The live read.
You've seen the research. They work. And they're far more palatable than most of the produced garbage out there. When a trusted personality talks about a product, service, diet, or treatment they use, it carries a lot of weight. Hence, advertisers pay a higher rate…sometimes a very high markup for these more conversational one-to-one ads.
But as you may have read, the Federal Trade Commission just put its bureaucratic foot down HARD on a radio endorsement campaign that ran back in 2019-20 for Google Pixel 4 phones on iHeart radio stations. All told, iHeart personalities sang the praises of how these smartphones could take great photos day and night nearly 29,000 times.
The lawsuit involved the FTC and seven states where the spots aired. And last week, the two companies settled these disputes for a hefty $9.4 million, with Google bearing the brunt of the fines. Like most live read/endorsement efforts, the campaign was very lucrative. Radio Ink reported Google paid north of $2.6 million for the ads, along with another $2 million for spots that aired “by smaller radio networks.”
Here's an example of one of the live reads in question:
Where did the campaign go wrong? According to FTC's Bureau of Consumer Protection Director Samuel Levine, “Google and iHeartMedia paid influencers to promote products they never used.”
And Massachusetts Attorney General Maura Healey added, “It is common sense that people put more stock in first-hand experiences. Consumers expect radio advertisements to be truthful and transparent about products, not misleading with fake endorsements. (The) settlement holds Google and iHeart accountable for this deceptive ad campaign and ensures compliance with state and federal law moving forward.”
If you're running a radio cluster or you own a radio company you might be thinking, “There but for the grace of Marconi goes us.” Or words to that effect. That's because myriad companies are engaged in the same practices.
In every likelihood, so are many podcasters.
One of the hallmarks of the efficacy of podcast ads is the fact the best of the bunch are read by credible hosts. As they slide directly from their podcast into a live read that sure sounds like an implicit endorsement of a product or service.
Are those hosts speaking from experience? Have they actually used the sponsor's mattress, hair coloring, travel site, or job recruiting service? Were they given the opportunity to take a test drive or experience the advertised goods?
Below is a data slide from this year's Public Radio Techsurvey featuring an audience far more likely to listen to podcasts than commercial radio partisans.
We asked our PRTS respondents who listen to podcasts weekly or more often (and who notice ads) to comment on the effectiveness of host-read commercials. And the results should not surprise you. Commercials voiced by the podcasters themselves are preferred to produced commercials. Progressively younger podcast consumers are especially likely to lean toward host-read ads.
But that shouldn't give podcast producers or radio managers license to just line up host endorsements. As Levine concluded, “The FTC will not stop working with our partners in the states to crack down on deceptive ads and ensure firms that break the rules pay a price.”
I'm not going to go all Oxenford on you, but it might not be a bad idea to review your station or your company's advertising policies and practices, especially as they relate to live and recorded endorsements of sponsor goods and services.
Last week in her “Merge” column in AllAccess, social media whiz Lori Lewis strongly urged radio broadcasters to wise up on endorsements. Of course, she's concerned about the credibility and authenticity of radio personalities.
But Lori is also well aware of the liabilities stations face by being non-compliant with FTC requirements.
She offered up this handy list of dos and don'ts for endorsements. You'd also be wise to check in with your company's legal advisors before signing up a sponsor and committing your air talent.
So, there's the legal liability. But the other issue facing so many stations is simply letting endorsements and live reads get out of control.
At so many stations, there are multiple host-read spots per commercial break. And then there's the issue of an in-demand personality ending up with the lion's share of endorsements on a station.
I hear radio listeners in focus groups talk about how entertaining these “off-the-cuff” spots can be. But when you have a popular DJ singing the praises of a cell phone, a car, a real estate firm, and a window company – all during the same hour each morning – you're stretching the limits of the audience's credulity. It's just not realistic. Nor is it good for your valued ambassadors and their believability.
As difficult as it may be – especially during tough economic times – someone's got to set limits and “just say ‘no.'” Perhaps raising the rates on these personalized endorsements ads would be a smart first step toward solving the problem.
It was Mark Cuban who was credited with famously saying, “Pigs get fed, hogs get slaughtered.” Ironically, his Sharkness and owner of the Dallas Mavericks made his first fortune in radio with Broadcast.com.
These days, most program directors are no longer empowered to set limits on the sales department's ability to place any order they can without running the risk of becoming a “sales unfriendly PD.”
Sadly, the last bastion of protecting stations from the excesses of sales departments running amok has been reduced to cranking music logs and making out the weekend schedule. How else can you explain spot loads that have sprawled out of control while jock endorsements continue to be sold like there's no limit on how many can be voiced?
Like all good things, there needs to be guard rails and policies in place – not just to stay legal with the FTC, but to also stay credible with audiences and to serve advertisers effectively.
Just take it from me.