-degree marketing packages for advertisers.
“Every program today has to be integrated. Advertisers want to be where the consumer is, whether they’re online, driving their car or in the community,” said Susan Novicki, president of Morrison and Abraham, a media sales consultancy.
With more advertisers looking for integrated packages, radio stations are doubling down on proprietary events to create more inventory and increase revenue, she said.
“Radio stations control every piece of the sale with proprietary events. They’re not locked out of any categories and business.”
THE MOST ACTIVE RADIO STATION SPONSORS
Figures represent the percentage of properties with a sponsor in the radio station category reporting sponsorship from each company.
National Reach, Local Activation
Clear Channel uses the iHeartRadio Music Festival to offer advertisers a national marketing platform that can be activated locally.
The festival represents a major shift in how Clear Channel uses event marketing. Prior to the festival’s launch in 2011 the company primarily sponsored events on behalf of local stations and radio station clusters.
“It used to be that local stations sold sponsorship with their own profit and loss statements. We realized we can wire them up to make national events feel local. That’s our new approach,” said Greg Glenday, president of Clear Channel Connections, an in-house department charged with creating multi-platform marketing solutions for national advertisers.
Clear Channel localizes national events through promotions ranging from ticket sweeps to in-store events.
For example, Macy’s, Inc. leverages the iHeartRadio Music Festival with the Macy’s iHeartRadio Rising Stars national talent search. Clear Channel radio listeners, iHeartRadio fans and Macy’s shoppers last year cast more than six million votes for their favorite up-and-coming band with the top five finalists performing in-store performances at local Macy’s outlets.
The winning band also performed at the iHeartRadio Music Festival and Macy’s Passport presents Glamorama events.
“It’s a national program with local extensions,” said Glenday, noting that local stations create non-traditional revenue programs around the in-store events.
Other sponsors of the 2013 iHeartRadio Music Festival included AT&T Inc., Pepsi, State Farm and Unilever’s Fruttare ice cream bar.
Clear Channel created the iHeartRadio Music Festival as a platform to promote its eponymous online radio station. The festival was spearheaded by Bob Pittman, Clear Channel’s chairman and CEO who joined the company in 2010.
“The first festival was literally a launch party for the iHeartRadio app. It went from a marketing vehicle to a platform for sponsorship.”
Clear Channel programs the music festival with A-list artists across pop, rap and other musical genres to promote the diversity of iHeartRadio programming and gain an activation platform across multiple radio station formats.
National sponsors of the iHeartRadio Country Festival include NBC, State Farm and Jim Beam.
Similar to the iHeartRadio music festivals, Clear Channel uses Jingle Ball to provide opportunities for national and local advertisers.
For example, JPMorgan Chase & Co.’s Chase brand served as the national sponsor of the inaugural Jingle Ball tour. The sponsorship afforded ticket presale opportunities, on-air promotion, digital contests and other benefits.
Local stations sold backstage access and other inventory to local advertisers, said Glenday, noting that the stations were locked out from the banking category and focused on beverage, electronics, pet food and other categories.
Clear Channel may reduce the number of Jingle Ball stops in 2014, he said.
“We’re evolving. It may be fewer markets, but we’ll make them better. We’re evaluating market response and ratings on pop stations.”
CBS Radio also activates national events with local extensions. For example, the company last year leveraged a concert that featured Robin Thicke, Jason Derulo and Sammy Adams at The Cosmopolitan Hotel in Las Vegas with a national ticket sweeps that dangled trips to the show.
CBS Radio cosponsored the Aug. 17 event on behalf of Radio.com. CBS streamed the concert on the online radio station and Youtube.com.
“It was a multi-market, multi-format platform,” said Morelli, noting that 200 consumers from around the country won tickets to the event.
WHERE RADIO STATIONS SPEND MONEY (THIRD-PARTY EVENTS)
Still Committed To Third-Party Events
While CBS Radio and Clear Channel are doubling down on proprietary events, both companies say they are not backing away from third party events.
Clear Channel earlier this month announced a partnership with SFX Entertainment, the owner of electronic dance music festivals and other EDM platforms.
The partnership provides an authentic platform to engage listeners and sponsors, said Glenday. “We prefer to create events in-house, but if something makes sense for our listeners, we’re thrilled to do it.”
Clear Channel will leverage the tie with a DJ talent search. The company will host the search at iHeartRadio Theaters and promote the search on air.
Clear Channel also gains the right to sell-in advertisers, added Glenday, noting that the relationship is new and specific categories have yet to be ironed out.
Radio stations remain active sponsors of third-party events at the local level.
For example, Clear Channel’s five-station Dallas cluster compliments Edgefest and other proprietary concerts with a tie to the Texas State Fair. The cluster gains the right to sell one category—among other benefits—-in exchange for on-air promotion.
“It’s a win-win. We receive an affiliation with a high-traffic mass market event while the fair gains a new sponsor and promotion on the number one station in the market,” said Kevin Maus, director of event marketing for Clear Channel Dallas.
Other radio stations focus almost exclusively on third-party events.
For example, Emmis Marketing Group Austin sponsors the Austin City Limits Music Festival, South by Southwest and other large local events.
“We’ve been able to partner with the biggest events and carve out opportunities for station marketing and selling in sponsors. There is minimal financial risk on the front end, and we can reap the same benefits as we would be creating our own events,” said Kevin Brelsford, director of Emmis Marketing Group Austin.
Like other radio stations, the cluster evaluates opportunities based on the quality of categories it can secure for sales representation. Desirable categories include the auto, malt beverage, spirits, insurance and hospital categories.
“Some events offer 20 categories, but many of those are fringe categories that are hard to work with. A half dozen key categories offer enough revenue potential for us.”
In addition to selling open categories, the Emmis cluster looks to generate revenue from existing sponsors by selling media and other inventory as an activation platform. The cluster helped Bud Light activate its sponsorship of the ACL music festival through a package that included mention during live backstage radio broadcasts and promotions at bars and restaurants around Austin.
“Bud Light can use the ACL name, and we helped the brand exploit that right.”