Jeffery Liberman

For over 25 years, Jeffery Liberman has been actively involved in Spanish radio. After operating Entravision's 17 radio stations in California, Colorado, New Mexico and Washington, D.C., he was promoted to President of the entire Radio division in January, 2001. Since then, Entravision has grown in stations and in audience, reflecting the growing clout of the Hispanic market. Here, he discusses Entravision's presence in the overall radio market and the issues facing its future growth.

What's the business outlook for Entravision in Q4 '10 and 2011 - are you bullish or merely hopeful?

I'm optimistic that the advertising recovery is taking hold. Our national business has been strong throughout the year and we're having a nice fourth quarter. Our audience is also a bright spot for us; we cater to the Hispanic population, which continues to grow and increase its spending power. With that said, we're still concerned about the direction of the economy, the foreclosure rate and the unemployment rate. Our local business is still lagging, as it's still hard for these mom-and-pops to come up with advertising dollars. We're working on ways to get around this, but essentially as the economy goes, most media businesses go.

So what are the keys to optimizing your prospects for 2011?

Focus ... from a programming standpoint, we're going to make sure it continues to cater to our target audiences by providing the most compelling and entertaining content. We also make sure we're educational and informative by airing specials and political programming that address issues that are critical to Hispanics, such as immigration and local elections. On the sales side, we have to continue motivating our account executives to help them better understand the opportunities for cross-platform buys with our strong television and digital assets. Part of that means making sure that they know we're standing side by side with them; to the point where the GM and even I am going on sales calls with them.

What are you emphasizing to your clients ... building their brand, or generating ROI?

The business for them is ROI. They want to make sure that they keep their cash registers ringing. Our goal is to get out to those businesses and show them that we're very active in the local marketplace. We have to sit down with them and show them that by advertising with us, they don't have to spend much money to move a lot of product. We have to incentivize them in some respect to put their businesses on our air and on our websites.

But we're not just giving them an advertising solution; we're giving them a marketing solution. Some clients are still unfamiliar with the creative work we can do, so we've recently brought our creativity to the clients by producing great promotions. It's the difference between advertising for today's customers and advertising for tomorrow's customers. We're putting a lot of attention on tomorrow's customers. We did one recent event where we brought Piolin, our top-rated morning personality, to Denver for the first time in 10 years. The event drew more than 4,000 fans and featured live music by Grupo Alacran and Banda La Revuelta, contests for children and adults, and special gifts for everyone in attendance.

So how does one sell branding to clients who are primarily interested in ROI?

We have to show them the importance of being branded in the marketplace. For example, I wear glasses occasionally, but I don't buy a pair every day. But if I put them in my back pocket tomorrow and sit down on them, I'm going to be in the market for a new pair. I need to know where to go. By offering marketing solutions that brand our advertisers as the first place for customers to go for what they need, that creates far more long-term clients than short-term business.

Black and Hispanic radio interests worked hard to get Arbitron to devote more energy into generating a representative ethnic listener sample doe the PPM. Are you happy with what Arbitron has done so far in terms of addressing your concerns?

I'm happy with what Arbitron has done with the PPM Coalition, of which Entravision is a member. However, we didn't sign onto the agreement because it didn't really address my major concerns. In-person recruiting is not my major concern, nor is country of origin. The most important issue, which is still not fully addressed, is the size of the sample.

Arbitron goes out with their DDI numbers, which is actually a way to reduce the number of panelists against which they compare actual PPM performance. They have told the industry that only 80% of the panel carries their meters on a weekly basis, so that is what they measure themselves against. I am not sure why the industry allows Arbitron to measure their performance against a target of only 80% of the installed panel; I feel this is the wrong way to measure their performance.

In the Sacramento market, the panel is so small that I can't pull out Hispanic males 18-34 data. This makes our job at the advertising agencies a bit harder because we have to educate them on Arbitron's methodology, along with selling our great Sacramento properties. Arbitron, at the beginning of October, increased the panel by 10%, but in my opinion, that is still not enough to get accurate ratings because the panel is still too small -- even with the increase

With that said, I want to emphasize that I do love the technology and it does work well compared to the diary system; it's just that the sample size is way too small.

Just how far off is their sample for, say, Hispanic men 18-34?

Arbitron's methodology says one needs to have a minimum of 30 panelists in any cell to produce audience estimates. In Sacramento, Arbitron doesn't hit the minimum in Hispanic males 18-34. Based on an analysis that my research department conducted, Arbitron would have to triple its panel size to provide viable data. I have been working with Arbitron on these issues and I am being told that they're working on providing a bigger sample and that they're testing different things. All I want to do is provide my advertisers with the information that they are asking for. We are paying more and I want the information to be as accurate as possible.

Increasing the sample by that much would undoubtedly cost Arbitron considerably more to run, which means they might come back to you and ask you to pay more.

Absolutely, but I don't think broadcasters should spend any more money if they're not getting their money's worth now. It's Arbitron's responsibility to provide reliable research on listenership. I will say that I've met with the new CEO, Bill Kerr, and I think he is working with the industry to come up with alternatives.

But again, how long can we wait without reliable research? As a Hispanic broadcaster, we had to wait three years before we got language weighting. We also had to struggle with Arbitron to make sure Hispanics used the devices as well as the general market. We keep waiting year after year for them to perfect their product and to be honest, I feel that they should move quicker.

Some of the smaller group owners - especially in the smaller markets -- believe they could sell their stations without any ratings. Could Entravision do that?

It's very tough to say you can live without numbers, but it's also true that the numbers aren't everything. The Hispanic audience is still growing -- as the census numbers will show next year. We've had limited competition in most markets and I expect Spanish media to become a media-dominant force.

After the census comes out, I might change my mind a bit on whether or not we need the ratings; currently, we don't need them to sell local direct business. For these advertisers, it is all about the return on their investment.

On the national side, it's a double-edge sword for us. We're currently selling our advertising at a lower cost per point than the general market, but our upside is that the revenue gap (the differences between general market cost per point and the Hispanic cost per point) will shrink as the Hispanic population grows.

What's your view of the recent discussions regarding a compromise on a performance royalty? Will Entravision be as impacted as general-market operators?

Everybody in the industry will be impacted. I was at a conference in Miami, where the artist Pitbull said that when he sits down to create a song and write lyrics, he thinks about what radio stations his songs will be played on. If he adds English into a Spanish song, for instance, it'll get played on more stations. I sat there thinking that these artists still want to use radio stations to promote their music and sell concert tickets, so I'm not sure why we're being put in a situation where we have to negotiate royalty payments when it's still obvious that airplay equates effective marketing.

There are those who are threatening to adopt a pay-for-play situation to cover the money used to pay for a performance royalty. Is such a concept in the back of your mind, too?

I've been thinking similar things, too, especially for music from proven artists. It's something to look at, but it's too early to talk about it right now. There's no resolution yet. The NAB is still in talks with them to try to negotiate a settlement. As an industry we need to stand strong to get the best deal we can by informing the record industry and Congress that without airplay, none of these artists would be in business. There's still a lot of value to playing songs on the air. If we pay a royalty, they may have to pay to get on the air -- all we have to do is inform our audience that a promotional fee has been paid through a mention on-air prior to the song.

Radio overall has been tagged as a "dying" or "dinosaur media" compared to the new Net and social media. Do you have to deal with that perception problem with your audience, and if so, what do you do to combat it?

First of all, radio is not a dying industry or medium. It's still one of the best promotional tools for clients in the world ... and a great entertainment choice for listeners throughout the world. And, more importantly, radio is local. People want to know what's happening in their community.

With that said, Latinos in our markets have fewer choices on the radio than do people who listen to general-market radio. It's as if you decide to do business in Japan: you go there, rent a car and almost every station on the radio dial is in Japanese. There's just one English speaking station, so you'll naturally migrate there every time you get in the car - whether you like the music or not. Where else can you go to quickly and easily find out what's going on, where to eat and where to buy things?

That's what's happening in the Latin marketplace on a daily basis. Our listeners do not have the number of choices that general-market radio listeners have. Then we go one step beyond that, combining traditional TV and radio stations with online properties, such as our websites, music downloading and aggressive texting campaigns, and all of a sudden we're creating opportunities that aren't really advertising opportunities, but marketing opportunities for our clients.

How aggressive is Entravision's digital strategy in terms of websites, streaming, etc?

We initially took a wait-and-see attitude; and introduced our digital assets about two years ago. After we sat back and watched how other broadcasters did it - as well as the mistakes they made - we got deeply involved. The Hispanic market is over-indexed on technology such as cell phone usage, so we have a robust texting platform. All of our station giveaways are done through texting campaigns. That's how we give away concert tickets now. We ask people to register to get our texts. We send them info, such as the time and day to listen for a clue or giveaway; we also send a text reminder. We're really pushing the back and forth, from radio to cell phones, all day long. It's all part of our advanced marketing strategies.

There seems to be an anti-immigrant sentiment in certain parts of the country that possibly could impact your audience. What do you see as Entravision's role in this -are you there just to inform your audience in the politics of 2010...or to defend or serve their interests?

Our position is to serve the community. Let's focus on our three Phoenix stations, since Arizona is the most vocal state regarding the immigrant issue. When State Bill 1070 became law, we started a weekly radio show where we brought immigrations specialists in to inform our listeners.

At the same time, there were reports of a mass exodus of Latinos out of the Phoenix area, so I turned around and looked at our Arbitron numbers and, between our three stations, found that we are still reaching over 600,000 listeners per week. PPM data provided the proof we needed to show advertisers that our listeners were still here.

People may say we've become part of a political movement, but what my employees say to me is that we're serving the community. As much as radio is around to play great songs, entertain people and tell people where to go to buy products, we also inform our community. It's a part of our business that many stations don't think enough about -serving our communities by making sure our audience is well-informed.

As the size of your potential audience grows, are you interested in growing your company through station acquisition?

Yes; with the new census numbers coming out, we will continue looking to make investments and buy properties in emerging Hispanic markets, as well as add to the markets where we already have a TV or radio presence. We just started a Spanish-language TV station in Wichita because it's an emerging Hispanic market; we will continue to look at those type of investments.

Others potential buyers have complained that the sellers are still trying to sell their stations at pre-recession prices. Have you found that to be true?

Many sellers still have huge expectations of what they expect to get paid, but as an operator we know as we go into a deal exactly what we can and can't pay. We'll never overpay for assets. It may not be the right time to purchase a particular station now, but it may be the right time six months to a year from now.

It may also be true that as the economy gets better and the revenue improves, the sellers' expectations may also get bigger, but with better revenue comes a better business model, so it can work itself out.

What are your expectations for Entravision in the long term? Would you like Entravision to eventually be as big as CBS, Clear Channel or Cumulus?

Entravision is the largest publicly traded media company focused on the Hispanic market, which we achieved by continuing to serve our communities. There are plenty of areas for growth from an asset standpoint. We're going to continue to grow our digital division; we can increase the number of advertisers on our side by expanding our marketing efforts. With the rapid growth of the Hispanic market, we are eventually going to be serving the majority population in each of our marketplaces.

In some markets we already are a "majority broadcaster." Right now, the radio audience in McAllen, TX is over 90% Hispanic. Even in larger markets like Los Angeles, the Hispanic audience is approaching 40% -- and we still have a lot of upside there. In Denver, we operate two of the top-five FMs in the market according to Arbitron's PPM, where Hispanics represent 20% of the market.

At one time, there was only two or three Spanish station in L.A. Now there's around three times as many. If that trend continues, won't that carve up your potential audience?

Competition is always good, as it illustrates the sheer size of the Spanish marketplace. There are still plenty of opportunities for growth, both in terms of the number of Spanish stations in major markets and the number of emerging markets that we could enter.