Apple's iTunes Radio Hires Sales Exec From Cumulus Media
Former Cumulus Media Exec Michael Pallad Started Last Week — Apple's iTunes Radio has poached a top radio ad exec as it prepares to offer the service widely to advertisers in 2014. — Former Cumulus Media executive VP-sales Michael Pallad …
Context & Ripple Effects
Apple has been building toward this since June, when AdAge reported it planned to sell audio ads on its then-upcoming streaming service. With iTunes Radio launched and a wide advertiser push set for 2014, the missing piece was a sales organization that knows how radio buyers actually spend — hence poaching Michael Pallad, executive VP of sales at Cumulus Media, one of the biggest names in US radio.
The hire cuts both ways: Cumulus is the same operator that signed on in September to power Rdio's ad-supported free tier, meaning its commercial playbook is now feeding two competing streaming services. The story traveled widely on pickup day, syndicated by VentureBeat, MacRumors, 9to5Mac, AppleInsider and four other Apple-focused outlets.
First-order effects
- Apple gains a senior radio-ad sales operator just as it prepares to open iTunes Radio inventory broadly to advertisers in 2014, closing its biggest capability gap against Spotify, Pandora-style incumbents and terrestrial radio.
- Cumulus Media loses an EVP-level sales leader to the very platform class threatening its core spot-ad business.
Second-order effects
- With Cumulus supplying both Rdio's free-tier partnership and now Apple's sales leadership, broadcast operators become the talent and infrastructure layer for streaming ad models rather than only competitors to them.
- Radio ad buyers get a new, heavily resold alternative: Apple can pitch iTunes Radio's listener data and device footprint against traditional drive-time spots, forcing agencies to split budgets they once placed almost entirely with broadcasters.
Third-order effects
- If broadcast-to-streaming talent migration continues, radio advertising becomes a platform business run by ex-broadcast executives — with pricing and targeting power shifting from station groups to the services that own the listener relationship and the data.
The trend: Streaming music services are recruiting veteran broadcast radio executives to pull local and national spot-ad budgets into programmatic, data-driven audio platforms.