Radio Industry Essentials for 2009
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Next year will be very interesting for the radio industry. Like the Big 3 automakers, radio has had its foundation shaken so badly that the industry is left with a "change or die" future. Please note that I do not use "die" in a literal sense. "Die" here represents a severe lowering of public respect and responsibility, a drop in value to its customers (advertisers and audience).
Radio will still be in existence two decades from now. However, the local radio industry will find itself so integrated with a world-based community of audio programs that its local footprint will be minimized to just above worthless. This creates the strongest argument for a terrestrial radio manager to begin a campaign to advertise local businesses to the world.
Offering only local advertising won't provide enough revenue to survive, even with national ad dollars as a sideline.
Please tell me if you disagree with this personal observation: Nearly every local business that is large enough to advertise on the radio has a web site. Now see if you also agree with this: There are thousands of businesses with web sites that are too small to advertise on the radio.
Audio has been, and always will be, what radio is about. But it's time to reject the concept of audio being all that radio will ever be.
There are over 6 billion people on planet Earth. An estimated 1.4 billion are connected to the internet. If you want to discuss only the U.S. population of 337 million, 73.6% of them are online. America represents only 17% of the world's online population. Imagine being able to tap into the rest of the world's English-speaking markets. Rephrased: Imagine being able to help local businesses with web sites tap into the world's English-speaking markets.
The radio industry needs to start thinking big and bold, much bigger than the confines of its broadcast signals.
It needs to be much bolder than the cheapness of blue humor, liner-card jocks, or no jocks at all; BOLD, as in attempting ways of making things happen that are different.
No experiment will guarantee success. But, radio is now in a position where following its course of slash and burn will cheapen its main product to a point of diminishing return. Radio's main product, in this case, is not content but the air time that advertisers pay for.
Entering a new year with unchanged concepts for its advertisers is unacceptable. The radio industry must go beyond a simple "we play commercials" mentality and morph into a media which advertisers need today. Radio needs to experiment, to reach out for success.
Even if 234 million Americans tune in to radio once each week (from the upcoming RADAR 99 National Radio Listening Report), they (along with advertisers) aren't giving radio anywhere near the same level of respect as they did only a generation ago.
It is this respect that is valuable, and it can be regained. But, to maintain status quo and claim that business will turn the corner in spring of 2010 reminds me of those famous qoutes created by RAB's Gary Fries. All were delusional statements, and they seem to be typical of what radio industry leaders continue to rely on.
The time for talk has ended. Here are my thoughts on what's needed in the coming year. Let me know your opinion.
- Executives and shareholders must accept the simple concept that the radio industry no longer generates 40%+ profit margins.
- Management concepts from the past fifteen years need to be rejected. For example, it is physically impossible for one person to program multiple stations with efficacy.
- Radio is selling yesterday's concepts in an advertising world of promising tomorrows. What's desired today is measurement. You won't win a war against it with estimated audiences as your only alternative.
- Impressions can be bought anywhere, at a much lower rate than radio is asking.
- Radio sales managers need to reconsider what the internet represents in the sales process. It has expanded potential in ways that many radio executives do not comprehend.
- Analytics and metrics are not only useful in defining success for campaigns, but also for improving content.
Radio has the potential to be anything it wants online. Doug Perlson and his team at TargetSpot are showing everyone this road. Through its affiliation with the knowledgeable Eric Ronning and Andy Lipset, Targetspot is building a world network with reach into local markets for advertisers.
But, there's still thousands of local businesses waiting for you to help them explore what the internet has to offer in online marketing.
For 2009, I suggest radio refocus its ad sales and deliver the online world to a local advertiser.
It's lost opportunity for a radio industry sales exec to walk out of a local business owner's office without an agreement to help them market online.
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