I'd bet that no one in radio has led more sales meetings in the past twenty years than Paul Jacobs. Not surprisingly, Paul comes out of radio sales, first at the legendary WNIC in Detroit when it was run by Ed Christian years before his Saga success. In the late '70s, Paul moved across the street to the equally legendary WRIF where he worked together – me in programming, him in sales.
Paul went on to become a GM, first in Dallas, and then back in Detroit at The Fox. In the early '90s, he joined us at Jacobs Media, where he has defined how consultancies like ours help clients convert their ratings into sales.
Paul is a tireless champion of radio, and he's an outspoken thought leader about how the medium should be marketing and monetizing its brands. He's a cheerleader, a format champion, but also a realist. Paul has studied every conceivable cluster sales configuration, shepherded stations through the bad books and the good ones, and guided brands through format and staffing changes. Along the way, he's heard every possible excuse for failing to make sales goals.
In today's JacoBLOG, Paul addresses a key problem faced by radio sales organizations, commercial and public: how to effectively monetize digital assets and harness the power of radio's brands in a rapidly changing media marketing environment.
He ain't heavy… -FJ
On my first day in radio sales (in a decade that shall not be named), I was handed the most recent Arbitron book and told to learn about my radio station so I could sell it properly. One of the reasons why I majored in TV/Radio at Michigan State (later renamed Telecommunication) was there was no math requirement, so it took me a little longer than usual to realize the station I was working for – WNIC in Detroit – had a .6 share. Not average ratings, but 12+ share. The demos weren't much better. So I hit the streets selling my station, and if I was lucky, I would close a couple of deals each week for a few hundred dollars.
Then lightning struck. WNIC was programmed by the legendary Paul Christy, and in the next book, we zoomed. I don’t remember the exact share we had, but I certainly recall the phones ringing…a lot. And within a few months, I was driving a new car, wearing better suits, and thinking that I was the greatest radio salesperson in the world.
At one point, my dad pulled me aside, expressing his concern that my success was coming too easy, and that it seemed like I was gliding through life. He was right. I was. “Detroit's Nicest Rock” was a success, and so was an entire staff of happy young salespeople.
I didn’t know how easy I had it – I had one thing to sell…PERIOD. And if programming came through, if I did my homework, and if I maintained good relationships with my clients, I was successful. Very successful, especially for a guy just out of college.
Fast-forward to today. One of the biggest complaints I hear from management and CEOs is that while they’ve invested heavily in digital platforms, new websites, mobile apps, and more, revenue hasn’t come close to making these efforts break even. We often hear the phrase, “trading analog dollars for digital dimes,” and it’s all too apparent that at most stations around the country, it's true.
Digital is the present and the future. But so few of today's radio sellers can truly claim to understand the space, much less communicate its value to advertisers. Ask any sales manager and she’ll tell you that if she’s lucky, 20% of her sellers truly have their heads wrapped around digital. Despite the fact that RAB revenue data show that online assets from websites to mobile to podcasts are where the dollars are headed, radio sales organizations are still caught up in selling “spots and dots” – :60s, :30s, and :10s.
You don't need me to tell you that 20% is not a solution. It's not even close to good enough in today’s environment. At radio's new competitors like Pandora, 100% of their sellers are experts in digital. That's their main product, their Holy Grail, their bread and butter. And since dollars are shifting to digital rapidly, a staff of salespeople – many of whom are struggling to convey their station's integrated marketing story – partially explains why radio is often barely able to move the new media needle.
Success in the space comes down to three things – expectations, training, and culture.
On the programming side, PDs are no longer expected to simply schedule logs, aircheck talent, and design contests. Today, a PD is involved in publishing (website), database marketing, event creation and fulfillment, social media, mobile, and more. Even though most have not been trained in these areas, they are expected to know how to ensure their brand is reflected well in all digital channels. Or should we say brands, because many are programming more than one station.
But have the expectations truly kept up on the sales end if only two in ten salespeople truly “get it?”
A recent article in The Media Briefing by Peter Houston addresses this issue, and while his piece is written about publishing, it could just as easily have been focused on the radio business.
In the article, Raoul Monks, the founder of Flume, a sales training and consulting company, talks about the changing dynamics of sales. Writer Peter Houston quotes Monks, who points out that “historic client relationships are no longer a guarantee of success. (Monks) says many media sales people struggle with the new sales reality — a harsh reality — where what they are selling actually needs to work for the client.”
And the money shot Flume's Monks:
“Today, it’s not just what you are selling to the client, but what it actually does for the client that matters.”
This was a theme we heard at DASH last fall, as David DiMeo, the leader of Ford Direct clearly stated that radio’s reliance on ratings was limiting its potential with local Ford dealers. Dimeo, who directs how Ford’s co-op dollars are spent by the dealers, put it succinctly when he said, “I don’t want to pay for ears. I want to pay for actions.”
In other words, ratings provide him with an estimate about how many people are listening, but don’t tell him a thing about the ROI on his ad spend. And he notes that most traditional media sellers aren’t thinking that way.
Every radio salesperson needs to be fully trained on how to sell digital, or radio will miss opportunities to grow revenue. Being too old, having relationships with traditional media buyers, or simply not being into selling digital is no longer an excuse. There is too much money on the table to set expectations too low (imagine if a program director told his general manager that he wasn’t into social media so the station wouldn’t participate in it?).
Goals and bonuses need to be firmly established so that every seller understands the station’s priorities. If they hit their spot goal but not their digital goal, they get no bonus. Call me a hard-ass, but after dealing with literally thousands of salespeople in my career, that’s what motivates them.
Job descriptions need to be changed for all future hires, requiring knowledge and experience in digital sales. Too often, I see a roulette wheel of experienced salespeople in many markets, jumping from cluster to cluster. They are often being hired because of their relationships. While these have value, they are still too limiting especially if radio is unable to grow the business by adding a digital component. Pre-existing connections with advertisers is important, but so is institutional knowledge about the changing media environment, and how radio offers something very special. Even veterans need training. In fact, veterans are often the most in need when it comes to digital education.
Finally, the culture of the sales department needs to embrace digital. Salespeople need to be as aware of social media and streaming activity as they are about Nielsen monthlies. Every sales pitch needs to contain a digital component. And each seller needs to be required to know more than the media buyers at the agencies they're calling on. They need to have equally strong relationships with the digital directors, planners, and the account executives because this is where key decisions are being made.
Looking back, my job at WNIC was easy. I thought I was working hard, and while I was pretty good at what I did, I was as good as the station's last rating book. I had one job: sell radio. Clients didn’t have many other options, so as long as consumers were listening to our station in sufficient numbers, I did fine.
Today, it’s not so easy. Sellers have many jobs, just like program directors do.
The 20% solution is just not good enough anymore.
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Tom Yates says
Paul – Absolute dynamite…great stuff and much appreciated.
Paul Jacobs says
Thanks, Tom. It’s such a big growth opportunity that I hope this is a good motivator.
Jeff England says
Spot on Paul!
Paul Jacobs says
Thanks, Jeff. It’s time to make digital pay off.
Bob Bellin says
Late to the party here – but if what we sell has to actually work, then shouldn’t radio concentrate on building critical mass for its digital products before trying to hard to sell them?
For the most part, there just isn’t enough audience for radio’s digital products to be worth much to most advertisers. Perhaps radio’s sales forces understand digital better than they’re given credit for and that’s why what digital revenue exists is just moved over from terrestrial.
I agree with everything Paul said here – except there just isn’t the product to back up the need at this point. Maybe its time radio moved on from the babe of the day…
Fred Jacobs says
I’ll let Paul comment as well, Bob. It is spotty. To your point, many stations don’t have great digital assets to begin with. But in other cases, we have clients that are advanced when it comes to web video, social integration, and podcasting. Yet, so many struggle to put it all together. As Ford’s Mark LaNeve implored broadcasters at DASH last fall, there’s a crying need to not just walk into agencies with a spot schedule. Advertisers want digital integration (even if they often don’t understand exactly what that is). Thanks for the comment.
Paul Jacobs says
Great comment, Bob – I only disagree with one thing. Digital for radio doesn’t need critical mass. It needs data that can be sorted and parsed for the right clients. It isn’t about 400,000 cume. It is about the right 400 or 4,000 people that can be tracked by clients.
Fred mentions DASH in his comment. We did a panel with car dealers, and their number one goal with their advertising is to set appointments. They know if they can target the right customers digitally and make X amount of appointments, they’ll sell a certain amount of cars.
Additionally, major dollars are shifting to an ROI measurement – advertising that can be tracked – versus a huge “estimated” ratings number. They want to know what they got for their money. So yes, radio needs to ramp up their overall digital numbers in order to be able to deliver, but they need to also look at what is different about what they are selling.
And that’s one of the points of this post – in radio, we know how to sell big boxcar numbers. Size matters. Selling digitally requires training so the sellers understand that they are dealing in different dimensions and “cost efficiency” means something totally different.
Of course, having huge digital numbers don’t hurt either!
Marty Daniels says
Fred Jacobs says