Last week, Dave Martin fired off a tweet featuring a cartoon created by the brilliant marketer, Tom Fishburne. It depicts a corporate meeting that has the ring of truth for some of you who work for companies going through the difficult transition that has impacted the world of media over the last decade.
The “low hanging fruit model” worked in the good old days of 40% margins and 20x multiples. In his blog, Fishburne talks about how “safe is risky.” And he reminds all of us on the front lines that the choice we make when faced with taking chances and innovating is a simple one: “sinking the ship” OR “missing the boat.”
And Fishburne goes on to talk about the importance of innovation for entrepreneurs and execs – or “rocking the boat.”
So why is there so little of this in traditional media organizations – a topic that is a frequent one on this blog?
Today’s legacy media stewards never planned on this – a tumultuous tectonic media shift, marked by frequent change, disruption, and turbulence. During the fertile years, radio – in particular – was an easy business with a dependable and profitable relationship between ratings and revenue.
There are many moving parts here, but one of the most challenging has to do with advertisers. Recently, Galaxy’s Ed Levine sounded off in Tom Taylor’s NOW column about radio’s need to better communicate its “92%” message because advertisers simply don’t believe it’s true.
Now if you know Ed, you know there’s not another independent owner who has done a better job of building strong local radio brands, building relationships with his communities, creating impressive NTR events, and successfully conjuring up new dollars.
As a former programmer, Ed knows all too well how to “make ratings,” so his comments about how advertisers desire “digital” (even though they may not understand what it is) while ignoring disbelieving radio’s (still) mega-reach are important.
But just as radio needs to communicate the notion that it is still a very viable mass medium, it also has to be more proactive at embracing new digital channels that offer advertisers effective packages that combine the best of broadcast’s reach with shiny new digital features. If radio is to remain viable among audiences younger than Baby Boomers, this question of balance and commitment to innovative new digital tools and initiatives is essential.
In order to truly navigate the media waters today, more boat rocking on the part of broadcasters is necessary, even if it leads to momentary queasiness. As advertising executive Mark Kaline reminded his industry some years ago, “Get comfortable with being uncomfortable.”
And that can be even more painful when the finish line is in sight.
Too often, it appears to come down to that executive choice of “running out the clock” versus “beating the clock” by transitioning our legacy radio station brands to vital, modern, local outposts that serve consumers in unique and compelling ways, serving their desire to access content anywhere, anytime, and on any device.
While it is convenient to blame Wall Street for the innovative lag, the fact is that companies that fail to answer that loud ticking sound will only serve to speed up their obsolescence process.
Advertisers don’t believe 92% when they don’t perceive its value to their clients and their businesses. When the sales message continues to be delivered with antiquated rate cards and rankers, it screams that radio continues to do it the same old way. It communicates that radio doesn’t get it.
How radio harnesses the power of 92% to generate store traffic, sales, and audience metrics in a changing consumer environment is at the heart of the conversation. Advertisers will believe radio’s 92 messaging when there’s a new product, a new innovation, or a new initiative they can wrap their heads around – as well as their enterprises.
That’s when 92% becomes the fuel that leads to new perceptions, new dollars, and new respect. There are examples out there, and hopefully, you can point out ones I’ve missed:
- Bob Pittman has used that 92% to power, promote, and leverage iHeartRadio, building it into a megawatt brand.
- WCSX/Detroit used it to generate more than 50,000 downloads for a simple video game app it launched last fall on behalf of sponsor Carhartt.
- Phil Becker used the power of 92% to move eyeballs to his station’s Instagram accounts, populated by DJ videos, thus opening up new content for emerging audiences.
- NPR uses its version of 92% to aggregate record-setting podcast and on-demand metrics that are predicated on great content meeting new digital distribution outlets.
But this list isn’t long enough.
Interestingly, many companies and startups on the periphery of the radio business understand the power of radio’s reach, and they’re building businesses that capitalize on driving eyes and ears to platforms.
But for broadcast radio, solutions need to come from within. The business needs more success stories time is indeed marching on – faster than we think.
Tick tock.
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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I’ll tackle the 92% issue first. And I’m sorry to be a buzzkill here, but no one ever cared about or bought radio because of its reach. And they still don’t…and probably never will. I sold and/or managed in radio during much of the easy 40/20 years you outlined and I don’t remember one client or would be client that ever used radio for anything but its ability to TARGET. Honestly, when was the last time a media sales person heard a prospect blurt out that their biggest wish, nightmare or problem revolved around broad media reach limitations.
Even in the old days, radio reach was a solution in search of a problem and now that’s even more true. Advertisers want to target as specifically as they can, with as much after the fact accountability as possible. Even media with massive reach like Google and Facebook don’t sell that reach – they sell the ability to target based on a massive, cross-combinable amount of criteria and sorts. Even your examples point more to targets, not reach. Certainly a station or personality are focused on segments of segments, not broad reach criteria. And even NPR doesn’t exactly draw super bowl kind of reach numbers. Aren’t those “sponsorships” are sold based on the ability to hone in on educated high earners, rather than big reach?
Look at Pandora. They’re able to command higher CPPs than terrestrial radio because of their ability to stratify, slice and dice, not reach. While I think their ability to actually do that falls short of some of their claims (they know my zip code but very little of my Pandora use happens when I’m in my zip code for example) there’s no question that narrowing down to specifics is what drives their sales – particularly their premium price when they can get it.
As for radio execs running out the clock – that’s the best way of putting it I’ve heard yet. They can’t all be as uninformed and clueless as their actions (or more to the point lack of them) would suggest. They’re at least to an extent, sacrificing the entire medium for short term personal financial gain.
Radio needs to stop focusing on reach once and for all. No one who buys it does, or ever did really care about it. The good news is that there are a lot of problems that they do care about that radio could help them solve. One by one conversations will generate more revenue than 92% ones.
Bob, we’re on the same page – reach, in and of itself, does nothing. Radio should be marketing its ability to be effective, to motivate consumers to buy/test/research/discover products, and to do it in on a mass basis. There’s no question that the ability to granularly target a la a Pandora or Facebook is an advantage they have that broadcasters need to address as well. But the examples I gave illustrate radio’s ability to move eyeballs and ears. Whether it’s reach or trust – or something – we continue to see an effective medium when all the planets line up.
Thanks for taking the time to comment on a topic that is brings out the passions in most of us.
To Fred’s point on Pandora and FB being able to “granularly target” an audience… I say let ’em have it!
From a marketing standpoint, there’s a time and a place for hyper-targeting and there’s a time for mass marketing.
I have mind-numbing conversations with sales people when they say “which station is best for a dentist?”
My answer: The station where the listeners have mouths
We drown ourselves with the “what” info in demographics, and ignore the “who” info in psychographics. We are an emotion medium. Talk to people about their lives and their passions, and you make the sale.
Every station, regardless of format or “perceived” demographics, has the potential to make a connection right down to the pure human experience.
A refresher on Maslow’s old “hierarchy of human needs” will go a long way, I believe. The answer lives therein.
Johnny, you make some very strong points. Radio has a decided advantage in those big, mass market numbers – and maybe those monster cumes aren’t always used to the optimal advantage. But more and more, advertisers are looking to get more granular. And radio has to find a way to answer those questions as well. We asked a question in Techsurvey10 about the willingness to register before accessing a stream, and more than 70% said “No problem.”
I think it comes down to providing a balance of both. Maximizing the mass market edge that you mention, but still being able to provide more of the ROI that advertisers say they want.
Thanks for taking the time to raise the conversation.
Advertisers understand the need to target. Sales Reps loaded up with station data are more than happy to oblige. But I’ve seen Radio work best when you reach as many people as the advertisers budget will allow. Demo Adults 18+ and target through ad copy instead of media selection.
Its less important who you speak to than it is what you say.
As Roy H. Williams would say, I’ve never seen an ad campaign fail because it spoke to the wrong people. I’ve seen many fail because it did not say the right things.
Advertisers don’t need to know that Radio reaches 92%, rather how they can benefit. Sell ideas, not numbers. We get as high as 65% closing ratio on brand new local direct business when we present with a spec commercial.
Ted, I’m sure that Jerry Lee is nodding along with your spot-on comments. Thanks for the reminder that the creative is…pretty much, everything.