Sound Online Advice New Media Analytics and Metrics for the Radio Industry
Archive Receive Newsletter

AG News: 11/25/2008


Change is Becoming Radio's Only Option

Is there any reason to go over why prospects for the radio industry look so dull? October Local & National Revenues were down 11%. It's the eighteenth consecutive month of declining revenue. Analysts are lowering expectations for 2009 to an even more abysmal level than they previously pegged. And, the most telling sign to date is Cumulus Radio CEO, Lew Dickey, publicly stating that further radio consolidation will claim another 50% of current owners "within 36 months."

1954 is being labeled as the last time radio was in this degree of dire straits. To some, revisiting that time generates a "we beat the doomsayers then, we'll beat them again" mentality. But times have changed. What saved radio back then was not television's lack of power to cheapen radio advertising rates. It was the automobile, and a nation changing from a sedentary lifestyle to a mobile one via those new roads called Interstates.

In 1954, radio also changed from a media of syndicated programming to local air personalities. Another huge difference was in the presentation of programs, and a change from sponsorships to commercial breaks. Radio took it up a notch that last time it was challenged.

Today there's a different style of disturbance in the air. It's one that's generated from multiples of choice being offered at the peak of radio's programming systemically changing for the worse. Options in a new media world are wider than options found on the radio dial. While those over 35 are slowly making discoveries online, to the 34 and under crowd there's nothing to "discover" online. It's just "there."

Today is not 1954. Though it can be done, pulling radio out of a nosedive isn't going to be as easy as then.

The bad economy is a reality, though the mindset generated by it is flexible depending on whose mind is used. This tightening of the advertiser's belt is a good thing if it forces old ways to change. If advertisers are demanding more from the dollars spent, changing your business model to fit these new needs is really all you need to do to survive.

Let's take a few assumptions here, and you let me know if I'm wrong:
  • In markets 25+, 80% of radio's local advertising clients are sporadic, placing less than two thousand dollars a month.
  • More than 80% of your station revenue comes from over-the-air commercials.
  • The vast amount of your radio station's web site banner ads are sold at a CPM rate.
  • There is nothing in your over-the-air rate card that ties broadcast into the web site, into response, where cost-per-action is the basis for payment.
  • The vast, vast majority of stations have no local-staff online expert - and that term is used literally.
  • If there is a local-staff online expert, he/she more than likely is responsible for multiple web sites and other online initiatives.
  • There is no person on your staff who knows (most probably, who has ever seen) what search engines offer in local keyword ad buying.
The above points are brought up because of a sentence in that article featuring Cumulus Radio's Lew Dickey. Reported to think radio's sales culture is to blame for falling revenue, he makes this statement: "I believe the cure for this affliction is to revitalize our sales staffs and transform them into organized teams of demand creators, not demand responders."

Only (and this is part of that programming change mentioned earlier) creating demand means you need people who can execute the plan. At the rate people are being forced out of radio, the industry is left with an army of sellers for product that can't be generated. This claim is for both the programs and commercials that flow from a station's transmitter.

It's time the radio industry let go of the past and co-mingled its on-air/online programs, using one to emphasize the programs and commercials shown on the other.

Think of the money saved in Arbitron fees if a station begins selling airtime based on a response connected to its or its client's web site. Think of the ability to expand your station's horizon from "local" to letting advertisers reach a worldwide audience and sell them products online. Most importantly is the need to think about how advertising is changing amid a demand by advertisers to account for fewer advertising dollars.

It all goes back to accountability. If you take $100 from an advertiser and prove that they got $140 back, they will return with $200 for your till.

Radio has no option but to change; its audience already has.

















About Contact Indie Artists Radio Stations Audience Data Privacy




President, Audio Graphics
Ken Dardis
Online Since January 1997



Radio Industry News
All Access
FMQB
Holland Cooke Media
Radio Ink
Radio Business Report









Search Audio Graphics

Search Web
Check Google News
for stories on:
Analytics & Metrics
Advertising
Advertising Analysis
Advertising Metrics
Online Accountability
Media Buying Online
Local Search
Radio Industry
Radio Advertising
Internet Radio
HD Radio
Satellite Radio
Online Radio

Actively Streaming Today