NEW YORK - Bob Pittman, chairman of media & entertainment at radio giant Clear Channel, said here Thursday that radio companies must fully embrace digital as an opportunity.
He signaled that he sees digital upside in terms of audience reach, engagement and financials, including advertising revenue.
Late last year, the former AOL COO, AOL Time Warner co-COO and MTV head bought a stake in Clear Channel and then took on an executive role at the company.
Since digital radio accounts for only 3% of radio listening right now, digital is the sector's biggest upside opportunity, he argued.
"We have work to do," he told the Ad Age Digital Conference. Sector players must "make the digital revolution come to radio" to get in front of it rather than being driven. "There are real benefits to the radio business and to our listeners," Pittman added.
Among the digital opportunities for radio firms, he mentioned online replays of shows, coupons, access to artists and social interaction. He also said that Facebook and other forms of social media are allowing radio to replace old-school telephone request lines.
In his conference appearance, Pittman said that digital also enhances radio for marketers as Web sites help people research products, which is traditionally a key step between hearing or seeing an ad and buying a product. For example, he said that 90% of buyers of cars and other products say they researched them before making a buying decision.
Talking to reporters on the sidelines of the Ad Age Digital Conference, Pittman said the good news is that despite doomsday prophecies radio throws off solid revenue and cash flow. That means there is no pressure to make immediate money as in the case of startups and let radio build its digital business over time. After all, it also took MTV years to attract blue-chip advertisers like Coca Cola, he said.
"Digital here is not a replacement for radio," Pittman emphasized to reporters. "It is an add-on."
Before joining Clear Channel, he was looking for "a great company that I love that's undervalued" or "a company that is doing much better than its public perception," he told The Hollywood Reporter.
Asked about the challenge of his job, he replied: "What I love about radio is that half of the story is telling the story."
He also signaled that Clear Channel will build up Pandora-type functionality. "Pandora has proven that there is an opportunity that I call custom radio," he said. "What I think it is is a very quick and convenient way to make a playlist...It's really a good service. So we're going to add that."