Paul Jacobs chimes in with some thoughts on the future of radio in a New Media world
"Online Ad Revenue To Surpass Radio In 2008"
No, I haven’t lost my mind. While this item could be construed as depressing if you’re in terrestrial radio, maybe we should look at it differently. What other medium is as well-positioned to create digital content, and drive its sizeable cume to interact with it? For several years, we’ve been encouraging radio to become multi-dimensional online, and many stations and groups have made efforts to get there.
But have we gone far enough? If you were at Summit 11 in Dallas last year, I believe the future template was presented to you. I realize we have mentioned the Borrell and Calacanis sessions many times in this space, but in the entire history of our Summit, we have not hosted more important sessions.
Gordon Borrell shared the raw correlation between the size of dedicated digital sales staffs and revenue generation (watch his presentation here). And unfortunately, radio lags behind other media (especially newspaper) in both metrics. Maybe this new report will spur our industry to begin investing in dedicated digital sales people.
At that same Summit, Jason Calacanis simply told radio people, "Surrender!" – and develop an entirely new model based on the inherent strengths of the medium. While his comments made some uncomfortable, they were painfully true (watch his presentation here). His message was that radio needs to accept the reality that it is being overtaken by digital media. But at the same time, he saw radio as perfectly positioned to profitably participate in the digital space for three simple reasons:
1. We know how to create outstanding audio content (compared to the weakly produced podcasts that proliferate today),
2. We know how to sell it,
3. We have the raw cume to drive consumers to our content.
Once you get past the shock value of Jason’s headline, there was some real sage advice for our industry.
Times are changing, and radio is being challenged like never before. But we’re experts at the two things that matter most in the digital world – content creation and revenue generation. And our ability to drive site traffic is the key to it all working together. Let’s surrender to the realities, reinvent our business models, and capture a big chunk of the growing digital revenue pie.
Summit 11’s provocative and rich sessions challenged us to reach and exceed those levels in Charlotte later this month. We invite you to attend Summit 12, featuring NAB CEO David Rehr, PPM & Rock, the radio version of "The Bedroom Project," and Richard Laermer, "Mr Punk Marketing." RSVP to lisariker@g5j.8ac.myftpupload.com and check out our agenda and the details at www.ik9.5f7.myftpupload.com/summit
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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Bravo Paul! Good points, again. The issue remains leadership. The RAB half-time report shows 68% of radio revs are local spot. The problem is stations are focused on getting better at gaining more of the same or fewer dollars when they should be focused on, as you suggest, getting different. In the big picture, about one third of the total annual domestic ad spend is “local.” This is the online edge. They get to play for their share of the $3 billion local online spend while also playing for the big national dollars. The RAB tells us national made up less than 20% of our take YTD.
Dave, thanks for chiming in with your on-point comments, as always. Paul and I were encouraged by a story in this morning’s Inside Radio showing that non-spot revenue – mostly radio’s online efforts – rose 12% to $71 million in the first half of 2007. This is a hopeful sign that radio is recognizing the greater opportunity, and is responding in-kind.