Today’s guest post from Paul Jacobs is a continuation of yesterday’s discussion about the limitations of ROI, and the need for a better and more meaningful way to evaluate brand connection. This conversation was spurred by an AdAge think piece by Epsilon CEO Andy Frawley, and you can read that post here.
Frawley writes about the importance of a new measurement called ROE2 which stands for return on experience x engagement and it speaks to a brand’s ability to connect with its audience.
How all this plays out in the sales arena is the central question. And Paul is a veteran of lots of sales meetings, and has seen the good, bad, and the value added. And today, he weighs in on what this means to the revenue generating end of radio stations.
Tomorrow, we’ll take a look at this new interpretation of ROI from Lori Lewis who, of course, comes from the social media side of the street. – FJ
Earlier this month, our local public television station ran a locally-produced documentary called Made In The Motor City. For those of us who grew up in Detroit, we were treated to all of the great brands we experienced in our youth – mostly foods like Coney Island hot dogs (it’s a Detroit thing), Vernor’s Ginger Ale, and Sanders Hot Fudge. You had to live here to know what I’m talking about, but that’s the point.
And then, right in the middle of the program they featured a truly unique, iconic brand from Detroit – WRIF – the station where Fred and I worked (and we continue to consult). They showed many of the things that made WRIF an icon – great talent, innovative television commercials, the “D.R.E.A.D.” card (anti-disco, of course), outstanding events, and more. But beyond the memories, the show demonstrated that a great radio station is so much more than its ratings.
A great radio station has a relationship with audiences and a city that is priceless. You may not be able to see it on a spreadsheet, but you know it when it’s there. And take it from me, it’s fun to sell.
In 2015, there continues to be outstanding radio stations that do many of the same things we did at WRIF, and we are fortunate to consult many of them. But too often, we hear from clients that despite consistently stellar ratings in money demos, bigger than life morning shows, and “live and local” personalities in all or most dayparts, they are experiencing trouble achieving their revenue goals.
Why is this happening? It starts with the fixation on ROI (which is a nice way of saying, “hitting the cost-per-point”) from advertisers, and then the sales staffs ceding their value proposition by attempting to hit that pricing threshold.
Cost-per-point goals are the killer for great radio stations because they commoditize radio into a single metric. So an iconic station is on the same footing as a music machine with voice-tracking coming from San Antonio. And when that music machine station bonuses a second station just to get on the buy, the quality of what a great station can deliver gets crushed by the metrics.
This fixation on ROI also mutes radio’s advantage over pure-plays like Pandora or Google search. When was the last time someone told you about a great search experience? But I bet they repeated a bit they heard on a morning show, a profound quote they heard in an interview, or shared a song they first heard on a great music station.
While pure-plays may have an edge (and this may only be temporary) with specific demographic targeting and geo-location, radio’s advantage trumps them significantly. Pandora, SirisuXM, Stitcher, and others provide virtually no memorable user experience outside of a music stream or a bland channel. There’s no human connection. No passion. No laughs. No information that makes you sit up and take note. All things that great radio stations provide that increase its ROE2.
Stations that are on their games engender emotional relationships. Great local concert coverage, emergency news, a morning show encounter, a charity drive, a comedy club event, a Christmas wish, a backstage artist opportunity – all are the types of experiences that high-performing stations can provide that are simply not possible for digital competitors to pull off. And these are the attributes that are simply unaccounted for in ROI metrics.
Sadly, we’ve seen a decline in the number of great live-and-local personalities on the radio at a time when this “secret sauce” is what separates a living, breathing brand from an algorithm. Radio has allowed itself to get into an ROI battle, thus diminishing the very elements that sets the medium from the pack and makes it more valuable to advertisers.
I thought of some of those great radio stations when I first read Andy Frawley’s ROE2 article because iconic personalities and brands deliver exactly what advertisers want and need – the ability to create an attachment with a consumer. This is only possible through high-level engagement and the experience that only a radio station compelling enough to motivate listeners to tune in every day to hear what’s coming up next can provide.
The money line in this article is a sales pitch for great radio stations that must rise above pricing and rating comparisons if they want to thrive:
Experiences shape how consumers feel about brands,
including factors such as service, quality of products and amenities.
Voice-tracked music machines can’t deliver that kind of experience – or value – regardless of what they cost or their supposed ROI.
Great radio stations can provide talent that listeners want to see and hang out with at events. They engage with listeners on social media as humans and have conversations. Great radio stations set the agenda for what people in your market are talking about, have newsmakers and celebrities on the air, and entertain as well as inform.
And many advertisers have acknowledged the value of great personalities by paying more for live reads – the value of their endorsement is worth a lot. In an ROE2 world, that old ABC cliché – Always Be Closing – should become “Always Be Connecting” because that’s what reps do best when they have a great tool kit.
So it’s time for salespeople at big radio stations (even in small markets) to start acting that way. Instead of negotiating on price, focus on what separates your station from the pack, and highlight the experience and impact your station has that the music machines cannot.
Bring your big talent to pitches. Use videos of your events and talent to showcase what makes you unique. And create an internal culture that is not going to allow your station to be compared on ratings or commoditized by ROI – whether yours are good, mediocre, or low – and focus instead on what’s most important – the impact on and the relationship that you have created with your audience that does what advertisers prize most – results.
The bottom line is that any radio station can hit a cost-per-point, no matter how mediocre they are. But great radio stations can provide something money can’t buy – that outstanding connection with an audience because of the consistently excellent experience that happens day in, day out.
It’s where you make the case that experience and engagement matter and will better serve your clients and your advertisers. Fully formed stations have all the weapons. It just a matter of putting it all together to help the client reach her goals.
It’s called sales.
After a brief stint working for the William A. Robinson marketing services agency in Chicago, where he created campaigns for Philip Morris and Seagram's, Paul struck gold when he was hired as an Account Executive at WRIF-FM in Detroit. This experience launched his sales management career, and four years later, he became the General Sales Manager for KZEW-FM in Dallas, and ultimately, the General Manager for KHYI-FM, also in Dallas. He was lured home to run WDFX-FM in Detroit, before joining Jacobs Media as its General Manager in 1991.
Along with overseeing the day-to-day operations of Jacobs Media, Paul’s main contribution has been the addition of sales consulting services. As an expert in all Rock formats, Paul has made Jacobs Media clients’ untold amounts of money by aiding them in their understanding of how to sell, market, and position their formats via sales training seminars. He has conducted hundreds of client presentations on behalf of Jacobs Media clients, and has aided the Ford Motor Company and Procter & Gamble in improving their understanding of the youth market. Paul is a true "format champion" – someone who believes in the power of branding, and developing radio’s inherent assets.
- What Kind Of Team Do You Want To Be? - October 4, 2024
- The Revolution Will Not Be Monetized - August 20, 2024
- BIA’s Rick Ducey:How Radio Can Capture A Bigger Piece Of The Revenue Pie - June 27, 2024
“… no memorable user experience outside of a music stream or a bland channel. There’s no human connection. No passion. No laughs. No information that makes you sit up and take note.”
The problem here is that this describes the vast majority of radio listening hours. Most radio is pretty much Pandora with more spots, inferior sound and some tracked filler, meaning that’s all most radio AEs have to sell. For every iconic moment on radio, I can show you days, maybe weeks of un-researched music slapped together by someone doing it for 4-8 stations, separated by liners written by some overworked somebody writing a zillion of them who posts them on some shared drive, from which they’re downloaded and recorded by someone 1000 miles away and sent electronically to some cut and paste production operation. This operation cuts and pastes them to jingles, bumpers and other prefab, prerecorded pieces that have been built with the benefit of pronunciation guides, so that the listeners have no idea that most of the people involved couldn’t even find your city on a map, much less pronounce any town or landmark properly.
Maybe radio is LUCKY to be able to meet a cost per point and walk away with some money. From a practical standpoint, there are so few radio stations, even moments anymore that merit extra compensation over a cost per point that such isn’t factored into radio pricing and buyers don’t have the authority to do it.
All that said, radio could still be doing a better job of selling its (for the most part) manufactured housing process of entertainment by uncovering and solving customer challenges and problems – but don’t expect someone who can do that to work in the draconian non compete/bonuses earned are regularly cancelled environment that pervades radio sales offices now.
If radio produced more iconic programming, whether with a different metric or a higher cost per point, perhaps it could change the pricing structure, but that would require some new thinking on RADIO’s part about ROI. That, IMO is the underlying issue – and everything else belongs under that heading.
Grumpy old man warning!!! Iconic radio stations used to get iconic ratings and in turn, even at the going CPP, iconic revenue. Why don’t they anymore?
Bob, no argument here that there aren’t enough radio stations providing compelling experiences, engagement, and connections. And Paul acknowledged that in his post.
While we agree there needs to be more “better radio,” it can be heard in major, medium, and in some cases, small markets. The fact that companies like NRG and Saga continue to post positive revenue numbers underscores smaller market radio’s ability to connect, serve, and move products and services. Townsquare’s growing portion of digital and “other” revenue is an indication that a strategic revenue game plan can produce results.
The medium has allowed itself to be beaten down by new media brands and platforms. And the point our posts yesterday and today is to start the conversation that stimulate more investment in creating better radio. Stations that continue to mail it in are doing so at their own risk.
Thanks or keeping the discussion flowing.
I meant to write this earlier – but yes, companies like Saga do create iconic stations and moments (any company with Steve Goldstein in charge of programming will do that IMO) – but they represent such a small percentage of radio’s total that they are more anecdotal than statistically significant. The big players in radio have been phoning it in for a long time now and seem to be perfecting that old sales cliche – “once I can learn to fake that sincerity thing, I’ll have it made!”
The interesting thing to me is that while companies like Hubbard spend real money on talent/supporting their brands with research marketing and people, they also generate comperable margins to the mail it in crowd, yet the latter (mail it in crowd) seems completely oblvious to that.
I wonder why no one at shareholders meetings every brings stuff like that up…..
I’ve had similar conversations with Dave Richards and Bill Weston. Both have taken great brands and made them even better – in 2015, with less resources and the financial pressures we all know about. And the results speak for themselves – both stations are the top of their games AND at the top of the ratings. That level of success validates the model. Thanks, Bob.
So, I’m the glass half-full guy in the family. You are right, but this screams “opportunity” for broadcasters who are making the investments. But having great talent and an iconic brand mean nothing if the sales staff isn’t as passionate in front of advertisers as the jocks are on the air. This topic has struck a nerve and I’m going to continue to ring this bell in this blog and elsewhere.
Thanks, Bob.
Hey Bob, we’re all grumpy, and while it’s true that in too many cases the overall quality of the broadcast experience has declined, radio still has the opportunity to sell itself differently, because we often provide a better connection with listeners. For those stations that are music machines, I have no clue what their sales pitch is. But for broadcasters that continue to invest in talent and build strong local brands, the sales staff needs to step up and actually sell what they’re delivering. And it’s not cost efficiency.
I agree with Paul’s core ideas, but the underlying economics of consolidated radio have to be acknowledged as a contributing factor in local music radio’s eroding position. The combination of fewer qualified music experts (something this blog has addressed) and the breadth of the the music’s appeal makes it hard to compete with well focused, well hosted XM specialty services. If you are an alt.rock, urban or contemporary Christian music fan, XM is almost always doing a better job with the music curation and presentation. With no commercials.
Once you are being beaten by the central value proposition, music selection and music guidance (hosting), trying to play catch up with commodities like traffic, weather, headlines and sports doesn’t leave much room.
I’m not grumpy when I say I don’t look to my local music hosts to drive the local conversation about Detroit. The phrase “stick to your lane” is associated with one radio group, but it’s a maxim across the industry. The vast number of local music hosts are barely credible with the music, they fall down hard when they go off script.
These days music radio is generally neither. It is not providing great music service and its function is to transfer cash from the advertiser to the debt management function – which is different from being a profitable business. Paul’s points do a great job buttressing a segment of the operation, but the core problem with music radio is the product. It reaches many many people, but it is far from inspiring – something I want from my music and my music experience.
Mikel, you set a high bar, but I think many would agree that radio has fallen short in many of the areas you mention. I share Paul’s belief that the talent is there – the question is whether broadcasters have the will to provide the kind off programming and music curation that can satisfy fans. As for the inspiration part, that’s a tall order and something that radio needs to aspire to reach. Thanks for the thoughtful, sobering comment.
I appreciate the thoughts, Mikel. Your last point about “inspiration” is really central to this discussion. In too many cases, radio isn’t as inspiring as it used to be. But to succeed, two things need to happen – it needs to regain that mojo (or shore it up if they still have great live personalities), and then create a revenue strategy designed around that inspired relationship with the audience.
Bravos, Fred. This is a timely, relevant and important series. Congrats to Paul on a solid post.
Please allow me to offer a bit of perspective gained from my involvement in helping clients to understand the brave new world of digital media and the continuing value of legacy media.
Buyers have a difficult job. Shiny new options surface almost weekly. The number of sellers fighting to get attention and some share of budget continues to increase. There’s a lot of noise out there. More sellers are chasing fewer buyers. The Ma & Pa retailer, once the wellspring (local direct) of base billing, now has many affordable, competitive options including no-salesman-will-call-self-service (e.g., Google AdWords). Digital is now the top local spend in every metro.
Here’s something new you can add to your “Made in the Motor City” list. An agency of the big three auto makers recently dropped CPP in their buying of TV. The Detroit shop is asking stations to submit on impressions rather than ratings. As you might imagine, this represents a sea change for TV sellers. My sense is this is only the beginning as we are in the early days of major changes in the way all media is measured, bought and sold. Buyers, under pressure to substantiate buys, are changing the rules of the game. But wait, there’s more. A renewed search is on for new measures of ad effectiveness including the now vogue notion that data can provide insight into the customer journey or experience which will produce a fresh ROI metric: “conversion credit.” Millions are being invested in developing attribution models and multi-channel funnels. These are simply the latest attempts to answer an age-old question “Which half of my ad spend is wasted?”
The good news is broadcasters can get ahead of this curve and lead. This will require leadership and investment. It will not be easy as there’s no quick fix available, no silver bullet on offer. One needs only review the quality of leave behinds used by most radio sellers to understand the magnitude of the challenge. It’s about competing for the future and the fish stinks at the head first.
For the record, I remain optimistic and bullish on radio’s potential for resilience.
Dave, I always appreciate your comments, and those observations about TV are especially germane to this conversation. An understanding of the shifting sands in the agency and buying community is key. We saw this in Monday’s post about how the beers are re-evaluating they ad spend.
As you point out, broadcasters have some of the tools to compete in this environment, and in the past, were perhaps much better at fighting this fight. And I hear you about those sales pieces and leave-behinds. They speak volumes about the state of the industry and how much needs to be done.
Thanks again for your optimism and on-point observations.
Dave – killer comments and perspective as always. Thanks for the thoughts, and I appreciate – and share – your bullishness.
The premise of ROE2 is presented too soon. As Seth Resler stated in yesterday’s comments, “…the tools and strategies that allow you to do this [current analytics ] — championed by Google Analytics, Hubspot, Marketo, Eloqua, etc. — are still very new and a little unwieldy.” We haven’t wrapped our heads around the analysis of metrics completely, yet. Why would we try and tackle this visceral ROE2 concept so soon?
A couple of notes. From my perspective:
1) Radio has yet to use metrics as digital companies use them. The analysis of data to understand and improve consumer action is not done; what radio calls digital is serving a banner ad or streaming – that’s using a digital platform. Digital companies use the analytics of metrics acquired through digital delivery.
2) This discussion needs to move to how rapidly consumer and advertiser expectations have changed. Hundreds of options are offered every day yet radio is still pushing a format clock featuring 4 breaks per hour, voice tracking, and little useful information (even on talk stations). Worse, commercial concepts haven’t changed in 50 years.
Small and medium markets are doing O.K., but it’s the large and major markets producing most of radio’s revenue. Look at what’s presented by the latter online and on-air. You find the majority are nowhere near the standards of up-and-coming online audio platforms.
Radio isn’t going to die, but digital is the media buy being chased because it gives mathematical facts.
It’s ironic how radio fights the use of metrics in the true digital sense, especially considering it’s an industry dependent on data reports from Nielsen, Jacob Media’s “TECHSURVEY11,” Edison and Triton Digital’s “Infinite Dial Study – 2015,” and Borrell Associates, etc.
One more note, please. I’ll disagree with Fred’s “The medium has allowed itself to be beaten down by new media brands and platforms.” Nope. Radio allowed the others to surpass it by taking no action when the internet’s growth became obvious.
Ken, while you are right that radio still hasn’t mastered digital ROI (and needs to), my message is that radio has what advertisers know they want – results and consumer connection – but they hide behind cost as a negotiating strategy. Radio has the goods – the key is to continue to emphasize and invest in them while ensuring that salespeople have the cojones to break away from cpp negotiating.
OUTSTANDING THOUGHTS, PAUL…and well-articulated. Madison Avenue needs to read this! Twice!
Thanks, Biv. When I talk about what made WRIF so iconic, you know what I mean because you lived it. On so many levels, WRIF has set the standard for excellence in radio by creating the essence of ROE2. Let’s hope other broadcasters take note and continue to invest in people and creating strong radio brands.
And let’s also hope we can find sellers who are as enthusiastic as we were about selling what radio stations really deliver.
Thank you for this well thought article. Radio was the greatest medium for an advertiser to build a trust bond with a shopping customer. The listener was loyal and trusted the on air personality as well as the advertisers on the program. 40 years after being in my teens in Detroit I still remember Arthur P blowing the Boblo horn every 30 minutes to remind us to flip over while tanning at the lake, how about Michael Collins doing his live call in show on Sunday night to help kids figure out their problems. Everyone loved WRIF! Every radio station on the air can still build this outbound trust bond, but then again you need to pay someone to be live and local. Some major market stations are still programing with engaging content, in other words giving sales reps something to be excited about when making a cold call, in middle and small markets it’s hard to find. In 1980 the RIF SM Buzz Van Houten told me that when he walked into a business, introduced himself as a rep from RIF and everyone in the store including the owner, yelled BABYYYY, it was music to his sales ears. How about giving sales people something great “like that” to sell? When a store owner/advertiser yelled BABYYYY to a RIF sales rep they didn’t usually follow up with “now how many GRPs come with that. I’m may be old but not grumpy, just sad that the simple act of selling a spot has been made difficult by producing boring content that no longer makes an emotional connection with a listener.
Greg, selling a station like WRIF should be an amazing experience. Like Buzz, I remember whenever I told a stranger I worked there, their eyes lit up. While it’s impossible to replicate the past, the fact is, many local personalities still have that effect. Remember, we are in show business (kind of). The key is to act like it. To have that swagger that you work at a place everyone wants to be at – including the advertisers.
Paul,
As a former broadcaster, I hear you loud and clear with regard to bringing talent along on sales calls, and the power of live reads. The problem comes with the reality check where stations are imaging with “no talk”, “less blah” and actively diminishing the role of the announcer. The audience gets this, regardless of what a dozen might say in a focus group. You either believe in your on-air staff, or you don’t. Funny how some jockless formats now are bringing the promotions guy and the MD on the air, people who cannot fill the spotlight, to do live reads, after telling their audience for years that what jocks have to say is bullshit. One cannot demean and devalue the contribution of announcers, and then ask the under-qualified to crack the mic and relate. It’s bad radio, and anyone can hear that. Every radio station in America could learn from WKLB, Boston’s country wizards. Local means local, and they back it up on-air, and online every day.
Hey, Tai, thanks for the comment. So I’ll jump in and respond (it’s a programming thing anyway, plus I’ve been blocking his spotlight for decades!)
I learned a long time ago that not every station can be WMMR or KISW or WRIF or WKLB. The truly outstanding ones showcase great personalities and a local focus. The music machines you refer to (and yes, we consult them, too) can continue to be successful on a low-coast basis (sort of like an HMO), but the big question facing them, is for how long? Ultimately, that’s the challenge because music utilities that still play 10 minutes of commercials an hour are going to be hard-pressed to compete.
Thans for taking the time to comment.
Fred is right that that “music machines” have a place from a business model standpoint. But what is the difference between many of them and a playlist on Pandora? Ultimately, what makes radio great is obvious – talent, brand, local. That’s what advertisers will pay for because they can’t get that anywhere else.