A long under-utilized but growing asset in local radio’s ad portfolio is in-screen visual display inventory comprising text and images. Basic RDS technology available in 70-80 percent of cars on the road allows FM broadcaster to deliver program and advertising content. For maybe a quarter of the cars on the radio with HD Radio receivers, images can also be sent. As radio searches for new pockets of revenue growth opportunities, in-dash visual ad inventory is becoming a thing for major groups.
I was very pleased to welcome Steve Newberry, Quu’s CEO, for a podcast discussion on the visual radio ad ecosystem and opportunities local radio stations can target with this technology. He shares a lot of exciting opportunities for radio to deliver ads in a compelling, ROI manner during our discussion.
You can listen to the podcast here. You can also read an edited transcript below.
Edited Transcript
Hello, and welcome to BIA’s Leading Local Insights podcast, where we examine the trends, technologies, platforms, and industry activities related to local media revenue. I’m Rick Ducey, Managing Director of BIA Advisory Services. I’m here today with Steve Newberry who is CEO of Quu.
Before we get started, Steve, let me just share a bit about your background. You’re an accomplished broadcast executive, particularly in radio, with dare I say over 40 years of experience in the radio industry. And just personally, having worked with you through several different roles, you’re a person of integrity, you like to collaborate, and you’ve been a strong advocate of the radio industry in various roles and been recognized as such.
Steve oversees an innovative technology which enables local radio stations to provide an enhanced listener experience and advertising experience to help monetize visual advertising on radio. Visual radio seems like an oxymoron. But we’ll find out that’s certainly not the case by using in-dash display technologies for text and when possible, images as well.
Steve, you’ve been Quu for almost three years now, and expanded the industry’s footprint with this technology to over 1,000 stations. And this is a number that I thought was interesting. Over 6 billion Visual Quus are broadcast annually, and we’ll find out in a moment with Visual Quus are.
Steve, just quickly, you’ve got such a deep background. You spent time in the industry, you are radio owner, spend time on NDB board and different industry boards as a participant chair, you’ve been recognized multiple times by Radio Ink Magazine as one of the 40 most powerful key people in radio, you are a radio guy. Now you’re a technology guy.
Let me start first by saying we’re talking about visual ads and in-dash displays. So much is happening with the car, I mean, video, you can watch Netflix in your car, you can get streaming, you can get podcasts. Still, radio is the predominant way people use audio in the car, which is good. The audio experience has been so critical to the history of radio, but there isn’t ability to do visual things.
Speak to your vision for how local radio broadcasters can make use of that in-dash visual assets and monetize it, as well as for programming and promotion. There’s money in them thar hills, maybe.
Steve Newberry
Thank you for the kind words, Rick, I really appreciate it. We have worked together for a lot of years on a lot of different topics. And I’m a radio guy, you are right. I’m involved in technology, but I’m a radio guy.
When it comes to Quu and what we’re doing, I think fundamentally, you have to start with the consumer’s experience, the listener experience the customer experience, because that’s what’s going to drive the long term success of radio, or any product for that matter. And if you look at what our traditional audience now hasavailable, to see, they’re getting Spotify, Pandora, YouTube, XM, Sirius, Apple CarPlay, over and above all of the streaming services that will be coming down the pike that are going to be moving into the automobile as well.
Radio can no longer in my opinion, afford to just be a one-dimensional service. There has been the ability to put visuals on the dashboard of vehicles for 20 years or even longer with RDS. But what we have done is trying to make working with RDS and HD visual ads a very manageable, easy process to do with links and to enhance the listening experience.
We want radio to have a visual element. Are we going to be television? No, that’s not what we’re talking about doing. But if we can reinforce what the listener is hearing with a static photo, or with a script with words? It adds to the experience, making it much more engaging. We’re finding that our listeners really liked the product we’re providing.
That’s what I think the opportunity is for radio and we can talk about how to monetize and answer those questions as we get into this.
Ultimately, it is about improving the listener and or viewer experience for what the radio product is and not just in the automobile, but ultimately on the streaming app anywhere that radio platform is being distributed. The goal is to make sure that that product has a visual component to it. To me, I mean that’s so solid if you focus on the experience and get that right. Good things flow from that.
Rick Ducey
I really like the way you framed that, Steve. Significant opportunities for radio. Let me ask this, what exactly does Quu do? Do you sell these ads? Are you a technology platform?
Steve Newberry
I just described us as a content management platform. For years, you’ve had the pipeline, you’ve had the ability to send text from the radio station to the transmitter site, and ultimately out of the air through audience or HD.
But it’s very difficult or complicated to manage change, display content, take off and put on content.
At Quu, what we focus on is making it very easy through a cloud-based app that can be accessed anywhere. The program director can do it from home. The sales manager has the ability to look online from wherever they may be located. You don’t have to be tied to the station.
We’re about managing that visual content for the display, and syncing it up with the audio, so that the listener does have a great experience that we were talking about just a moment ago. If it’s their favorite song, we want them to see song, title and artist and potentially the album art. If it’s a commercial for a client, we want them to be able to see the name of the business and reinforce the message. If it’s their favorite personality, we want them to be able to see who their in-studio guest is, what contest might be being played on the air right now, what the secret word is, what the studio phone number is, whatever makes the experience better for the listener to know how to connect and be engaged with radio station.
Rick Ducey
That clearly has an opportunity to enrich the experience. You’ve mentioned the word sync a couple of times. Is that kind of a recommended practice that these visuals, the text and images are synced to the audio, or is that not necessarily always the case?
Steve Newberry
No, it has two forms. Historically, it has been displayed without being synced. Quu kind of made our made our bones so to speak in the industry by providing the ability to sync up commercials with the display or sync up songs with a display provide song title and artist and enhanced information. But you can do it both synchronized and non-synchronized. Depending on what the use is, we can manage content display in either format.
Rick Ducey
Let’s get to some specifics. I mentioned 6 billion Visual Quus. And there are maybe 1,000 radio stations using Quu. Steve, how many people are on the street selling visual ads? Who’s using Quu , which radio groups? And on the receive side, who’s able to receive these visuals in cars? Can you give us a just sense of the structure and operating marketplace?
Steve Newberry
Let’s talk about who our customer base is and what they’re doing with it. We serve right now about 1,400 radio stations. Those stations are from the smallest stations to the largest groups. Cox, Beasley, Audacy, and some of the Cumulus stations are where we’ve got great relationships.
I don’t want to get into naming names because they’re all important. Different companies have different levels of utilizing what our product is. Some people will use it just for the basic functionality of song title, artist information and station identification. Others use more advanced services that do get into the advertising services that can be monetized. That’s what our stations do. A Visual Quu is a display on the screen. There are programming Quus and their advertising Quus and there are public service Quus and there are emergency information Quus that all kind of follow in under this big umbrella.
A station has the ability with our product to reinforce their programming by some of the examples I gave earlier. The name of the morning show, the phone numbers, information about the song title and artist. From a sales standpoint, they can sell the associated messaging with a commercial or advertising campaign. And then I think the public service function and the public safety function is something that’s important too.
I remember when the tornadoes came through Kentucky, which is my home state, seeing messages on the screens that said if you need help, we have info we can show like the studio phone number, or the American Red Cross and website, snow and tornado warnings.
You can put all kinds of information up on the screen. But it’s reinforcing at the basic level, Rick, it is reinforcing what the listeners hear and depend on from their local radio station, and adding a visual reinforcement to that, whether it’s programming, whether it’s sales, or whether it’s news or other content.
Rick Ducey
That makes total sense. Now, maybe switch to the advertiser’s perspective. Advertisers love radio, they’re used to thinking of radio as audio. Now all of a sudden, they have this visual real estate. And like we’re saying Visual Quus are a type of display ad inventory. Advertisers are used to buying audio.
Now, somebody from these radio stations working with Quu can offer text and image messaging in the car as well? And it can be synced or not to the audio?
When you sync audio to a visual, what happens from an advertiser’s perspective, in terms of how effective that message is, and then how, how is it bought and sold? Is it digital sellers, radio stations, because this is digital like inventory? Is it the broadcast sellers, or are these integrated teams?
Steve Newberry
Well, let me begin by demystifying it a little bit because I think lots of times when I start talking to the station, they envision – how do you schedule it?
What we do is follow the cart number. We enable the radio station to say to McDonald’s, let’s start with the sales process. And it’s the local McDonald’s. Thank you, you’re doing a schedule with us for your advertising. You know the power of what our audio is, you know, the power of our audience.
For the visual component, it’s available for an upcharge. It generally can be a flat fee, or 10% is what we see probably most common. McDonald’s can add a visual context or visual message that will display on the screen as their commercial display. It could be a 60-second McDonald’s commercial that’s playing its cart number 8380. The puts it in one time as cart number 8380. And when that McDonald’s spot plays cart number 8380, we will display on the screen. It will say McDonald’s dollar menu, sausage biscuit get one free, or McDonald’s, open 24 hours. Whatever the difference is, it reinforces the audio message on the radio commercial at the same time. I think that’s something that is important to understand.
The way that this brings the most value to our advertisers is when they’re running the radio ad. If the client is or the listener is seeing the message displayed, like a billboard in the vehicle, think of it the same way you would use outdoors. You’re driving down the road, you want it to be able to be seen very quickly, absorbed very quickly. You don’t want to be distracting drivers with a lot of but you’re driving down the road, and you hear the commercial for McDonald’s and you glance at your screen you see McDonald’s $1.99 Big Mac, then it reinforces what that message is. You get a lift of x of sales or things of that nature.
Right now, it’s all anecdotal. There was research done that said that when you add a visual to a radio ad, you get a 63% lift in retention. Nice. So that is a big, big lift. I’m seeing nothing that is contrary to that.
Clients that are using this product are really using it aggressively and seem to be very pleased. It’s about reinforcing the message that’s on the radio ad.
Rick Ducey
I’m just curious, who can see these visual radio ads? For the text, like the RDS technology, there probably is a much bigger penetration among cars on the road. HD Radio particularly with newer model cars has some penetration, but what is the penetration? Who is the audience possible for these ads?
Steve Newberry
Xperi says that 80% of the vehicles on the road can see text in one form or another. That’s vehicles, that’s my passenger car. It also includes construction fleets, that includes U hauls, and includes buses, dump trucks. Basically anything you put on the road is included.
Obviously, you would expect it to be higher than 80% in passenger vehicles. We do tell our clients this is a text campaign because that really is in reinforcing the message with the text support. The ability to use HD technology and adding that reinforcement with a logo, or a picture of the Big Mac, or whatever you might want it to be, that’s great. But only about 20% of the vehicles on the road can actually receive those. Sell it as a text campaign and say to the clients, and for the 20% of the vehicles that can receive the logo, we’re going to provide that to you at no additional charge.
It really is a text value benefit right now, whether it’s text on HD, or whether it’s text on RDS. Then if they have the enhanced HD service, that makes it that much better. The way I use that is you’re driving down the road and you hear a song you haven’t heard for years. What you want to know is the name of the artist and the song time. That’s right. Now, if you’ve got the album art that makes the experience that much richer, but what you’re really wanting to know is the name of the artist and the song title. It’s the same thing on the commercial experience. Who’s the client? What’s the message that’s being reinforced? And the logo or the graphic or the visual that comes with the advanced HD? That’s icing on top of the cake, but the real power is the text.
Rick Ducey
Yeah, no question. And people engage with us. I mean, you mentioned kind of testimonials and some research studies I’ve seen that show some engagement and some lift, combining audio plus visual elements. That’s really encouraging. And, you know, people, I guess behaviorally are more used to looking and reading off dashboards, screens, their GPS, Apple Maps, Google Maps, Waze. Whatever they’re using, they are interacting with their media and entertainment, information systems. They’re getting a lot of display information off there. We have task loading drivers. For better or worse, that’s, that’s the cockpit of the car.
Steve Newberry
Inevitably, I’ll get a question. Well, what about driver safety? And they’ll say, listen, we’re NITSA compliant. First of all, that’s right. Yeah. Traffic Safety Administration. But we’re just getting radio up to the same platform. Exactly. We’re not breaking new territory. We’re just getting radio into the game like other clients like other.
Rick Ducey
I mean, it’s from a listener perspective, especially younger listeners who are so digital centric, they’re looking at the screen, and there’s nothing there. In a sense, you’re completing the experience and giving them some clue, because they’re so used to that anyway.
As you mentioned, some case studies I’ve seen show different kinds of lifts that depend on the business category, the creative and the target audience and everything. The numbers are pretty impressive. It is more engaging with a visual component. I don’t know if we’re evolving as a species, but people are able to drive and manage a lot of information in that cockpit. Any case studies or examples that kind of stick out in your mind as good ones?
Steve Newberry
Again, I’ll give you some anecdotal stories that don’t have the case studies sitting in front of me, but here’s one of my favorites. And it was at my radio stations in Kentucky early on. We had a carwash that opened, and the carwash wanted to test radio to see if radio was going to work. They gave a code to each of the three radio groups. Each of the three groups had a different text code that they were putting into their copy because they wanted to see what’s happening.
Our Quu stations performed much better than the competition did not because you necessarily have more listeners than the competition to what we’re putting on the dashboard. So for example, text “free wash” to a number. We were able to immediately connect with listeners and reinforce brand and put that information there so that the listener got the text campaign back in the free carwash.
And text is powerful. There was no writing it down; no let me remember to do this. It was just going to be a thing. I had a pizza place that had been trying to establish their delivery business, it was not one of the major pizza chains. The whole point of the thing that they did was the phone number of the pizza delivery business. It was amazing to see the increased lift and retention. We did some research with Jacobs and others, and the number of people that would hear and see the commercial one time and be able to recall the phone number on the screen with the display.
What the real power of this is that it supercharges the effectiveness of radio advertising. That’s what I’m trying to explain to people when we’re doing this, I don’t see this as a separate advertising category. This is about reinforcing the message and making radio advertising more effective. And you can draw a heart rate because the clients get that. It’s been cool to watch it happen.
Our non-synchronized messages are getting demand. We’re seeing this from a lot of the legal firms, we’re seeing in some with auto where they want to come in and they want to buy the display time. You’ll have an agency that may say we want to buy your dashboard displays. That’s great. You like every other radio broadcaster, I’m glad to have that services revenue, that legal business revenue coming into my station. But I don’t want to sell them the complete display on my dashboard.
If I’m running McDonald’s or Lowe’s or Kohl’s commercial, I don’t necessarily want there to be a law firm message on the screen at the same time. Jacobs research showed that when that happens, listeners think the radio station is not paying attention and forgot to update the message. We learned a lot from that.
In working with some of the major broadcasters, we developed a new product that takes that super display or that super client, the law firm or others out of the commercial break and puts them into the middle of the content.
For example, a song comes on to the listener experience, which must be first since there’s 90 seconds of song title, artist information album art if the car’s equipped with HD Radio. And then there’s a 30 second message that comes up and displays what the client’s message is while the music continues to play. And then it goes back to the song title and artist input information. It’s not intrusive on the listener.
We’re getting a lot of program directors that are really being very positive about what we’ve developed even if they’ve had bad experiences. They don’t want to lose their branding opportunities and realize the need to find a way to meet this appetite that the advertising community has.
Rick Ducey
Yeah, absolutely. It goes back to the way we train audiences, if you will. I mean, that’s almost a video equivalent of a video overlay running as you’re watching your content. There’s a spot and you go back to your content, although in this case, you don’t interrupt the content, you still get to enjoy the audio.
Steve Newberry
Here’s another example of someone who’s in the media business and she went to see her sister down in South Florida. Her sister’s not a consumer of media. She just listens to radio stations and watch TV stations. She doesn’t try to analyze media. So she gets in her car. This person said what radio station do you listen to? She said, I’m listening to the one the law firm owns. We think we’re calling it by the station’s name but now it was now going to by the law firm’s name.
I shared this story with Pierre Brevard, who I have such high regard for. Pierre said, that’s incredibly exciting and incredibly frightening. It’s exciting because it does show what the value of this real estate is. That’s right. It is frightening because if you don’t do it the right way stations can lose their brand can lose their identity can alienate other advertisers.
A big part of what Quu’s responsibility is for the industry is better technologies, better practices, better experiences, and to keep the listener forward so that we are helping radio companies across the nation.
To generate more revenue, we’re helping their advertisers get better results. We’re helping the listeners have a better experience. And we’re maintaining the programming integrity of the brands. And we’re trying to make sure that it’s a good experience for all four entities, not that it gets out of whack or disproportionate or begins to alienate the listeners to the station.
Rick Ducey
Yeah, that’s really fabulous. That’s a really tight playbook that makes sense. You’re validating it going forward. It seems like the narrative arc, if you will, is that this is a technology, especially on the tech side has been around for a while, even on the digital side. But it seems like it’s getting more gravitas and momentum in the market now largely to efforts like yours and others to say, let’s see if we can get some incremental revenue on this platform we have.
Steve Newberry
Because of what those revenue expectations are, okay, yep, you’re seeing advertisers pay $8,000 a month to be one of the content partnerships. Yep. As opposed to paying $2,500 a month to own the dashboard of the radio station, because radio stations are now more informed. They know what this real estate is worth. They’re doing a better job of pricing it. I know one cluster in a top 10 market that is doing $600,000 of revenue across its stations strictly because of the content partnerships.
People are making money and then you do the incremental add on to the ad syncs that we were talking about. It’s really beginning to generate some revenue for stations and a much better experience for the listeners.
Rick Ducey
Excellent. I want to kind of open it up with the final question saying anything else we need to know about.
NAB Technology Department has issued a few reports on dashboard best practices that I think you were involved in. It looked at what broadcasters are doing with metadata. Do they have and use the tools? How are they using the metadata? Is it consistent usage in the industry?
What are the things that you’re doing to help make this more seamless, immersive, engaging experience? How are you with the sort of technology platforms and what the consumers are experiencing the cars and what the cars are doing the least with the OEM receivers, and so on. And we have a good kind of environment where there still needs to be some work done.
Steve Newberry
There’s always work that needs to be done. And let me say that at the NAB, the technology team there under Sam Matheny, they are constantly aware of this.
But Rick, you’re an NAB alumnus, I’m an NAB alumnus. It’s a trade association. It’s not about mandating things to the members. It’s about servicing the members. I think the answer to this is better suited being in the private enterprise where we are offering a solution and then letting the broadcaster determine if this is the best path for them to take as opposed to NAB mandating. But that said, there were times that I really wished NAB could do something like this. And I do think it’s getting better.
We’re just now in the first inning of what’s going to be the ballgame. Because this technology doesn’t just need to be seen as song title artist on the dashboard of the car. This needs to be seen as a comprehensive way to provide accompanying visual messaging on whatever platform, the listener chooses to utilize his or her local radio station.
If it’s a stream, if it’s an app, if it’s technology that you and I can’t imagine right now, it’s using the Xperi auto dash, the DTS, whatever those platforms are, radio has to make sure that we’re taking the steps. But let’s take the first step. Let’s not be paralyzed. We’re trying to make it as easy as possible for stations to take the first step and show them how they can monetize this as a real income source.
Rick Ducey
Broadcasters are growing on the digital side, bringing in more digital people. Some of the things you’re talking about, the kind of aptitude and sensibilities that have been coming more into the industry in recent years than when this technology was first available.
Steve, thanks for joining us today!
