Brad Kelly says he’s on your side. Kelly is a former radio guy with a very important position at Nielsen, the company that controls your currency. And he’s a second-generation radio brat. As a little boy, he spent his days at remotes, handing out T-shirts and Frisbees while his lifelong broadcaster dad, Don Kelly, skipped around the country looking for his next big break. Don Kelly started on the air, went into programming, sales, sales management, and general management before putting together a small group of stations.
Brad went to seven different elementary schools as he grew up in the world of radio, which he says was the center of his family’s lives. “I learned this business simply by being there all the time, for my whole life, the formative years,” he says. “The one place we were more than any other.” He also soon became aware of the impact the Arbitron ratings could have on a radio station. “My dad’s income and his mood were affected by the numbers, by how the book looked from quarter to quarter. We knew the day the book came out whether we were eating steak or ramen noodles for the next couple of months.”
In college Kelly took an internship with Arbitron in New York. He says, “I under-stood the difference between a ratings share and how it all fit together, how data was used for programming vs. sales. Dad was not the biggest fan of Arbitron, so that decision met with a mixed reaction. One thing he did like was his rep at the time, Pierre Bouvard. Every time Pierre came to visit the station, we made money. So he encouraged that internship.”
When Kelly graduated, he was offered an entry-level job with Arbitron as a client service rep. He moved up to account manager, then to corporate sales, where he worked with CBS Radio and Infinity, and later oversaw group sales to work with the top 50 accounts, with nine employees reporting to him. At that point the PPM was becoming the currency for major markets, and Kelly was right in the middle of it, taking over all of radio sales — 80 percent of Arbitron’s revenue. Then Nielsen came along. Kelly says Nielsen kept his team intact, and it still is, three years later.
“This is a group of people that are creative and motivated and have a uniquely scrappy way about them,” he says. “Right out of the gate, the Nielsen management and executives realized this was a different breed of people, a different breed of sales team, that they have acquired — they have acquired dozens of companies, and they are saying this group of folks is unique. They were very welcoming and appreciative.
“There are 18 separate business units within the Nielsen U.S. media group. In our inaugural year as a Nielsen company, in 2014, my group was the top sales unit within US media. It’s one thing to do it once; it is another thing to do it again: A year later, in 2015, the audio team again took honors as the top sales unit within US media. I credit that to the fact that radio has always had to do it a little tighter, cleaner, and more creative to try to get its fair share. My team has adopted the strategy and tactics from the industry we come from and the industry we serve, and obviously it is extraordinarily effective.”
Connoisseur Media CEO Jeff Warshaw says Kelly is committed to bringing radio measurement to the next level. “His willingness to engage radio operators is refreshing,” he says. “I look forward to positive change during his tenure.”
Let’s find out exactly where the radio ratings game is headed with Brad Kelly as your point man, the person who controls the currency that generates revenue from your ratings.
Radio Ink: What opportunities has Nielsen’s 2013 purchase of Arbitron brought to radio?
Kelly: Nielsen is shockingly big. Much bigger than I ever realized. Forty-five thousand employees, $6 billion in revenue, 105 countries. Attending a management meeting is like being at the UN General Assembly. Within the U.S. media group (a $2 billion division) I’ve come to view my role as being similar to that of a U.S. congressman or senator. My job is to represent my constituency (radio), to make sure they are getting their fair share of Nielsen’s energy, resources, attention, innovation, and focus.
If you were to ask my boss, Lynda Clarizio, president of U.S. media, she’ll tell you that I am a vocal and aggressive advocate for my business unit and my radio clients. And the company is being very responsive, as evidenced by the significant investments they’re making in the radio sector — investments that are helping to move the industry forward.
For their part, since the acquisition Nielsen has really stepped up its game and shown a tangible commitment to the radio industry, mainly in the form of several huge financial investments. The initial +7 percent PPM sample increase and, now, this most recently announced +10 percent PPM increase are the most obvious evidence. These sample increases are an acknowledgment that Nielsen recognizes how important the sample size issue is to our clients and is responding directly.
Nielsen’s recent M&A acquisitions of Gracenote and Rhiza are going to have positive implications for radio as well. Gracenote, and our new collaboration with NextRadio, bring with them the promise of “return-path-data-type” big data solutions to radio. And the Rhiza software is a new “data visualization” sales platform that will enable clients to easily paint a picture (maps and attractive, easy-to-read graphics) showing the intersection of radio audiences and a consumer’s shopping/purchasing behaviors. Drop-dead simple, easy to use, visually attractive, high-impact data insights. The applications for the automotive category alone are a game-changer.
Radio Ink: How would you describe your relationship with radio stations today?
Kelly: Very good. I have a level of empathy that you can’t fake — a level of appreciation and understanding for what it means, how it affects the livelihood of these folks, what it means to have a bad book, and the frustration that goes along with things like sample placement.
The ability to understand at a gut level these issues, these concerns, these frustrations, and then bring that back and help to find answers to those concerns is appreciated by our customers — which is part of the reason Nielsen decided to take a chance and put a radio guy in charge of the radio business unit.
It has not been without challenges. We certainly had a few bumps along the way. The relationships and experience, and the background and history, get me more credibility than I would have had without that background. I don’t want this to be “Brad Kelly’s ride to the top” — I am the first to say my success has much more to do with the people I have been fortunate enough to surround myself with. I cannot take credit for their work, but I do take a lot of pride in it. I have a group of people that are really extraordinary, and a more talented group of sales and client service people you won’t find anywhere.
Now, a year into this role as the managing director of the audio unit, it’s been an honor and a privilege. I don’t take it for granted, and I work very hard every day to represent my company, but more important, to do right by my clients and the industry we serve. I desperately want to make them proud.
Radio Ink: Are you happy with where the sample size is today?
Kelly: Nielsen has committed to an additional 10 percent sample increase in PPM markets that will begin to roll out in June of this year and will continue over 18 months. All markets will receive that 10 percent bump, and it will be proportionate, placed across all demographics. This was my “honeymoon ask” as the new managing director. Sample size has been and continues to be a top industry priority, and it’s for a good reason. Audiences are fragmenting, and the data is being scrutinized at increasingly discrete levels. This sample increase helps with stability and data-mining granularity.
This was no small ask. It was an extraordinary investment. It’s not a one-and-done proposition, where we write the check and move on. I’ve committed the company for the foreseeable future to continue to fund and underwrite this sample increase. This is the second PPM sample increase that Nielsen has funded, the third since PPM was launched, so, collectively, with the initial 12 percent bump, the 7 percent bump after the Arbitron acquisition, and now this additional 10 percent, we are north of 30 percent additional sample since PPM was debuted. By the time this newest rollout is done, we will have 80,000 PPM panelists walking around the country wearing the meters. So it’s a big deal.
Radio Ink: What is the right number? Is there a goal number? Yes, it comes with a cost, but in a perfect world, what would every market have?
Kelly: I don’t think there is an answer to that. It’s an economic equation. That curve of reliability vs. cost, and you’re trying to find the optimal point on that curve where you have the maximum reliability at a cost that makes sense for everybody.
Is more sample better? Sure. Would it be great to double the sample, triple it? Sure. Is anybody going to pay for that? Of course not. We realize the solution is not these incremental sample bumps, although they certainly help. In the end, what we believe in is the combination of high-quality representable projectable samples with an overlay of big data, which we are also working on.
Between our newly announced relationship with NextRadio and our $560 million acquisition of Gracenote, with its 100 million car infotainment systems, we believe that combination can be extraordinarily powerful. What that gives you is what amounts to settop-box-type data for radio. When you get into sample sizes in the millions, that makes a difference.
Now, big data by itself is not the answer, and the folks at GraceNote will be the first to tell you that. I met with them, and they popped up a dashboard. We were looking at a near-real-time drive-data feed from 1.5 million car infotainment systems, which was telling me the top played song in the last 15 minutes was the new Adele song, with 4,000 spins.
I said, “This is amazing,” and they said, “Yes, but take it for what it is.” It’s coming from higher-end vehicles, from newer vehicles. It’s a skewed look, so you can’t project it out and say it represents the population. However, when you start getting into tens of millions of data points, you start to blend that with a representative projectable panel like what we have now — and we work hard on the PPM side — the two collectively will give us the smoothing and the granularity the industry seeks.
Radio Ink: Do you have any issues with AM stations? A PD told us he believes that his older listeners do not want to carry a PPM around.
Kelly: The data doesn’t support that. PPM carry by demographic is solid, particularly in the 55-plus, 65-plus age group. They’re not doing us a favor — we’re paying them to do it. A lot of folks appreciate the opportunity to have their opinion count in the process.
The younger demographics are a little harder. My daughter is a great example — the 18-year-olds. It’s hard to get her to do anything. It doesn’t really matter how much you beg. That situation is improving and getting closer to where we need it to be for those tougher younger ethnic demos.
Radio Ink: What’s most difficult about getting PPM users?
Kelly: The heart and soul of what constitutes quality research, a representative sample. This is the thing we take extremely seriously, and it’s arguably the thing we do best: representation — making sure we have a representative view of the marketplace demographically, ethnically, geographically. It’s difficult, and hard work, to recruit and retain a representative panel.
Anybody can do research. You can go to a shopping mall with your clipboard and do incidental studies. You can convince 18-34-year-olds to answer a handful of questions or, the telephone methodology, you can keep calling phone numbers until you fill your quota and you have enough in the 18-34-year-old in-tabs.
That’s great if you are doing a focus group or a custom research project, but the problem is, from a currency standpoint, that’s not good market research. You can’t project the results to the population and say they are representative. Nielsen, on the other hand, employs the best methods research in the world, from selection to design to implementation.
There aren’t a whole lot of companies that use the approaches Nielsen uses, and the reason is because it’s expensive. It’s also a fact that there are not a lot of companies out there that produce estimates that can be called currency-grade that are accepted by both the buy and sell sides and are used to transact business.
Using the approach we use, random probability sample and stratified sample, it’s never going to be spot-on perfect, where you have exact perfect representation by demo or by ethnicity, but we’re constantly working toward that goal.
This is the data that advertisers trust to place billions of dollars of radio advertising. We spend a lot of work and energy to make sure we have those tough-to-reach demos. In the meantime, what this all builds to is, we get a sample that is projectable and worthy of being called the gold standard.
Radio Ink: What is Nielsen doing to improve the diary system?
Kelly: On the diary side of the Nielsen Audio business, that service continues to evolve as well. Cell phone sampling has doubled in the last year, and we are working on an e-diary option for respondents, which will help with representation among younger demos.
Additionally (less outwardly obvious but arguably more important), Nielsen is actively integrating your radio audience data (both PPM and diary) into world-class data analytic platforms like Marketing Mix Models and the Nielsen Marketing Cloud. This will fundamentally change the way major brands regard radio. Mark my words: The implications for radio are seismic.
Radio Ink: Do you see a world where radio is eventually continuously measured like other media?
Kelly: I do. An approach that I am personally advocating is the idea of taking all markets to continuous measurement and monthly data delivery. Not just the PPM markets, but all diary markets as well. So having diary-based market research in the field 12 months out of the year, and each month we would deliver a new data set.
The question is, what would we be delivering? I am not suggesting a single month’s worth of audience data. That sample would be too small and not particularly usable or reliable. But rather, in the smallest markets, the currency ratings would be a 12-month rolling average. So each month a new data set comes out; you pick up a new fresh month and you drop off the 13th month. And a month later you do the same thing, and the cycle is continuous.
In the slightly larger diary markets, it would be the same basic idea, with monthly measurement and delivery, except with these markets it would be delivered as a six-month rolling average. A tighter snapshot. In the largest diary markets — that’s roughly markets 51-110 — the currency ratings data would essentially be what Arbitrends is now, a three-month rolling average. You pick up the new month of fresh data and you drop off the fourth month.
Now, taken collectively, what that gives you is continuous measurement in all markets. But more importantly, it will give you uniform monthly data delivery across all radio markets. Fresher data and greater stability are huge benefits to this approach. But the real key to this whole idea, and the reason I am pursuing it, is that the diary-measured markets will then sync up with the delivery cadence of the PPM.
Why would we want to do that? If the industry adopts it, now all of a sudden all radio data, not just PPM data, but nationally, all radio data will feed more seamlessly into the Marketing Mix Models. These ROI analysis models are so critically important to the big CPG brands and major advertisers; they’re telling us that radio audience data the way it is now doesn’t flow through their models very well. They say running 6-month-old data is like trying to drive a car by looking in the rear view mirror.
We need a more frequent cadence of radio audience delivery, not in just 48 markets, but across the country in all markets. It’s something I feel strongly about that’s starting to get real attention at Nielsen. It’s a forward-looking industry-level initiative that occupies my time now. We are a ways from having all the details ironed out, but I believe there is a big opportunity here for the radio industry.
Radio Ink: Give us an update on online ratings, and tell us why it isn’t being used yet.
Kelly: Let me first offer up some background. SDK, which stands for “software development kit,” is a piece of code that rides on top of apps and players. When a user fires up an app to stream digital audio, what’s happening is that SDK pings back to Nielsen — it fires and says a session has started. We capture that session and the station being streamed, and the duration and amount of time they’re spending with that station.
We then use a variety of third parties to put demographics against that individual. We then calibrate the data to PPM data, and then we have census-level information. This is not a sample or panel, this is census-level information for everyone who is streaming for all players and apps that have the SDK enabled.
We have been working very hard for a couple of years on this. We have 7,500 SDKs installed, which represents about 2,500 radio stations and radio streams. We hit the pause button on this one back in late 2016. Part of the reason is our customers said, “We’re laying data up against the other service that’s out there, and there is a differential delta.” They were saying that the data from Nielsen from the SDK is, in some cases, lower than the other service, and want explanations as to why.
So we took a step back and started looking at alternate sources to measure streaming, other methodologies, other companies to partner with. What we’ve come back with is that the SDK is the right solution. We are further emboldened by the fact that this same technology is in use right now and has been MRC-accredited on the TV side of the business.
There are some reasons for the delta. We’ve employed restrictive crediting rules, and we started asking ourselves if we are being too restrictive with these crediting rules. If the other service out there is MRC-accredited and their crediting rules are looser, then maybe these are areas we should be looking at. That’s what we’re doing now.
We have hit the un-pause button on SDK, so we’re committed to that as the data-collection mechanism for streaming. The vision is a bit different from what we had originally envisioned. This is not what we had originally suggested would be a syndicated service, meaning full-market coverage, just like we do in our standard local markets. This is not something we can force on the industry. It has become an opt-in service.
There is engineering work that needs to be done to get the SDK embedded to allow the data to flow through. So for broadcasters that wish to participate and opt in, we can and will produce digital audio numbers for them.
Radio Ink: How will the numbers look on a sheet of paper so salespeople can present them to an advertiser?
Kelly: With regard to an integrated number, for folks that opt in and take the SDK, there are two different ad load models. If you simulcast 100 percent of your commercials, your stream is a mirror image of your over the air. That situation qualifies for what we call total line reporting. In that case we will take the stream and combine it with your over-the-air numbers, so you can present it as a single number.
For stations that elect the ad-insertion model, we’ll produce two numbers, a number for over the air and below that, on a TapScan report, a number for your stream. Then we will further take the step of showing the total combined audience for the two.
That’s slightly different. Total line reporting is a single-line-reported number that flows through the buying system. Total audience comes with a footnote and caveat that these numbers, although we’re showing them independently, are additive. The only way to reach this combined total is to have a mirrored ad load on both of these. For folks that opt out, they simply would not have a streaming number associated with the station.
Radio Ink: So the reason there are two options is that you really can’t present an advertiser a total line number if a station has different ads playing, since their ad might not be played on one of the listening options?
Kelly: Yes, that is it. It’s truth in labeling. They break for commercials and there’s the potential for having different loads on these different platforms, so they should be reported independently. We wanted to give the broadcasters the ability to show the combined number: Here’s the potential delivery between the two if we run your spots on both of these platforms, but that is not a guarantee in a non-simulcast situation.
Radio Ink: When will these numbers finally be in use?
Kelly: We’re generating some preview data for stations jumping back into the pool with us again. We want to make sure everybody who wants to participate has got the engineering tightened up and is feeling good about it. We will produce preview data this summer.
I don’t want to commit to the definite “go live” launch button, but we’re looking at an October time frame, end of the year. It is subject to the marketplace and the adoption rate; we will move at the speed at which the industry wants to move.
Radio Ink: Has there been a decision on whether companies like Pandora and Spotify will be included?
Kelly: We would be happy to include them, and I think they would tell you that they would be thrilled to be included. The tricky part is their desire to show up in the New York or Los Angeles local market report with an average quarter hour stacked up against Power or Hot 97.
We believe at Nielsen that it’s fundamentally different; pureplay digital streams are fundamentally different and require different metrics associated with them. Average quarter hour is uniquely broadcast. Digital is about impressions, and because you can mathematically back into an “average quarter hour” number for these digital pureplays does not mean it’s the right way to evaluate them.
We would be happy to produce the number using the SDK on the digital side with impressions. I think it’s their desire to be measured more akin to broadcast, which is not a conversation we are entertaining currently.
Radio Ink: What’s the update on headphone listening?
Kelly: Short answer is that we know this is a hot issue for the industry, but the SDK by and large addresses that issue. Most headphone listening is occurring using digital stations via mobile devices, via tablets, laptops. The SDK is census-level measurement for all of those streams. It’s not dependent upon the headphone adapter running through the PPM, which is the hot issue.
Between that and our new association with NextRadio, we’ve got a good line of sight. It will work not just with the corded earbuds, but SDK will capture that listening for Bluetooth, Sonos Wireless — we believe we have a solid answer for that solution
Radio Ink: Can you give us a technology update on products more like the FitBit?
Kelly: Yes, let’s talk about wearables. On my wrist, I’m wearing a PPM wearable. This is the next generation of PPM. We are in a testing phase with it right now. The one I have on my wrist is an Android smartwatch that has been retrofitted to detect PPM codes. We have the male version and female version.
We also have the “FitBit” version, for those who say, “I have a $6,000 Rolex and I don’t want to wear another watch on my wrist.” What takes up the bulk of real estate in that device is the cellular modem. When you remove that cellular communications infrastructure, you can get into severe miniaturization technology and miniaturizing that chipset and putting it into a variety of form factors. The expectation is that they are easier, they are more comfortable, and you get a better compliance rate.
We will be testing these wearables in the fourth quarter of this year in a friends-and-family test. We monitor the way they wear them, the behavior around it, the motion detection, to get the basic info, and from there, you start to expand the level of testing.
You do smaller-scale testing in parallel with PPM, and you compare the numbers that come back. What does the data look like coming back from these wearables? How does it compare to the legacy PPM devices? You look for differences, and over time, if everything checks out, you start to integrate these devices into the currency system.
You asked about cell phones — we’re working hard on that too. We believe there is a solution, but it presents engineering challenges. Everybody carries a cell phone, so why not throw the PPM software on there? Well, think about what a cell phone is. The microphone on cell phones is directional and designed to suppress ambient noise. The microphone in the PPM is exactly the opposite. It’s the most expensive component in the PPM. It’s a hearing aid-quality microphone that can pick up the most subtle sound. When you try to switch to a device that is filtering ambient noise — what is radio listening but ambient sound?
So we need to overcome that, and its specifications are wildly different based on the manufacturers. These are the engineering challenges we have. Our engineers are working hard on this, and if they can crack that, there’s a big opportunity to leverage the fact that people carry cell phones — it is almost ubiquitous.
Radio Ink: Back to the wearables. If someone goes out for a run with a wearable PPM, listening to the radio on headphones, does that pick up?
Kelly: Chances are you’re listening to digital streaming. Very rarely is it over-the-air AM/FM radio you have piping through; you’re listening to a streamed station that would be captured via the SDK. That approach is not dependent on the headphone adapter.
Radio Ink: You have a room full of radio executives, including the most powerful people in radio. What would you say to them?
Kelly: The best way to grow Nielsen Audio is to help the industry grow faster than it otherwise could. And the way I see that happening is to leverage the Nielsen assets. A lot of people think of Nielsen as the ratings company, but that’s only a third of what we do.
The other two-thirds of this company is the buy side of the business, working with major advertisers like Johnson & Johnson, Kraft, Procter & Gamble, and Nestle. These are customers of ours who spend a lot of money with Nielsen and rely on Nielsen for their consultation. We need to start breaking down those barriers.
Audio is kind of a silo, but if we can start to engage that side of the business and introduce radio to these advertisers, many of whom are spending billions of dollars in advertising — with little or none of it going to radio, for whatever reason — that will be time well spent.
When Nielsen added radio to its portfolio with the acquisition, something really important happened. The last piece of the puzzle dropped into place. There is media consumption for everything else Nielsen is measuring, evaluating, scoping, and scaling, and there is this chunk in the middle that all of a sudden has dropped in, and it has completed the picture of media consumption and product consumption.
With Arbitron, it was just radio. It was a silo, and it did not commingle with anything, but now this is not just about radio anymore. Now we have the broader view, the mosaic, and where radio fits into that picture. It’s now about creating the linkage points with all other media and all other consumer behavior that Nielsen is collecting and tracking.
So when we put out a comparable-metrics report and it says radio is a top weekly reach medium, that has context now because Nielsen is measuring them all and can lay radio side-by-side with TV and digital and mobile.
Radio Ink: So what does all of this mean?
Kelly: It elevates the profile of this medium in a way I don’t think we’ve seen in the past. We now have the ability to link radio data to all of these other data sources — millions of product-purchase transactions through Nielsen Catalina, linking radio data to credit card transactions for the first time ever.
We have the opportunity to quantify the return on ad spend with radio. I spend a dollar on radio, what can I expect to get back in return? We can see now how radio augments the recall of TV ads and how the two fit together to create something more impactful for advertisers. We’re learning about the value of recency, having heard the message recently, right before the point of purchase, and how that impacts the decisionmaking process.
So what we have is a body of work now that has helped us understand, not what you already know, which is that radio works, but more importantly, how and why radio works. We put this into the 6 R’s of Radio piece that you were so kind to showcase for us at the Hispanic Radio Conference, which has gone viral. It has been shared, liked, linked, and re-tweeted thousands of times. It’s part of the sales kit.
But it’s not enough to do these studies and throw them out there. We know that we have to get them in the hands of the right people. Who are the right people? Big, billion-dollar advertisers who don’t use radio. How do we get to them? What we’ve found out is the right people are the Nielsen people. These are clients. They have their own rep teams, and sometimes dozens of people who work on these extremely large accounts.
So what I’ve been doing is crossing over to the buy side of the business. I’m participating in their meetings, listening to the issues and concerns, but also talking about audio and explaining that they have a new tool in their toolkit, and it’s called audio. We are meeting face-to-face with these extremely large advertisers.
Radio Ink: And is it working? Will we see new advertisers, as a result of what you’re doing, come to radio?
Kelly: It’s having an effect. They are hungry for more information. They are now taking a fresh look at radio, in some cases where they have not spent a dime on radio since the days of old. From what I’m hearing in these meetings, digital is falling out of favor. They’re realizing that they’re buying the same consumers over and over again. One of the quotes I have heard is, “We are writing checks that these guys aren’t able to cash.” They are not happy with the lack of accountability, the lack of standardization, the lack of independent metrics they are getting from digital. Placement is an issue. They don’t want their logo slapped up against ugly hate speech.
They realize they’re spending too much time at the bottom of the sales funnel, hitting the same people. They are saying to us, “We need to move back up to the top of the funnel. We are mass merchandisers, and we need to get back to mass media. We want incremental reach.”
They want to reach ethnic audiences. They’re looking for ways to deliver the message to the consumer who is going to purchase. They want to deliver the message at the right moment, when the consumer is in that purchase-making mode, when they are getting out of the car and walking in. They want accountability. They want reach while still being targetable.
I’m listening to this and realizing these are so many of radio’s key strengths. I’m no dummy, so I take all this and put it into what we’re referring to as the Brand Manager’s Guide to Radio. This is a primer for brand managers to re-acclimate them about what radio is.
Radio Ink: Why are these advertisers meeting with you? What are they looking for?
Kelly: These advertisers are meeting with me because I’m not threatening to them. I’m part of their Nielsen solution team, and I’m not pitching a schedule. I’m a resource to help educate them.
The next step in the process is for the industry collectively to step up, put its best foot forward, and make a case for why radio can deliver solutions to their toughest challenges. At that point the environment will have evolved to where somebody’s going to have to make the pitch and ask for the order.
When it gets to that point, the thing I’m asking my customers is, “What are you going to say? What does that pitch sound like? Are we ready and able to speak the language that these people are comfortable with?” That’s something we need to think about right now.
Bottom line, the environment is right, the winds are shifting and blowing favorably in our direction. The table is being set, but if there is no follow-through, it will come to nothing.
I don’t believe there has ever been a better time to be in the radio industry, and that is not just smoke. I believe that to my core. Collectively, we have an opportunity to make 2017 a tipping point in a very positive way for the radio industry.