Last week, I was honored to moderate a great “connected car” panel at the Canadian Music Week’s Radio Interactive sessions in Toronto. Driving just four hours from Detroit, you enter a very different world of radio – a more optimistic, upbeat environment where the medium is vital and very much matters.
Case in point? The front page of the Globe and Mail’s sports section carried this headline, photo, and story:
As Dr. Ed Cohen reminded me, here was a prominent story discussing the monthly ratings of two competing sports talk stations in Toronto in one of the most respected newspapers in the country. That just doesn’t happen very often these days in the States.
When Mark Thompson (formerly of The Mark & Brian Show) joined KSWD in Los Angeles earlier this year, you wouldn’t have known it by reading the Los Angeles Times. And in recent months, his dominance over stations like KLOS and the others in L.A. has generated journalistic crickets. That’s the case in most major markets around the U.S.
That’s not just an indication of how newspapers in the States perceive radio – it’s a larger statement about how radio is being kicked around by just about everybody.
Sort of the Rodney Dangerfield of the media world.
At that same Canadian conference, a group of luminaries took the stage to discuss radio’s future, and Alan Cross (sort of the Canadian version of Sean Ross) moderated a panel that included iHeartRadio’s Darren Davis, Jeff Smulyan, Triton’s Paul Cramer, radio futurologist James Cridland, Jumpwire Media’s Gavin McGarry, and the BBC’s James Stirling.
The conversation quickly moved into “Where has radio gone wrong?” and Davis, Smulyan, and Cridland openly questioned whether that was the right question. Or even a fair one. As Cridland reminded attendees, 90% of the population listens to radio – in the U.S., Canada, the U.K., and in many other countries around the world – a usage level that is leaps and bounds ahead of every other audio platform and brand.
And that brought Tim Westergren’s comments at WWRS late last month. Covered here in JacoBLOG, the head of Pandora talked about how the “one button” simplicity of radio was the envy of other industries.
But there’s a huge disconnect because while broadcast radio still maintains incredible usage and ubiquity, it continues to be “disrespected.” Jeff Smulyan has been saying it for some time 
now, and reiterated it again on this panel:
Radio has lost its cool.
In the past, I’ve simply attributed this to an audience that is enamored with new, digital platforms and services. But now I’m beginning to wonder if radio’s perception problems aren’t more damaging among agencies, buyers, and advertisers than among listeners.
Consumers have many other choices but as we learned in Techsurvey11, but even regular users of Pandora, Spotify, YouTube, and even satellite radio still recommend their favorite radio stations to others at about the same levels – or even higher. Just because they use pure-plays, video streaming channels, and other new media, their attachment to broadcast radio remains solid.
Every week, they tune in radio for play-by-play sports, they yell back at their radios during controversial talk shows, they uniquely inform and entertain themselves on public radio, they listen to familiar favorites on Classic Rock stations, and they discover new music on stations that specialize in Hip-Hop, Alternative, Country, and other genres.
Radio has its issues – clutter, a lack of personalization, homogenization, incessant budget cutting, and stations that sold their local flavor out to voicetracking. But when the vast majority of the population tunes in each week – more than reads newspapers, accesses streams, builds music playlists, or subscribes to satellite radio, well then what’s the problem? And why the lack of respect?
Sadly, it seems to be gaining steam, whether you talk to political consultants, account managers, or other media analysts – an “uncool” perception that is taking root faster and faster – and very much taking its toll on radio revenue, especially if you talk to broadcasters and follow their quarterly reporting.
At a time when the economy is adding jobs, automakers are selling cars, and consumer electronics is exploding, the radio industry should be doing better than flat or down.
It’s a case of cognitive dissonance. As Smulyan once again put it at the Toronto conference, the mainstream medium that continues to post eviable margins and massive usage is somehow losing its cache. And at the same time, the digital up-and-comers that cannot find a way to profitability and appeal to more fragmented groups has a cool factor that is off the charts.
On a recent client visit, I sat with a room of programmers and sales managers who represent one of the biggest and best radio brands in the U.S. The sales execs explained that despite historically great ratings, they were being forced to cave on rates and accept business that is far below the station’s true value. Now most of the time, you hear the blame being placed on desperate, deep-in-debt companies across the street that will accept any rate as long as they get the buy. And while that may play a role in their revenue downdraft, in this case, it feels to me like this is indicative of a radio problem that runs deeper than that.
Advertisers – even on the local level – smell blood. They seem to sense a radio business on its knees, beset by problems that have less to do with how many are listening, and more to do with simply falling further out of favor in the minds of the ad community.
Their growing obsession with digital (even though it is commonly misunderstood) and their need for ROI has overshadow the goal that advertisers should be seeking: results.
Sadly, more and more agencies are missing the great marketing tool that is local and national radio, instead placing more and more of its chips in media that has value, but lacks the reach and even the regularity of AM/FM radio. But it’s easy to point a finger at advertisers who are simply trying to evolve their products and service with the times, looking for new and better ways to connect consumers with their products and services.
Radio shares in the responsibility for not making its case in this environment. Do broadcasters have to be more mindful about accountability to an advertising community that increasingly demands it? Does radio have to move more quickly to provide useful granular consumer data that summarizes a campaign’s effectiveness?
A resounding “YES” to both questions.
But a more unified front would help, too.
At CMW, Michael Hill of Radioplayer talked about how broadcasters in the UK have come together to speak in one voice, working together to uplift “proper radio” (as he calls it) as the great medium that it is. Sadly, it’s just not that way in American radio. Broadcast companies here have uniformly staked out their proprietary turf, their philosophy, and their way of doing business apart from everyone else. There is sadly very little cooperation among some of the biggest players. Erica Farber has the scars to prove that.
But eventually, even the most fiercely independent executives have to see the 60 point font writing on the wall, put their differences aside, and realize that for the greater good, U.S. radio has to work together to admit, address, and solve its growing problems.
Broadcasters could also help its case with a more concerted effort to remind advertisers that, in fact, it is adapting. Streaming, podcasts, mobile apps, social media relationships with fans are all part of most stations’ digital arsenal. But too often, the traditional rankers and rate cards are what the ad community sees.
These “uncool” perceptions and attitudes in the buying community are not coming at an opportune time. Radio should be a more active partner in the country’s recovery, sharing in the victories and progress that are taking place during this economic turnaround.
To suggest that someone flipped a switch, and somehow radio no longer is a viable medium for attracting buyers to new car showrooms, electing candidates, selling smartphones, mattresses, window treatments, and insurance to consumers is a joke.
Rodney Dangerfield made “no respect” funny.
For radio, there’s nothing funny about this.
It’s no joke.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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The elephant in the middle of the radio living room is the near-ineptitude of many radio owners.
To have SO MANY GREAT STORIES ABOUT RADIO, and yet to be struggling on so many fronts, speaks volumes about owners who are dropping the ball, repeatedly.
In almost any other field, stockholders would be holding them accountable, demanding their replacement.
But for some inexplicable reason, what little media coverage there is, seems to focus on how smart and successful many radio leaders supposedly are. Well, whatever,
If they are the-best-and-the-brightest, why does my beloved radio industry continue to underperform, and be under appreciated?
ΔV
It’s a conundrum, Dimitri, and a sad state of affairs. We are going to take a shot at suggesting solutions in tomorrow’s post. Wish me luck.
I think there’s a direct connection between Canadian Radio not joining the homogenization plan that’s ripping through American Radio and their attitude of success and growth. Much of what you said in today’s blog is correct – but my translation comes from Pogo, who said “we have met the enemy – and they is us!” I’ll look forward to your proposed solutions.
Yeah, so will !, Charlie. Thanks for the note and the reminder about self-inflicted wounds.
“Compared to pre-consolidation, today we have the same style of radio programs with the same style of commercial clusters, containing the same – or lower – quality of commercials. Fewer people are on-air communicating with the public. Each person has far more responsibilities, leading them to not do any with excellence.
“There is far less effort being placed into creativity within the radio industry [for programming and commercials], and there remains the same – exactly the same – style of selling this product as existed in the 1970s with Arbitron-based audience boasts.
“The radio industry needs to change – not by forcing an already outdated HD Radio technology onto station owners and the public, nor by stamping its feet that placing an FM chip in a cellphone will guarantee public safety (a questionable statement at best). But by improving the quality of programming to the audience and giving a more accountable advertising system to clients, both of which the audience and advertisers are finding online.”
What has the radio industry improved on since I wrote the above, on July 30, 2012? The answer to why radio revenue and relevancy are dropping is in your answer.
Meanwhile: Digital companies are in a constant state of improvement; all major players do web site and app updates regularly to enhance the user experience – for audience and advertiser.
Ken, there is no question that product, content, and the user experience are all in the crosshairs in this discussion. And maybe the industry’s lack of investment in itself has impacted some of the stations that are still very much on their games and always have been. Reed Hastings recently gave a speech that suggested that TV broadcasters and networks are still in denial about how the Internet has impacted viewership. And in radio, some of those same conditions exist. We will give it our best shot in tomorrow’s post to talk solutions. As challenging as these times are, our only recourse is to look out the windshield and find pathways to success. Thanks for the timely reminders.
I agree with Ken. Radio has hardly been innovative at all. Content and formats aside, radio pretty much sounds like it did twenty years ago. I’d go as far to say that innovation is frowned upon for fear of the reaction by advertisers *and* listeners.
Tory, radio may be short on innovation, but it has held onto much of its audience and still presents a solid deal for advertisers. And that’s the question. Thanks for the comment.
The only way to be cool is to do cool things.
Who reading this is going into work today to actually do something cool on the Radio?
That’s where the rubber meets the road, me thinks.
I think you’ve just challenged a lot of people in radio. (Including me!) Thanks, Jeff.
“Like”
Thanks!
REALLY great read Fred. I know I sound like a broken record on this topic, but the Nielsen handcuffs that this industry allows it’self to be “contained by”, really contributes to this issue as well.
That they do, Dave. We’ve got to get over our internal priorities and see the larger media world. Appreciate the note.
Fred your wrap-up points are spot on – programming & competitive issues aside, we as an industry are horrible as a PR machine. We’d rather be cutting down the competition over $1 a spot than promoting a viable medium.
One point that sticks in my mind as an issue that needs to be addressed, and I believe can be, is the dichotomy between media buyers’ own media usage and that of the general public. (“But now I’m beginning to wonder if radio’s perception problems aren’t more damaging among agencies, buyers, and advertisers than among listeners.”)
A couple of years ago there was a study published, and unfortunately though I’ve tried I’ve never been able to find it again, that showed the difference in usage patterns between buyers and the public. As you would expect, the media buyers’ profiles showed a heavy skew toward the shiny new (ad) objects while the public continues to use ‘traditional’ media to a greater degree than those buyers believe. But guess which ones they buy? Is that properly serving their clients?
I don’t dismiss the problems that our industry faces from those shiny new objects – but hope our industry can get together to trumpet our value as well.
Mark, there’s always been that “gap,” and I remember Mel Karmazin railing against that 7% of the media pie. PR is an issue because every other industry and brand understands its value. We’ll have some succinct ideas in tomorrow’s post.
Newspapers and all other media have never been kind or even fair to radio. How many times in the best old days did a station do something that created a large and positive public spectacle only to be referred to as “a local radio station”. All of us of a certain age have been there.
That said, radio has lost audience, but when you look at all of the reasons (more format options, fewer commercials, customization) that don’t really add up to cool, its pretty clear that most of the defections were do to something other than the cool factor – meaning that Radio has lost more cool than audience.
Where radio has lack of cool has impacted its income is on the sales and marketing side. The marketing part is easy – radio just doesn’t do it anymore. As for sales, less talented salespeople (due to lower pay and restrictive non competes/covenants), lack of competitive ratings usage data and a focus on its own needs (tell its story better vs. learning the advertiser’s problems and recommending a well thought out solution that addresses them) has left radio looking very uncool and out of touch to the people who buy or influence the buying of media.
People like to make data driven decisions and if they a given media doesn’t allow that, they’re hesitant to commit to it. Radio has a wonderful product (its audience) despite its multi-year and ongoing, concerted effort to ruin it. Maybe cooler content would help radio, or maybe radio is were people like go to not be challenged but be comfortable.
If radio sold like its 2015, it might be able to get away with programming like its 1999.
While data driven decisions are being made all the time and there’s no shortage of data, all buying and selling is emotional. And that’s where radio needs to do a better job of storytelling and rekindling that passion for personalities, a sense of place, and all the other things that stations have brought to the party. Thanks for those observations, Bob.
I respectfully disagree with you here. Not all buying and selling is emotional and like most of business, its getting less so. In radio’s prime, more than half of the buying decisions even locally in places like Greenville, SC, were made based on rank position, format and CPP. The emotional part was built much more around the personal relationship between buyer and seller than excitement about personalities or street buzz, although there was plenty of both (personality and street buzz).
Radio’s research isn’t competitive with other media, which makes it harder for radio’s salespeople. And they aren’t as good as their competition (or they used to be) which makes it even harder.
If radio want’s to stir buyer’s emotions, it won’t do it by selling the sizzle (I’m not sure if that ever worked, but it certainly won’t now) it should find out what keeps its prospects up at night and one by one, offer actionable solutions to those problems. That will stir up more emotion every time than a story about what the morning guy did/said.
Radio DOES NOT need to tell its story better. Everyone knows radio’s story because it hasn’t changed in at least 30 years – and that isn’t all bad. Radio needs to creatively leverage its assets in ways that will solve customer problems with solutions that can be measured.
Hi Fred, great insights as always. There is one point you made that jumped out at me, about having to take business that is “far below the station’s true value.” It’s an issue we run across alot: Who decides what the true value is? I think if stations would see that their value is decided by the market, not by them, they might make better business decisions overall. Stations that decide their own “value” and decry those that see things differently end up being defensive about their role in the marketing world, instead of looking for ways to do a better job given the current state of the market.
Dave, I agree that stations can have an inflated or unrealistic of their value. But so often, the equation is heading the other way. Many strong stations have incredible personality presence, great digital assets, and a strong hometown presence – attributes that you can’t measure with CPP or TSL. Thanks for the comment, and adding to the conversation.
Hi, Fred:
While being conservative in a business sense can be a good thing, I think a lot of radio owners are just being too cautious and are too afraid to step out of the mold.
We have one station in our cluster (a low wattage flanker) that, having little to chance with, our management decided to do commercial free weekends on. It’s now top ten in demo. Our flame throwing music station is as healthy as ever and our news talker combo is, relatively speaking, a head and shoulders above the ratings issues seen by a lot of others in the format. But, we have an image on those stations for local news. We do market…and market seriously. You no longer have to be “live” all the time, but you DO have to be “local”.
Some companies have allowed advertisers to dictate shorter spots, which have created commercial clusters which, anyway you size it, “feels longer” to the listener. Sure. it’s the same length of time as before, but 15 spots in a cluster is 15 freaking spots! And woe be it to the poor client who gets the #15 spot in the cluster.
Lastly, I’ve said since the dawn of the digital age, radio has done a terrible job of telling its own story. The competition has its press agents planting stories all over the media about how their product is succeeding and how “radio is dying”. (XM and Sirius led to Pandora, etc, etc.) Radio, as a medium, has largely refused to respond. And look at what’s happened. A lot of radio’s problems are self inflicted. This business needs to do what it used to do best…reinvent, innovate and be willing to be cautious risk takers, and, be its own best cheerleader.
Kevin, thanks for these thoughts and local observations. The user experience in radio leaves much to be desired, especially since digital companies all make it a priority. As Jeff Bezos believes, you start with the customer and work backwards. Maybe THEN, we start telling our story more effectively. Appreciate you taking the time to comment.
Radio sold it’s soul to Wall Street. End of story!
The majority of the US population owned or had access to a typewriter in the 1980s. But as the PC became mainstream, typewriter usage shrank. The technological advantages of the PC were impossible on a typewriter. And Smith Corona never went all-in on PCs.
In 3-6 years, will this be the story of FM?
The majority of the US population owned or had access to an t̶y̶p̶e̶w̶r̶i̶t̶e̶r̶ FM radio in the 1̶9̶8̶0̶s̶ 2010s. But as the P̶C̶ smart phone radio advantages of: the infinite dial, song-skips and personalization became mainstream,t̶y̶p̶e̶w̶r̶i̶t̶e̶r̶ FM usage shrank. The technological advantages of the P̶C̶ smartphone were impossible on a̶ ̶t̶y̶p̶e̶w̶r̶i̶t̶e̶r̶ an FM radio. And S̶m̶i̶t̶h̶ ̶C̶o̶r̶o̶n̶a̶ broadcasters never went all-in on P̶C̶s̶ Internet radio content
Nielsen refuses to update this chart for2013 & 2014. Has the decline become so severe it’s unpublishable? https://goo.gl/jtJvcj
Paul, no one will argue that there’s been erosion and that the challenges continue. So what can broadcasters do to re-energize the industry in the minds and hearts of advertisers – and listeners? Thanks for chiming in.
Yet arguing about the erosion challenge does persist. It’s an A/F sales narrative that’s interfered w/developing an audience growth strategy. Cume still fantastic but Time Spent is the issue. ’13 & ’14 updates to this chart are held tightly by Arbitron (https://goo.gl/qFYjaE). Hiding problem from buyers may save buys for short term. But that sales narrative leaked into audience development strategy (“it’s not a problem, focus on strengths”). In this late hour, solution for bcstrs is following listeners (since FM conceded IP leadership to Pandora/others years ago).
Smith Corona never pivoted to where their customers were going. They never invested in the new PC platform. FM has made minimal investment in IP w/ limited success (iHeartR https://3diz6f2vh2xx4v5zz43owe81.wpengine.netdna-cdn.com/wp-content/uploads/2015/04/triton-ranker-mar2015-leaders.png).
The infinite dial, song-skips & personalization are three revolutionary attributes of the online platform loved by FM listeners yet technically impossible on FM, Those 3 attributes will be used more overtly against FM. Without a serious pivot to mobile IP, the only outcome for FM will be a greatly diminished market.
btw the hyphenated characters in what I wrote were supposed to be “strikethroughs” on those letters – formatting on your blog changed strikethroughs to hyphens…
Paul, I totally agree with you. The same thing happened to desktop computers. Everyone had it and used it until mobile phones entered the market. Recent stats show that mobile usage exceeds desktop. I believe that mobile phones will supersede FM radio as well. The Guardian actually covered the topic in one of the articles. They say that the government can’t make a profit by flogging off the old radio spectrum, Yes, that may not be profitable, but the good old radio will inevitably lose a large part of its audience. The cost of app development has gone down lately, as you can read here, so there will be much more streaming apps like the ones CNET writes about. here. Podcasting has become a huge hit. Everything is going online and mobile.
The real issue is results for clients. You can’t possibly get a result for clients if the bit where the client is (the ad break) is the biggest turn-off factor for the listener.
Clients and AMs and radio owners need to start caring about what is going in to each of those 60 sec (or in Australia – 30 sec) spots.
There are plenty of great radio ad writers out there who are totally hamstrung every day by clients who want to shout, AMs who want any old tosh put on air yesterday and accountant-owners who see no need to resource the creative and production departments with the one thing they need – man-hours … and that means staff, and that means spending dollars on creative as a resource, not regarding it as a cost.
Until you start to make your ad breaks as entertaining as the music and the celeb spots, listeners will continue to turn off the advertiser’s message and advertisers will continue to get lower ROI on radio.
And as long as the ROI can’t be justified against AdWords or the illusion of results from Social Media, radio will continue to miss out or be screwed by advertisers.
Radio needs a creative-lead-recovery. Starting with entertaining ad breaks.
Cam, thanks for taking the time to comment and to share a Down Under view. It has become a universal problem, and while the creative has truly declined over time, radio was able to perhaps get away with a half-hearted effort during commercial clusters. As you suggest, however, the game has changed. Not only is there a strong push toward ROI, but this emphasis on accountability seems to draw even more attention to shoddy commercial writing and production.
As you suggest, some of the issue is on the client side of the ledger. It is difficult to persuade them that better creative would be helpful when they’re getting a result from shouting. But as you suggest, the issue goes deeper than that. Radio may struggle on the ROI part, but it could make up for the deficit with strong, clever, compelling commercials and integrated marketing that would show off the medium’s strengths.
Thanks for keeping this conversation going.
Y bien, ¿qué tal es comparado con Instagram?