Martin+Report+Proposal

TO: Proximity Music Team FROM: James Martin SUBJECT: Proposal for Report on Clear Channel DATE: Jan 11, 2009

Radio used to be a guaranteed way to achieve targeted advertising but this is no longer the case. Prime target demographics, such as Gen Y listeners, are quickly leaving broadcast radio for an assortment of music outlets; and many large radio companies like Clear Channel are losing money, accruing large debts and could face bankruptcy. I propose to write a report which will analyze Clear Channel’s Radio Broadcasting division specifically focusing on its ability to reach the Gen Y demographic for prospective advertisers.

With a large global recession still in effect advertising dollars must be spent wisely. It is crucial for clients whose advertisements are aimed towards Gen Y audiences to know their target will be reached in the most efficient manner possible. To do this our clients must take into account the most current trends in any market they wish to utilize. · A recent Neilsen study found “that 77% of adults are reached by broadcast radio on a daily basis, second only to TV, at 95%”; · Clear Channel’s parent compay, CC Media Holdings, Inc., has seen its stock plummet from $36 in 2008 to around $4 currently; · Many industry insiders predict that the radio market will weaken as advertisers migrate to online content. Contradicting indicators such as these demand a closer look.
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The proposed report, “Clear Channel’s Radio Broadcasting Division and its Targeted Marketing Implications,” will cover the following topics: · The decline of broadcast radio’s market share and advertising potential; · An analysis of new trends in music listening with regard to advertising trends, concentrating on online sources; · Clear Channel’s attempts to gain access to these newer markets; · A business analysis of Clear Channel’s parent company, CC Media Holdings, Inc. All of the above sections will analyze trends with the goal of deducing Clear Channel’s ability to target Gen Y music listeners. The following sources will be crucial to the finding in my report. Huslin, A. (2008, August 6). Radio One Loss Grew With Drop In  Ad Sales ; Spending Shifts to Web, Firm Says. //Washington// //Post,// p. D01. Retrieved From LexisNexis Academic database. Huslin talks about financial loses being felt by Radio One, an urban media company. According to its chief executive, Alfred C. Liggins III, the company expects the radio market to continue to “soften” and is concentrating on its online presence, “I believe it will be a growth driver into the future. It's also part of our diversification strategy because ultimately I believe our future is in being a black media and content company, and not just a radio company." McBride, S. (2008, February 14). Clear Channel Changes Its Tune On Radio Strategy. //Wall Street Journal - Eastern Edition//, pp. B1-B2. Retrieved from Business Source Complete database.  McBride discusses Clear Channel’s decision to move away from its “Less is More” program which attempted to get advertisers to buy shorter 30 second spots at higher prices than the more traditional 60 second ones. The idea behind the program was that shorter commercial breaks would help lessen the amount of listeners who change the channel once the music stops. While Clear Channel points to an expansion of audiences in 64% of its top 50 markets in the months after the program was implemented to say that it was a success, its cancellation indicates otherwise. This article includes stats that show the decline of advertising dollars spent on radio and will help bolster my argument that the industry is looking elsewhere to find its target audiences. McBride, S. (2009, November 10). Clear Channel Parent CC Media Posts Loss as Sales Decline Further. //Wall Street Journal - Eastern Edition//, p. B7. Retrieved from Academic Search Premier database. Here McBride outlines losses experienced by Clear Channel’s Parent company, CC Media Holdings, Inc., in the third quarter of 2009. The losses, which amounted to $89.9 million, were just slightly less than the $90.2 million loss in the second quarter. Despite the fact that “that its debt-to-earnings radio continued to edge toward troublesome territory,” the company stated that “said declines in its radio and outdoor advertising markets seem to be stabilizing.” McBride, S. (2009, December). Mixed Signals in Web Radio. //Wall Street Journal - Eastern Edition//, p. B10. Retrieved from Business Source Complete database. McBride analyzes statistics on advertising revenues from internet radio and determines that while many listeners have switched from traditional broadcast to the internet radio format, the industry is having trouble turning those listeners into profits. Because the total amount of internet listeners is still only a fraction of broadcast radio’s market the advertisements are much cheaper. She also indicates that the “newness” of the technology has many advertisers feeling hesitant to jump into the market. Nolter, C. (2009, December 11). Clear Channel unit gains wiggle room. //The Deal,// Daily Deal. Retrieved From LexisNexis Academic database. Nolter discusses moves taken by Clear Channel Outdoor Holdings Inc., a division of CC Media Holdings, Inc., to raise $750 million to repay debts owed due to agreements made in its 2008 buyout. The move prompted Standard & Poor’s to raise its cooperate credit rating for Clear Channel citing that its “$2 billion cash balance should keep the broadcaster within the restrictions of its debt agreements for "the next few years."
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