"Radio is Dead" - Chapter 37

[davideduardo]

Of course, our users made the advertisers' decision easy: Internet users were younger, more gullible, more eager to swallow a sales pitch, susceptible to flashing lights and weird graphics.

And that is a biased, mistaken interpretation of marketing.

Young people are less brand-loyal because they don't have decades of custom and habit using a reliable product. They are willing to experiment and try new products, so they are open to responding to invitations, called "advertisements" to try something new to see if it's good and better than the current choice.

It's not about being "susceptible" and "gullible". It is about not having a habit while truly having a willingness to experiment to find the best choice.

 

[CTListener]

It depends. You might have a popular product that attracts a large audience that advertisers don't care to reach. The difference between radio now and in the 60s is the number of radio stations in a market. So the pie is sliced a lot thinner.

The quote you responded to here wasn't from me.

 

[CTListener]

And that is a biased, mistaken interpretation of marketing.

Hard lemonade, citrusy beers, Pepsi Clear, ringtone downloads, 1-900 phone scams, time shares ... all sucker bait, all advertised either in the past or today. Yes, advertising can be used to push helpful new products, advancements in technology, things of real benefit. But all too often, Madison Avenue's philosophy is more "there's a sucker born every minute" than "how can we help the consumer discover something important and useful."

 

[EricStein]

I think if there were more than one strong national rep firm company for radio, that would be better for the ability of radio to convince the big advertisers that it's still a viable format to use in their media buy. Having every major group repped by Katz seems to be a conflict of interest. Why hasn't anyone stepped up big time since Interep's bankruptcy (the last national rep to champion for more dollars going to urban radio, among other things)?

 

[AbrahamJSimpson]

I am continually amused by the radio insiders who dwell on the income (advertising) side of radio.

You mean a business focused on, um, maximizing profitability? Wow. That is a unique concept.

That aside the page linked in the original post strikes me as comically disingenuous. Setting up straw-man "perceptions" without sourcing their prevalence for validity, which happen to align with carefully sourced counterpoints. I know it's not a new strategy, but just seemed especially amusing as presented here.

 

[davideduardo]

Hard lemonade, citrusy beers, Pepsi Clear, ringtone downloads, 1-900 phone scams, time shares ... all sucker bait, all advertised either in the past or today. Yes, advertising can be used to push helpful new products, advancements in technology, things of real benefit. But all too often, Madison Avenue's philosophy is more "there's a sucker born every minute" than "how can we help the consumer discover something important and useful."

Time shares are enjoyed and used by many; some find they made a mistake. Flavored beers are nothing new and some folks who don't like the flavor of normal beers and malt beverages enjoy the flavored alternatives.

Pepsi Clear is aimed at a large segment who don't want artificial coloring in foods. Fun ringtones are as cool as a colored cellphone case.

So we are down to the 1-900 services that offer some kind of service at a minute-by-minute rate. I hate to admit it, but there are people who like and enjoy them.

Products are advertised not just to promote and familiarize people with new goods and services but to maintain awareness, counter competition and to enhance brand perception. In fact, a lot of advertising is done as a "last moment before purchase" enhancement in the short time before purchase. There is a reason why Pizza Hut advertises in the hours when people have lunch, dinner and snacks... it helps hungry people to keep them in mind at the point of purchase.

Back to the time of town criers centuries ago, businesses want to tell people about their offerings. Your criticism is really a criticism of advertising of all kinds, from handbills to TV and radio.

Most advertisers would classify under what has been McCann-Erickson's slogan going back 109 years, "The truth well told".

 

[davideduardo]

I think if there were more than one strong national rep firm company for radio, that would be better for the ability of radio to convince the big advertisers that it's still a viable format to use in their media buy. Having every major group repped by Katz seems to be a conflict of interest. Why hasn't anyone stepped up big time since Interep's bankruptcy (the last national rep to champion for more dollars going to urban radio, among other things)?

Reps don't sell radio, they sell individual stations and groups.

Reps call on agencies to pitch the stations they represent for inclusion in already budgeted ad buys. They don't sell radio over other media... that is not done by a rep firm. They sell their stations over other stations.

The industry has things like the RAB to promote the use of radio. Reps are no different than the salesperson in the station's town that calls on car dealers and health clubs for local spots. It's just that no station can have sellers in all the big media markets, so they delegate that function to a rep firm.

 

[landtuna]

Thanks for the clarification.

Using the term "land office business" would equate to "significant earnings" in a radio context and not the "dollar a hollar" variety.

 

[gr8oldies]

Hard lemonade, citrusy beers, Pepsi Clear, ringtone downloads, 1-900 phone scams, time shares ... all sucker bait, all advertised either in the past or today. Yes, advertising can be used to push helpful new products, advancements in technology, things of real benefit. But all too often, Madison Avenue's philosophy is more "there's a sucker born every minute" than "how can we help the consumer discover something important and useful."

We're in time share heaven here, but it seems every unsold or barter spot is the timeshare cancellation guy.

 

[boombox4]

We're in time share heaven here, but it seems every unsold or barter spot is the timeshare cancellation guy.

Yeah, he sure gets around.

 

[EricStein]

Reps don't sell radio, they sell individual stations and groups.

Reps call on agencies to pitch the stations they represent for inclusion in already budgeted ad buys. They don't sell radio over other media... that is not done by a rep firm. They sell their stations over other stations.

The industry has things like the RAB to promote the use of radio. Reps are no different than the salesperson in the station's town that calls on car dealers and health clubs for local spots. It's just that no station can have sellers in all the big media markets, so they delegate that function to a rep firm.

I understand that. But why have one huge company owned by iHeartMedia control more than 80 percent of national agency buys? Are other station groups fine with this? There is no better way to get the agency dollars? We live in an online society, but technology hasn't caught up to national radio sales.

 

[boombox4]

It depends. You might have a popular product that attracts a large audience that advertisers don't care to reach. The difference between radio now and in the 60s is the number of radio stations in a market. So the pie is sliced a lot thinner.

Thinner yet when you consider that in the 1960s there were three main commercial TV networks, and the only other commercial competition for radio advertising was print newspapers and magazines, and billboards. Now you have numerous TV channels (cable as well as OTA), along with a gazillion websites.

 

[Kelly A]

Thinner yet when you consider that in the 1960s there were three main commercial TV networks, and the only other commercial competition for radio advertising was print newspapers and magazines, and billboards. Now you have numerous TV channels (cable as well as OTA), along with a gazillion websites.

Are you comparing radio to radio, or TV to TV? Whereas they have agencies and rep firms, they all don't always cater to the same clients.

 

[davideduardo]

I understand that. But why have one huge company owned by iHeartMedia control more than 80 percent of national agency buys? Are other station groups fine with this? There is no better way to get the agency dollars? We live in an online society, but technology hasn't caught up to national radio sales.

This is why many stations are looking at programatic buying, where a computer looks at rates, audience and optimum scheduling and issues an order at a commensurate rate. No human contact, no salespeople.

 

[semoochie]

Hard lemonade, citrusy beers, Pepsi Clear, ringtone downloads, 1-900 phone scams, time shares ... all sucker bait, all advertised either in the past or today. Yes, advertising can be used to push helpful new products, advancements in technology, things of real benefit. But all too often, Madison Avenue's philosophy is more "there's a sucker born every minute" than "how can we help the consumer discover something important and useful."

If you had said this in the previous four years, I would have said that you are confusing Madison with Pennsylvania Avenue.

 

[boombox4]

Are you comparing radio to radio, or TV to TV? Whereas they have agencies and rep firms, they all don't always cater to the same clients.

I'm comparing the media available for consumers and advertisers in the 60s to now. They may not all cater to the same clients, but experts here have said that the rise in effectiveness and reach of internet advertising drove overall rates down, not just at radio, but other media also.

 

[Kelly A]

I'm comparing the media available for consumers and advertisers in the 60s to now. They may not all cater to the same clients, but experts here have said that the rise in effectiveness and reach of internet advertising drove overall rates down, not just at radio, but other media also.

A lot has changed, and continues to change, since the 60's. Early-on you had three TV networks, now you have dozens with some focused on very niche' audiences. Cable networks have always sold differently than local TV stations. Now with OTT/streaming, the model is getting tossed like a salad again. Cable networks like Discovery see their next audience being completely on line, so they're offering incentives to get audiences to sample what's over there. This new model gives the network viewer's more options: Pay for the full subscription and eliminate commercial breaks, or the lesser subscription and get spots. That way when, not if, the advertising model bottom falls out again, networks have a subscription base with revenue coming straight off the viewer's credit card or bank account.

This is just one small example of why it's difficult to compare the TV revenue model with the radio revenue model. With the exception of SXM (which is less than 2% of the total radio audience), unlike TV or AV-OTT offerings like Youtube, Hulu, and Roku, Radio still relies purely on advertising, because nobody has cracked the subscription aural model yet.

 

[SirRoxalot]

What's missing from this discussion is the decline in radio station promotion. Stations used to be at events, creating events, and in the public space in a much bigger way than they are not. Budgets for promoting radio on other media are a fraction of what they used to be. Promoting your website on your own station - and not promoting your station on other media - doesn't get anybody new or different to sample your product. Radio is no longer a monolithic content delivery system. You need content that people want to hear, and you need to make it available on as many platforms as possible - OTA, online, mobile apps, and via smart speaker. You also need to promote that content on other media to get people to sample it.

 

[b-turner]

As a salesperson in radio I can tell you comparing 1991 to now, there are tons of options for advertising compared to just 30 years ago. The best way to imagine this is a pie you are about to cut into slices. The greater number of slices, the less of the advertising pie is yours.

In large markets this is amplified by not being a key station that advertising agencies have on their radar. You had better hope you are part of a group ownership that has some top rated stations to prop you up. In the small market, the revenue of local merchants, the bread and butter of revenue, are having their revenue decline by national chains and online buying. Many have written about Main Street after Walmart came to town. Now the FedEx or UPS truck in front of a house is another sale the local merchant lost.

I know a very hard working and successful small market operator. In 1991 he was billing about $45,000 a month. Easily 12 commercial units an hour on weekdays. Today the station bills about $50,000 a month (don't forget 30 years of inflation). He runs about 2 to 4 commercials an hour and most of it is agency or co-op because the number of businesses that can buy radio and choose to has dwindled so greatly. He's still the heritage top dog station (something he inherited in the mid 1980s). The dollars are just being spent elsewhere or the monthly budget is too low for an effective schedule on radio.

In short the challenge is the many advertising/marketing venues available and the advertising budgets that in small markets are getting smaller.

You can talk all you want about programming and promotion. I was on that side of the building. I believe it is equally important as sales. The reality is both sides must have the other. With good programming and promotion you make selling much easier and with a good sales staff, can command a larger slice of the advertising pie. If you don't have a good sales department or no sales effort, then you're like that beautiful automobile with everything in perfect condition just awaiting the gas for the engine so it can do what it is supposed to do (get you from point A to point B).

 

[TheBigA]

What's missing from this discussion is the decline in radio station promotion. Stations used to be at events, creating events, and in the public space in a much bigger way than they are not. Budgets for promoting radio on other media are a fraction of what they used to be.

Only because of the pandemic. In many markets the promotion department is a subset of the sales department, bringing in NTR for stations.