Earlier this year I bumped into Wayne Campbell and Kurt Hahn from Filmhouse at a convention. If you’ve never heard of Filmhouse, chances are you’re somewhat new to radio. That’s because it wasn’t that long ago that it was standard operation procedure for many stations to head into the spring and fall books armed with a TV campaign. And oftentimes, it was the team at Filmhouse that produced it. These days, the Nashville based company is producing videos for seven-figure homes, innovating in the real estate space.
Today, very few stations are engaged in outside marketing. Here in Detroit, Greater Media is promoting its two new morning shows at WRIF with outdoor campaigns. In a sea of billboards for lawyers and casinos, these radio campaigns stand out in a good way. And on a recent visit to Chicago, it was Hubbard’s WTMX (Eric & Kathy specifically) and WDRV that were all over the Edens, the Kennedy, and the Dan Ryan.
Today, researcher, marketer, and trend-watcher, Larry Rosin – founder of Edison Research – takes a look back and a look ahead at radio and marketing – and the opportunities ahead of us.
Pretty much every day this blog offers creative solutions and new insights to help today’s radio industry adapt and respond to the challenges that exist in these days of radio “austerity.” But one of the reasons we need Fred’s good ideas is he is trying, through the force of his creativity, to counteract one of the most deleterious decisions made by most radio companies – that is the elimination of most or all “external marketing” expenditures.
I often tell people that the total amount spent on external marketing by radio stations these days can’t be 10% of what it was 15 years ago, and no one ever challenges me. So let’s assume that’s right. Can’t at least some of the reason that we are endlessly forced to remind people that radio is not a “dying medium” be due to the elimination of marketing our stations? The fact is that we are not “in the faces” of consumers on their televisions, on billboards, in their mailboxes. I believe that, in fact, the elimination or severe decrease of marketing may well be the single biggest challenge for the industry.
I recently ran across some data that my company produced that does an interesting job of illustrating just this point. I happened to have two surveys performed in a top ten market against the same target (all adults 20-54; English-language only) and using the same telephone sampling techniques exactly ten years apart (note: the 2013 survey has cell-phone sample – which wasn’t needed yet in 2003).
Look at this table:
These are significant: the number of stations that consumers are holding in their heads has dropped dramatically. In particular, when asked to list all the brands one can think of – people on average can list about 15% fewer brands. It’s not as if there are fewer brands out there – it’s just harder to remember them when no one is being reminded.
Curiously, I do see “external marketing” for one radio brand pretty regularly – iHeartRadio. And our 2013 “Infinite Dial” survey we do with Arbitron showed awareness of that brand up dramatically.
When the radio industry gets together to discuss the future, invariably someone will say: “We need to do a better job of telling our story. We are such a vibrant, successful medium that Americans use and love.” I submit that the reason radio’s “story” in the broader world has deviated from the truth is because we don’t have stations selling themselves at the local level.
Every day our sales teams are out telling local companies that if they want to see business improve they should advertise. In an environment where radio stations aren’t just fighting each other but countless online and satellite options, seeing DJs in TV spots or on billboards again would assuredly do more than any other thing to help reverse radio’s “story.”
Instead, radio is increasingly a medium that is both out of sight and, as the data show, out of mind.
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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Larry is substantially smarter than me, more seasoned in the industry, and probably exponentially better looking too. And yet I’ve been saying the same things he says in this piece for at least 5 years now. So if LARRY knows it, AND I know it how come it hasn’t changed yet? “A man who stops advertising to save money is a like a man who stops a clock to save time”. -Henry Ford
Right on all counts, except the better looking part. Mike, it’s a conundrum, and one of the sad outgrowths of consolidation that has sadly become a part of radio’s new marketing scheme. Thanks for commenting, Mike.
Great read Fred and Larry. Here’s the challenge from a street line, GM world.
According to the Arbitron math in my market, at the sold out Luke Bryan show earlier this month, (20k) There were 12 meters in the audience. (and at 2.35 meters per household) less than 6 homes. My country station flew a plane, we had two set ups outside and inside, a phone charging station, two photo booths, banners everyone….and of course, a “leaving the show” video and audio message driving back to the station the next morning. ALL P1 fans to my country station.
I certainly agree with the concept you discuss, however how do we overcome the dynamic that we’re not a retail or commercial entity marketing to anyone from 6 to 66? We’re marketing to a minimal/audience that is sampling our product…and in a PPM world like mine..one that is being measured by actual listening! Thoughts on that one? (Great blog and comments as always, BTW)
Thanks for the comment Dave.
I guess I fundamentally disagree with your premise. Sure, you’re playing the PPM game, but you’re really playing a much broader game for your target, the whole market and the medium itself.
And given today’s reality, anyone who DOES market gets 100% share of voice!
Larry
I hear ya Larry..I’ll just let you call my ownership and tell them we just spent $150k, didn’t move the needle..but the rest of the audience that doesn’t have meters loves us! LOL! 🙂 Have a great weekend!
Just a thought…when marketing for higher ratings using external marketing maybe the station should promote the time frame of the efforts to SMB’s. Agencies buy on past ratings for obvious reasons. Direct advertisers would be better served by promoting their products and services when the station is actively marketing itself. The question of course is whether the station’s sales team can convert marketing efforts into substantial revenue.
Eric, thanks for bringing up an interesting angle and a smart strategy. Appreciate you reading and commenting.
“Why does your station spend so much money on advertising? Are you just trying to hype your ratings?” asked a prospect a couple of months into my first radio sales job. My answer: “…if we don’t believe our own bullshit, how can we expect you to?”
I would phrase my answer more diplomatically now, but I stand by the concept. How can radio credibly claim that businesses must advertise to thrive, when it doesn’t do so itself? Its as poignant a ‘do as I say, not as I do’ as I’ve ever seen.
I saw an column recently that suggested radio’s CEO’s see that the industry is headed for a cliff and that they are just milking its last days for all they can in the short term. I’m not sure about the cliff idea (I think its more of a steady slope down that will level off at about 60% of where it is now in PUR and revenue), but I’m convinced of and am now fully in the milking camp. I understand pulling back when the danger of running afoul of banking covenants could cost you your company. And you can rationalize any bad decision or two at any given time. But radio’s debt ratio’s are much healthier currently and most radio companies are in no danger of missing any covenants.
The total lack of investment, promotion, innovation and escalating rush to consolidate operations and costs further make it impossible to reach any other conclusion. Dumbing down the product in the face of increased competition is well, dumb. And they can’t all be that dumb.
Game over?
Hi Bob,
I’m not quite as apocalyptic as you but surely share you’re concerns. I would be interested to know if advertisers ever do throw this back into the faces of station reps.
Thanks for the comment.
Larry
Spot on, Larry. The scary part is that iHeart is becoming so well known BECAUSE of marketing. I have never understood the reasons for why a local station should invite their listeners to leave to sample another product. Shouldn’t radio be providing reasons to stay (and be remembered)?
Hi Steve, thanks for commenting.
The great lesson of IHeart is of course that radio advertising really does work!
Radio put its muscle behind this brand; the question is whether it will ever put stations back on billboards and on TV etc.
Larry
Hi FRED, Spot on as always; and great to see Buzz Knight and the guys at Greater Media putting some “radio spark” into the Detroit skyline, which has looked a little beaten down in recent times. Totally do not understand how an industry like radio now generally neglects the basic pre-requisite of marketing; moreover radio’s presence online and in the digital space lacks virtually any visual excitement or creative engagement. But then “92% of…” etc remains the mantra.
Hi Lee,
I certainly agree. Thanks!
Larry
larry you’re awesome – one of the best.
the other insidious effect of the vanishing of external marketing: an explosion of on-air messaging/clutter the station does to compensate.
we’ve turned almost exclusively to constantly pounding on-air messages – in effect abusing our best customers.
we do this because it’s cheap and easy and it makes us feel like we’re “doing something”.
plus – we feel justified because research tells us the best chance to move the needle is to get a few more minutes from the people already listening. we hear that radio doesn’t have a cume problem – it’s all about TSL.
we can debate if pounding our listeners with messages between every song actually increases TSL another time.
but really – it’s this about money?
corp won’t spend the money because without regularly trimming 6% off expenses they can’t stay ahead of the steady decline in top line revenue and keep shareholders from revolting.
and larry – because of your proximity to power – isn’t it really up to people like you to help shape and influence the attitudes of radio’s leaders?
every time I do it – I get a tentative handshake and my name quietly removed from the invite list.
😉
Hi Jeff,
You clearly think I’m way more powerful than I am. I’m just a humble observer same as you. Thanks for the great comment!
Larry
Fantastic article…as always. Excellent points all around. I also appreciate the great comments above.
Balancing the short term obligations with the long term goals to maintain a vibrant entertainment brand has to be one of the biggest challenges for today’s managers.
Focusing on the short term, the decision to hold off marketing in a particular quarter is often because of slower than anticipated sales. If competitors are silent during that time there’s a decent chance to maintain the existing rating point within the target demo. No harm, no foul. The challenge occurs when competitors are not silent and the rating point takes a hit while the competitor’s rating improves. We see it often, a tenth of a rating point improvement can mean hundreds of thousands of dollars in additional revenue each month. Spending a fraction of that is often a ROI that reaps rewards. At the same time, losing a tenth (or two-tenths) can throw off the top line budget significantly. This is the dynamic we see in many markets. One or two groups marketing and improving revenue while others are maintaining or on a downward slide. Difficult to grow revenue if the rating point is in decline.
But your point in the article is more about the long term. With so many entertainment choices, why wouldn’t the industry want to market their relative advantages? A radio station is only as successful as how substantive it is within the listening landscape. Some formats are very mass appeal while others have a tighter niche. Because of this, it’s important to understand the target and be realistic about objectives as to what role that target plays within the big picture of the market place. That being said, growing the audience affinity to YOUR differential advantages is better than assuming they will stick around when others are trying to court their attention.
Although the degree levels vary, silence is damaging in both the short and long term.
Great points, Tim. Part of the issue is a relatively clear mutual agreement by all radio companies to disarm. The examples Fred can list above stand out because they are so rare these days.
As I showed, out of sight will lead to our of mind, and this is dangerous with new brands coming in to make things even harder.
Thanks!
Larry
Thanks for writing this Larry!
Those who have bucked the “disarming” have had a great couple of years. A couple tenths of a rating point go a long way to relieve the short term pressure on a manager. Continued focus…and the long term pressure should fade away as well.
Bravos, Larry. Great post. Please allow me to respectfully disagree with your suggestion that investing in paid media (TV and outdoor)would “do more than any other thing” to help Radio’s story. If any one thing could help radio it’s content which gets people talking and puts radio into the conversation again. The play’s the thing.
The world has changed since those halcyon days of contesting, promoting and advertising for the book. We may not have the language to accurately describe what’s going on today but the author Nicco Mele has proposed the term “radical connectivity” to characterize behaviors in our brave new world. The Old Scotchman McLendon taught his managers the secret of successful marketing…”get people talking about your radio station.” Our product value proposition needs to be strong enough to deserve attention. Once we give people something to talk about they’ll put us into the conversation, they’ll help us to tell our story in ways not previously possible or even imagined. The power of unpaid media (earned and social)is helping to build empires from scratch, little or no marketing budget required. Witness Facebook and Twitter. Each receives free promotion daily via practically every media outlet. Moreover, we probably first learned about those platforms from a story told us by someone we know, trust and/or respect.
In closing, one point which should not be missed here. The Chicago Hubbard team comes to work everyday to commit great radio, they make considerable investments in what’s coming out of the speakers and on the screens. They give listeners something to talk about, reasons to listen longer and reasons to listen again. Yes, they’re using paid media but it’s to gain the attention, of listeners and buyers, to products that matter.
I can’t disagree with your point at all Dave. I can’t suggest “putting DJs on billboards” if there are no great local DJs to put there.
I wish I could take the whole US radio industry on a field trip to Australia where I recently started working with a group. It would amaze people to see radio done the way you imply.
Thanks for commenting!
Larry
And I get a charge out of the fact that some of the WTMX Eric and Kathy billboards have in the lower right hand corner the words “Seacrest Sux”–something that would never be allowed under TMX’s old owners.
I came here to make a comment but Bob Bellin did such an excellent job of making my point~ I will just say “ditto!” Good comments by all.
It is discussions like these that I’d love to have during the RAB cocktail hour in Sept…
Perhaps this will be my new cocktail trick: 10 radio industry trends upon a spinner board, a person spins & whatever topic the spinner lands upon, that is what me & my new friend will discuss as we nibble upon the shrimp that has been delicately speared by tooth-picks…
Thanks Jacqueline !
Name the place and time and I’ll happily attend that cocktail party.
Larry
Not the first time I’ve heard of this dichotomy. If you build it, it will come. But you need to TELL them you built it. Good thinkin’ Fred.
Dave, would love to take credit for this one but Larry Rosin wrote the words and I gave him the soapbox for today. It’s a great theme and I’m glad we got such a passionate response. Thanks for taking the time.
Fred – thank you for sharing your platform and Larry for sharing your research – great discussion. It’s really important these conversations are taking place.
Mr. Martin’s comments are really on point here (content in context is king). We also live in a world now where one must know the “cost of customer acquisition”. It’s why digital companies ignores traditional media channels especially at startup. Investors expect to be able to document “how much are you going to spend to get how many customers on site”…real ROI and they’re not funding startups who can’t give them that information.
They are not without their challenges either. Dave McClure @500 Startups went on a rant this week on how functionally illiterate Silicon Valley is about marketing. His strongest point IMO was – “btw the marketing skills I’m talking about aren’t traditional ones–they are critically joined @ the hip 2 product development and usability”. In radio’s case that means talent with relevant, share-able content every day. Out-of-site has little to do with out-of-mind if our content has the ears passionately engaged. Our own air is our best marketing tool if the message is personally relevant. Just answer the question “what’s in it for me?” and listeners will join up. Radio can improve here.
It’s ironic that digital companies, e-commerce businesses for example spend a significant amount of time and resources building email databases as a primary and on-going life line to their customers. Everything old is new again…new research by Custora says customer acquisition via email has quadrupled over the last 4 years. A personal email with a relevant offer or engagement (not a promo) from a station they love or an air talent they adore will do more for brand building than any outdoor. No one’s looking up these days anyway they’re all texting…
Mike, as always, you bring great perspective to the conversation. Thanks for sharing your views about how marketing can take many forms. Today’s tools didn’t exist back in the Filmhouse days so you either rlbiufht outside marketing or you hoped Channel 7 would cover your morning show’s stunt. Thanks for adding your thoughts.
Great post, Larry and thank you Fred for shining light on this issue that we are constantly discussing with our clients at Coleman Insights. In fact, as far as back as 2004 we raised this issue when we put out this press release…
https://bit.ly/16OjWIj
Maybe if enough researchers and consultants evangelize on this, the message will get through. (A boy can dream, can’t he?!)
Warren, thanks for the perspective. There are times when I’ve heard clients interpret the message to market as “Why are you trying to spend my money?” or “Can’t you guys come up with great things that don’t cost money?”
Spent and deployed wisely, great marketing builds brands and awareness – not just with the audience but the other constituencies that matter: communities and advertisers. Isn’t that what propelled satellite radio when it first launched? And isn’t that essentially what Pandora, Spotify, and others are trying to do right now/
Thanks again, Warren.
Between the column and the comments, great food for thought heading into the long holiday weekend.
The competitive landscape is constantly changing, that’s nothing new, although it seems to be moving faster and faster. Just a few short weeks ago, Google and Apple’s audio platforms didn’t even exist. I believe radio’s up for the challenge, especially competing against monthly subscription platforms.
Back in high school, one of the best lessons I learned from the Jesuits was that when looking backward, you can see how the pendulum swings back and forth over time. With history as a guide, it helps evaluate where we are today.
As this column and comments point out, there is currently an overall lack of investment in marketing across radio, but as move back towards the center, there is a tremendous opportunity to leverage our best asset in these efforts, which is our audience. In the digital age, Word of Mouth remains a critical component to an overall marketing plan and these relationships help set radio apart overall.
Andrew, another mention of the power of word of mouth. The world has changed – thanks for the timely comments.
Admittedly, I am somewhat biased in this discussion. Having spent the better part of my last 25 years
working with some of the biggest stations on the planet on developing their TV imaging.
I would love nothing more than for the pendulum to swing back in a positive direction where stations
built great brands and then re-inforced that with compelling and unique TV marketing.
I’d also like to add that just stringing a bunch of videos into a :30 isn’t going to move the needle in 2013 –
you have to develop creative that stands out and cuts thru the noise!
Very interested in reading and hearing more feedback on this topic —
Leave you with this thought. When Berkshire Hathaway bought Geico they were a languishing insurance
company and then the launched the Geico ‘gecko” on the world — the power of TV marketing!
Dave, thanks for the great perspective from a guy who’s been there. And the Geico story is a prime example of how clever marketing can turbocharge a brand.
Great post, Larry. I’ve enjoyed reading the various perspectives that have been offered. Unquestionably, we’re all faced with diminishing marketing budgets. And I would also submit that the very way that we “market” our station brands is challenging us to be smarter about the process.
However, a great ad campaign – regardless of the method used – that leads someone to an uncompelling and irrelevant brand experience (read: radio station) is money wasted every time. So get your house in order first. Then tell the world, whether it’s WOM, social marketing, TV, outdoor or interns wearing sandwich boards on street corners.
That said, we’ve been using outdoor for both of our stations in Nashville for years. Yes, the budgets are smaller so we just find ways to be more strategic…and, above all, more creative. The tangible results show up in two areas: we see incredible awareness for our campaigns in our research and, by no coincidence, both stations are consistent winners in the ratings game. Yes, advertising does work.
Dennis, not sure that Larry will be able to get back with you over the weekend, so…
Like the Hubbard example, you guys have done the hard part: research, investment in talent, and consistent staffing – all of which adds up to brands that are ready to market. As you point out, that’s a key difference and probably a big part of your cluster’s success. That’s also what sets South Central apart.
Thanks for taking the time to comment. We appreciate you reading our blog.