A new study from the Global Information Industry Center at the University of California, San Diego, has a lot to say about the old 10 pounds of shit in a 5 pound bag analogy (if you'd excuse the expression). In this case, the bag is our brain. And this study is about just how much information people consume a day.
Overall, they consume nearly 12 hours of stuff a day.
That's pretty astonishing because we're buzzing through "information" (data measured in bytes and zettabytes) at a pretty amazing rate. To that end, the study's authors leave us with a couple of interesting thoughts from this research:
1. Our capacity to receive and process information is finite. The bag is only so big, right?
2. Traditional media is still the dominant source for information and entertainment.
And #2 leads to my conclusion from this research:
Given how much consumers use radio, we have totally screwed up the revenue generation potential of our medium.
Talk about power ratios. We compute them by format. Instead, we should calculate them media industry wide. The chart below shows that on an average day, consumers spend 2.22 hours with radio.
So, if consumers use 11.8 hours a day of media, that gives radio nearly an 18 share!!! (I factored out satellite radio and just focused on terrestrial.)
And if you figure that broadcast radio is now garnering about a 6% share of overall media revenue, that nets out a Broadcast Radio Power Ratio of about .3.
Imagine, if radio's piece of the pie could even be a .5 power ratio – or 9% of all ad dollars spent. We sure wouldn't be in the fix we're in where other media advertise, market, research, and develop. While we focus on debt loads and strengthening our EBITDA.
We are the Rodney Dangerfield of media, and it's our own damn fault. We give away our advertising, we throw in "added value," we add units whenever we have to, and we whore out our products on a daily basis.
It's not about margins. It's about share of the media pie. It's about respect. It's about getting our fair share.
Every rep at every station should be carrying that pie chart in their sales kits. Radio is a great deal. It's a great business.
Once we convince ourselves of that, maybe we can then start to effectively convince advertisers. Let's hope we do a better job of valuing our business in 2010.
Here's the study summary:
<CLICK HERE TO READ STUDY SUMMARY>
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How smart! Thanks for leading with a new point. I’m thinking leverage. Take radio’s reach and use it with the two way connectivity and accountability of the web. We need more smart people to go forward with this idea.
Let’s not rest on “easy comps” for 2010. Time to grow, make more money, and be contributors.
This is powerful information and exactly the kind of thinking that radio needs in 2010.
The media measurement of the new decade will be “share of attention”. This is no time for the industry to undersell itself. Steve’s comment about not resting on “easy comps” is also right on the money.