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AG News: Tuesday - 4/28/2009

Radio Industry Needs to Measure Success

There is plenty of news in your radio industry trades, but most of it is a weak representation of reality. Dozens of headlines are written daily speaking of format flips, the flacid Local Radio Freedom Act, words from CEOs who are desperately trying to bring expenses in line with self-inflicted revenue declines, and various partnerships between new media companies that are trying to move both audience and advertisers online.

Most recently we've seen stories on more people getting (or about to be) fired, companies trying to pull the "local programming" wool over our eyes, how the economy is THE reason why radio ad revenues are tumbling, and the rush to put stations on the iPhone.

But, how much talk is there about the radio industry increasing response from the audience for advertisers? Have you read anything recently that explains how to improve radio programming or commercial content? Thought not. Me either.

A major irritation for me is watching RAB continue to tout that 236 million Americans listen to radio each week. It shows how out of touch this organization is in delivering what is being asked in today's world. Though it may make some people working in radio feel better, truth is RAB does nothing to bring in advertising dollars or to grow the audience. It produces nothing more than a stroking of ego for an industry that desperatly needs its ego stroked, which is very similar to having a graduation for kindergartners; shmooze without substance.

I'm a numbers kind of guy, but even radio industry numbers don't mean anything if they can't be turned into verifiable actions or measurements. So there are 236 million people who have turned on a radio once in a week's time. Tell me something that's worthwhile; like how many of them listen daily, how many of them responded to a specific ad campaign, or how many of them tuned in to hear a specific program in a designated daypart.

If you're looking to speak of numbers, don't tell me that over 100 Representatives have signed a non-binding resolution that says radio should not have to pay a performance royalty fee. Give me the scoop on how the NAB is going to counter that fee once the radio industry is forced to pay it... and only publish the facts, not conjecture. Draw up a plan and share it with everyone who is concerned about the future of radio.

News is what each of us wants to be fed. Yet we see the radio industry is cutting news room staffers. "Local," we constantly hear, is the defining power of radio. But anyone in this industry knows the truth, even as Clear Channel puts out a press release saying it is on a push to increase a "local" presence at its stations it was planning the firing of employees.

What is needed for radio today doesn't have anything to do with getting your name or publicity release in print. The radio industry needs to come up with a system that places how much it costs an advertiser to run a radio campaign; not how much is spent, but how much it costs. What is the return on that investment? How much product or services are ordered after a commercial plays or a banner is shown on a radio station web site. And, please, don't counter with radio's ability to build a brand. In many cases, I can buy ads to brand at less than a dollar CPM.

This morning I randomly selected about twenty radio station web sites and took a look at the code used to create the pages that you see in your browser. In most instances there was some form of tracking code embedded in the page(s) I scanned. The number of stations tracking online movement has vastly improved since that last time I did this. That's the good news. At least there is potential to start a quantitive analysis of online visitors now.

The bad news is that despite there being an increase in ability, no radio industry trades are carrying articles about "how" to efficiently use the numbers that stations now have the ability to track. If you don't think this is an important action, consider that tracking is a major reason why agencies are moving increasingly larger shares of advertising budgets online.

Roll this ability to account for audience actions into an analysis effort, and you have the means to not only give advertisers what they most want today, but all the clues to improve the quality of content to increase audience. How to use analytics and metrics is a story that should be headlining every radio industry trade publication in these depressed times.

Measurement and analysis are daily actions required by anyone having anything to do with a radio station's internet presence.

Here's the kicker. With a little creativity you can establish this with over-the-air programs and deliver exactly what every advertiser is looking for. You can tie broadcast content to your web site, and glean more accurate details on how closely you are tied to your audience than you'd ever get from an Arbitron "Book."

So where are the stories in radio industry trades that explain the "how to" for measurement of audience and response?

Analytics and metrics are being bought, not reach and frequency. Accountability is being sought, not the statistically extrapolated numbers that Arbitron delivers. ROI is being demanded by nearly any business that has a large enough advertising budget to consider spending it on radio - but radio isn't offering this critical formula. (See what actions Google takes to ensure its advertisers understand.)

236 million Americans heard a radio broadcast in the last week. Divide that by 13,000 stations and you begin to see how that figure means little when someone is trying to determine if "my $10,000 is being spent effectively."

Until we start seeing more on how to take meaningful numbers and turn them into tools to improve programming and response, it doesn't matter how large any number is. It's still a weak representation of reality in a radio industry that needs to start showing success in measurable ways.

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President, Audio Graphics
Ken Dardis
Online Since January 1997

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