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Monday, May 21, 2012
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Radio: Following the Wrong People

I think there's more than enough evidence that, since 1998, the radio industry has shown a propensity for going in the wrong direction. This isn't a slam on the majority of people working in radio. I'm speaking about radio industry leaders, and dozens-upon-dozens of people within the industry who have, over the years, proclaimed they know what direction new media winds are blowing without ever having spent time actually putting new media concepts in play.

"If the radio industry is to remain relevant it needs to create items of relevancy. Instead, what we have is a continuous stream of denying there's a problem, and even more evidence of staying the course." Enough! To date we have:

1) HD Radio still trying to get a foothold on the dashboard, while losing support from most every radio group;

2) RAB announcing a web site designed to help sell the benefits of radio to advertisers, with nothing invested in helping advertisers understand "how" radio should be used;

3) Those with little knowledge about online ad response proclaiming GM's pullout from purchasing Facebook ads signifies a major failure in FB's (or GM's) ad process;

4) Old style radio types still hyping GRP.

Is anyone in the radio industry paying attention to how new media is put together, what it delivers to advertisers, how it tracks consumer movement, or how youth view radio's product today?

iHeartRadio boasts reaching 10 million registered users. I should hope it has. Clear Channel has over 800 radio stations promoting this app. Online, the trick is to reach that number without being aided by huge amounts of promotional time. (Spotify is at 10 million, with no radio ad support.)

Even CBS, a company I consider to be out-front in movement with online ventures, isn't moving too well. On March 30 I wrote about the new CBS Radio "YourDay" app, showing hope it would morph into a useable application. Nearly two months down the road and what I see on its Cleveland page is drab, with little that will draw me back to check it again.

Let's all say this together: If the radio industry is to remain relevant it needs to create items of relevancy. Instead, what we have is a continuous stream of denying there's a problem, and even more evidence of staying the course.

There's no end to denial in radio. The release on RAB's revenues for Q1 2012 shows a 1% lift delivered through increase in new media sales, non-spot revenue, and network sales. This isn't low enough to get executives saying "we need to reassess how things are done," though. Instead, what we see in the Clear Channel megaphone, "Inside Radio," is the headline "Radio continues to 'hold its own.'" (Read into the story to complete that sentence by Mark Fratrik, vice president and chief economist, BIA/Kelsey: "...while out-of-home, online and mobile are having an impact on the overall share.")

As an aside, relative to increasing digital revenues in radio: Rumors I'm hearing from multiple sources indicate there's a little smoke and mirrors in the radio industry. Spot dollars are being logged as new media revenue in a few companies, so they can bolster that end of the spreadsheet (and appear more digitally oriented).

I'll repeat something that's been said here dozens of times: There is no easy way to build an online following, and it doesn't come cheap either. If the radio industry wants to make a dent in these next five years - when its fight for the dashboard is going to grow fierce - it had better get its digital house in order.

The misunderstood action of General Motors pulling its ad campaign from Facebook is a classic example of how the radio industry misreads what happens in new media, in hopes of using this for radio's gain. I've seen in more than one trade publication that having GM pull ads from Facebook is an indication of how "Social Media Stumbles." One article, written by someone who (in my opinion) constantly shows ignorance of digital, ends with "A display ad on Facebook is a lifeless emotionless waste of marketing dollars."

Let's set this record straight, and possibly educate too. GM was garnering a 0.02% response rate with its Facebook ads. That's well-below a standard 0.04% response rate for an average banner display, and well below the 1% response rate expected for an optimized campaign (in a targeted setting). GM isn't leaving Facebook, it's merely pulling its advertising dollars. But, that's not the statement needed here. This requires more of a question: What response rate do you give to radio advertising? In your opinion, as a percentage, how many people who are exposed to a radio ad end up responding to it?

Long ago it was explained here that banner response rates were low - it's continually been stated (and shown) that an average response is 0.04%. At the same time, after creating more than 10,000 radio and television commercials, I've stated my belief that a 0.04% response was in the ballpark of what I expect from a broadcast ad. If anyone has figures that show differently, I'm open to listen.

And, speaking of listening, it was quite a surprise to see what Katz 360 VP of Sales, Dean Mandel has to say about GRP pricing. His opening paragraph is indicative of old-line defensive thinking in a new media world. Quoting Mr. Mandel:

"Recently Nielsen announced that they would provide GRP's for Online Video and Triton Digital announced that they would provide GRP's for Online Audio. This was followed by digital buyers and publishers gathering together with pitchforks and torches with crys of "How could you go back to an archaic currency?" and "Why would you use a measurement that has been part of legacy media for over 50 years to measure digital?" By the way, these are the same folks who place a display plan on a blind network at a 50 cent CPM and call it successful if the get a .02% click through rate."

Now, there are a few things wrong with these statements, the most glaring is that final sentence about "...these are the same folks who place a display plan on a blind network at a 50 cent CPM and call it successful if the get a .02% click through rate." No. They are not. Anyone involved in online digital who accepts a 0.02% CTR isn't doing their job, or doesn't know how to do it (see why GM dropped Facebook advertising).

What's puzzling is how anyone can suggest that you can apply a GRP to the internet.

GRP can be calculated only if you have a grasp on the audience "universe," which is impossible online. How Nielsen and Triton Digital are doing it is not by standard definition.

As for "Why would you use a measurement that has been part of legacy media for over 50 years to measure digital?" I'd like an answer to that question, too, especially in light of how new media is measured.

With correctly implanted tracking code you get a breakout of data that resembles this example from a real campaign, exhibiting real dollars and response. Study it closely, and then come back with a reason why - and a way, how - to use a GRP rate online.

Radio cannot continue to claim movement in digital without actually moving in digital.

Let's leave with this example of how the industry continues to exercise a sloth-type movement towards getting people on staff who really understand the digital environment. Radio continues to promote radio people into digital roles. This headline comes from "Radio Online": "Jimmy Steal Appointed Digital PD of Emmis/Digital." Not to denigrate Mr. Steal, who is probably a fine person, but look at his LinkedIn profile - especially the part stating "Well versed in PPM technology, web analytics, CRM, and all around pop culture and music fan."

After 15 years of repeating this, let's do it one more time: You do not understand the digital environment by merely knowing analytics or a customer relationship management program.

Here's a list of internet-related items. Radio industry executives, managers,and programmers need to know how each works if they want to efficiently use an internet business model. This list does not include the many items that have failed or are in the process of failing. Everything listed has become essential for anyone in media, especially those in the radio industry, to know. Scan the list and then sit back to try and pick which ones you should be investing time in, according to your needs. When you see how they all tie together, you'll be ready for implementing an internet strategy. Until then, it's still smoke and mirrors.

Email Marketing
Subscription-Based Data Gathering
Online Surveys
Domain and Visitor Security
Variations in Web Browsers
Online Marketing of Individual Items
Online Marketing Using Bulk Uploads
Search Engines
Domain Name System Relative to Search Engines
Search Engine Optimizing
Search Engine Keyword Ad Buying
Search Engine Content Advertising Networks
Local Search Marketing
Text Advertising
Banner Advertising
Pop Up Advertising
Pop Under Advertising
Flash Advertising
Behavioral Targeting
Internet Advertising Standards
Online Payment Systems (Google Checkout, PayPal)
Web Site Analytics (Google Analytics)
Ad Insertion Technology
Radio Streaming
Video Streaming
Online Ad Networks
Internet Radio Networks
Internet Radio Advertising Sales
Internet Radio Advertising Auctions
Audio Advertising into Streams
Synchronized Audio/Video Ad Insertion
Customer Relationship Management Programs
Online Meetings
Video Webcasting
Peer-2-Peer Networks
Social Networks

Note: Nearly every item mentioned above has different proprietary systems that must be learned to use each effectively. Examples: Google has its own keyword ad buying system, as does Microsoft, which now includes Yahoo!'s system. Ad insertion technologies offer varying degrees of control; hence, you need to study each before making a decision on which is best suited for your use.

By no means is this a complete list. Yet gaining knowledge in each of the above items will help you see how your audience is moving about online, how your advertisers are finding new (effective) forms of getting their word out for less money, and how to use the internet within a business environment. These are essential bits of knowledge that individually give only a portion of the picture. Used together they are the way business is increasingly being done.

BTW: In radio's run to use social networking, check this list of social networking sites; then ask how your station will compete with them.

It's time the radio industry stops following the wrong people, with the wrong answers, and begins hiring technologists who have a grasp on what's ahead. With the dashboard war starting, the time for delay has ended.

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