Forever driving down ad rates

[wiseman]

A local businessman (an equally wise man), shared a radio proposal he received from a Forever AE newbie with a friend of wiseman. The rates were laughably low, actually pathetically low, and for stations of considerable value. It was, of course, tossed aside with contempt. Why purchase something of no value?
If Forever, with the number of stations they control in SC and Altoona, and the quality of their programming, have lost faith in the value of their inventory, radio in these markets will be in for difficult times. Their abject failures spread misery to others.

Probably the thought would cheer them.

 

[Spackler1]

A local businessman (an equally wise man), shared a radio proposal he received from a Forever AE newbie with a friend of wiseman. The rates were laughably low, actually pathetically low, and for stations of considerable value. It was, of course, tossed aside with contempt. Why purchase something of no value?
If Forever, with the number of stations they control in SC and Altoona, and the quality of their programming, have lost faith in the value of their inventory, radio in these markets will be in for difficult times. Their abject failures spread misery to others.

Probably the thought would cheer them.

So, the stations have considerable value, but he didn't purchase because there was no value?
I think the joke is on your friend.

 

[gargoyles]

The stations are valuable only on paper. The real value is determined at the time their ownership changes.

 

[Hermes]

So, the stations have considerable value, but he didn't purchase because there was no value?
I think the joke is on your friend.
[/quote]

I agree...have your friend call WBLF and ask to purchase some $50 spots...and insist on NO bonus spots - that will show Forever.

"radio in these markets will be in for difficult times" <--- do you think radio has been in utopia the last few years?

 

[Ned Gimp]

"Spots" have no intrinsic value, like empty seats on a plane. I bet Wiseman's friend got lowball rates on the Bus or Qwk from an unqualified new rep under extreme pressure to sell from the geniuses above them.
Hermes' dig at BLF does not make sense.
Deep-pockets Forever (and 3WZ) should lead the way with rate integrity but have put themselves in a bind. So it is amateur time.
If they have decided to prostitute the rates, it will undoubtably hurt radio further in the market.
Blame BLF? C'mon...Sheesh!

 

[Spackler1]

"Spots" have no intrinsic value, like empty seats on a plane. I bet Wiseman's friend got lowball rates on the Bus or Qwk from an unqualified new rep under extreme pressure to sell from the geniuses above them.
Hermes' dig at BLF does not make sense.
Deep-pockets Forever (and 3WZ) should lead the way with rate integrity but have put themselves in a bind. So it is amateur time.
If they have decided to prostitute the rates, it will undoubtably hurt radio further in the market.
Blame BLF? C'mon...Sheesh!

You've missed his point.

 

[Polonius]

Two different points:
The average rates in the market will drop if the big players lower their rates. Duh!
and
Station value for the radio investor is a multiple of cash flow. Which must be falling like a heavy rock.

 

[Hermes]

Ned baby, maybe it didn't make sense because it wasn't a dig at WBLF - it was aimed at the *ickhead who thought because the rate was low on Forever, it had no value. If I go into Outback at 4pm and eat dinner and get the check and they say - you are entitled to the early bird special rate, because it's before 5pm - I don't think I'm gonna say - NO WAY, this meal has NO value if I'm not paying full price! Listen Missy, you charge me the regular menu meal price or I refuse to pay! You charge me more than regular price and that will make the meal better - because the more you charge, the better the meal has to be!

And I wouldn't worry too much about cash flow at Forever (does this mean only 3 trips a year to Europe, instead of 5?), I'd be more worried about the perceived value the CDT has over radio and TV. The sooner Forever/3WZ and the rest of the penguins stop fighting each other and realize who the real enemy is, radio may have a chance.

 

[Polonius]

Hermes, it is acknowledged that Forever has deep pockets. That is Ned's point, I think. They should lead the market because of it. Trips to Europe are irrelevant, unless one has a deep inferiority complex and a compensating need to show off. Very bad manners that. Fiddling while radio burns.

 

[jackandcoke]

There are conflicting stories floating around on this subject. Some advertisers are saying that Forever is charging much higher rates than in the past. If this is true, they should be applauded, not scolded.

The value of the Forever State College stations to the advertiser is in the listeners ("the ears") they can-and-do reach with the advertiser's message. Regardless of the specific ratings (listeners) each station individually delivers, the sheer tonnage (of listeners) that the cluster can deliver means that Forever--and only Forever--controls market rates. Add 98.1 & the related-but-not-owned 2510 stations to the 6 local signals they own outright and no other company can even come close to what Forever can bring to an advertiser. Any advertiser, regardless of the demo. In order to take advantage of that situation, though, the Forever reps must focus their pitch on value, not price.

WBUS and WQWK have the entire rock spectrum roadblocked. They should be charging and getting the highest rates in the market. Cousin WOWY has an exclusive position, as well, and should be charging top rates, too. WLTS is the only "soft" station in the market--another exclusive position. Same for WMAJ. Each has a strong story to tell. The last thing they should be trying to do is to undercut those charging less.

Selling cheap spots is the easy way; charging high rates is hard--and requires a willingness to walk away from business until the advertiser gets the message: "We won't cave." In the long run, though, it's the only way to raise revenues.

 

[Spackler1]

Add 98.1 & the related-but-not-owned 2510 stations to the 6 local signals they own outright and no other company can even come close to what Forever can bring to an advertiser. Any advertiser, regardless of the demo. In order to take advantage of that situation, though, the Forever reps must focus their pitch on value, not price.

You can't "add" the "related-but-not-owned" 2510 stations because, even if they are "related-but-not-owned", they bring nothing to the Forever advertiser. Forever can't utilize those stations in any way, except to block another owner from competing with Forever.

 

[Polonius]

There are conflicting stories floating around on this subject. Some advertisers are saying that Forever is charging much higher rates than in the past. If this is true, they should be applauded, not scolded.

The value of the Forever State College stations to the advertiser is in the listeners ("the ears") they can-and-do reach with the advertiser's message. Regardless of the specific ratings (listeners) each station individually delivers, the sheer tonnage (of listeners) that the cluster can deliver means that Forever--and only Forever--controls market rates. Add 98.1 & the related-but-not-owned 2510 stations to the 6 local signals they own outright and no other company can even come close to what Forever can bring to an advertiser. Any advertiser, regardless of the demo. In order to take advantage of that situation, though, the Forever reps must focus their pitch on value, not price.

WBUS and WQWK have the entire rock spectrum roadblocked. They should be charging and getting the highest rates in the market. Cousin WOWY has an exclusive position, as well, and should be charging top rates, too. WLTS is the only "soft" station in the market--another exclusive position. Same for WMAJ. Each has a strong story to tell. The last thing they should be trying to do is to undercut those charging less.

Selling cheap spots is the easy way; charging high rates is hard--and requires a willingness to walk away from business until the advertiser gets the message: "We won't cave." In the long run, though, it's the only way to raise revenues.

Spoken like a true accountant that may know commodities but never sold a thing in his life. Tonnage means nothing. Ears mean nothing. Tough guy talk about walking on business. Give me a break.
Clients want to work with companies (and their AE's) of credibility, trust, creative ideas, things only achieved through relationship selling. Forever fails to build the right foundation for selling. Tough talk about not caving on rates is a joke when they cave on people, again and again. So often in fact as to be a running joke in the community, a humorless, derisive, sad joke.

 

[cbtock]

SOUNDS TO ME LIKE POLONIUS USED TO WORK FOR FOREVER. SOUR GRAPES NEVER MAKE FOR A HEALTHY DIET.

 

[ameyer]

The problem that faces the advertising world right now is this. Young people get into TV, Radio, and Newspaper advertising thinking they will make a ton of money. This is true! You can make a lot of money but you have to stick with it long enough to build a relationship with the client. Forever seems not to be able to hold on to a AE long enough to make any headway with a business. So there plan is to drop rates to get some business on the air...yet they may get that business with lower rates, but how many of those people once their contract is up will be a repeat customer?

And no I never worked for forever but it doesn't take a genius to figure this out, any fool can do advertising but those who over think it are bound for failure.

 

[SoSoAwesome]

if a gas station came into town, bought up all the other gas stations and then lowered prices, you'd all be raving about it. radio company buys up all the other radio stations, then lowers prices, you all complain. go start a business and advertise on the cheap!

 

[shilton]

if a gas station came into town, bought up all the other gas stations and then lowered prices, you'd all be raving about it. radio company buys up all the other radio stations, then lowers prices, you all complain. go start a business and advertise on the cheap!

While I pesonally do not have any issue with any 1 player setting the tone on pricing, I think the fundamental argument people would make here is that your scenario would never happen. In virtually any other form of business, it would be said that the company has a monopoly and some government entity would get into the road, whereas when it comes to station ownership, it seems that the laws seem to say you can own as big a piece of the pie as you want. But to a degree, the "big boy" will always have control over who charges what. Ever notice what happens near a Sheetz when they change the price of gas? All the other gas stations nearby do the same.

That being said, perhaps its time someone bends on pricing. Radio time is a commodity just as any product or service is and the simple rules of supply and demand come into play. If a media company has lots of ad time to sell and little advertisers beating down the door to get on the air, it only makes sense that the price would drop. On the whole, many businesses (including the one I represent as part of my full-time job) look at radio as a last resort these days because people's listening habits have changed so much as a result of Ipods and Satellite radio in particular.

Perhaps its not so much a matter of "bad sales people" as much as it is...someone is selling a product that on the whole, a large segment of society does not feel is beneficial to them? I guess my question is...as broadcasters, how can we start to think outside the box to make commercials become entertainment again?

Just my 2 cents

 

[jackandcoke]

There are conflicting stories floating around on this subject. Some advertisers are saying that Forever is charging much higher rates than in the past. If this is true, they should be applauded, not scolded.

The value of the Forever State College stations to the advertiser is in the listeners ("the ears") they can-and-do reach with the advertiser's message. Regardless of the specific ratings (listeners) each station individually delivers, the sheer tonnage (of listeners) that the cluster can deliver means that Forever--and only Forever--controls market rates. Add 98.1 & the related-but-not-owned 2510 stations to the 6 local signals they own outright and no other company can even come close to what Forever can bring to an advertiser. Any advertiser, regardless of the demo. In order to take advantage of that situation, though, the Forever reps must focus their pitch on value, not price.

WBUS and WQWK have the entire rock spectrum roadblocked. They should be charging and getting the highest rates in the market. Cousin WOWY has an exclusive position, as well, and should be charging top rates, too. WLTS is the only "soft" station in the market--another exclusive position. Same for WMAJ. Each has a strong story to tell. The last thing they should be trying to do is to undercut those charging less.

Selling cheap spots is the easy way; charging high rates is hard--and requires a willingness to walk away from business until the advertiser gets the message: "We won't cave." In the long run, though, it's the only way to raise revenues.

Spoken like a true accountant that may know commodities but never sold a thing in his life. Tonnage means nothing. Ears mean nothing. Tough guy talk about walking on business. Give me a break.
Clients want to work with companies (and their AE's) of credibility, trust, creative ideas, things only achieved through relationship selling. Forever fails to build the right foundation for selling. Tough talk about not caving on rates is a joke when they cave on people, again and again. So often in fact as to be a running joke in the community, a humorless, derisive, sad joke.

Sorry for taking so long to reply, but I gather the subject is still on the burner.

Actually, I have personally sold millions in radio advertising, and the sales staffs I've directed have sold tens of millions. I've never sold commodities; only advertising. I've hired accountants, but have never so much as taken an accounting course. And, I'm again sorry, but this is exactly the way it is done.

By tonnage, I mean strength. In this case, being able to deliver more listeners "ears" to an advertiser than any other radio company in a given market. Another way to think of the process is "selling from strength."

Selling from a position of strength is a delicate process. The sellers must have complete support of their company in order to charge the market's highest rates. If management is saying "screw the rate, just get the order" or "do whatever it takes to get the buy" or "hit your goals or lose your job" no salesperson can take the high road. In order to drive rate up, every level of the corporate ladder must be behind the salesperson's efforts.

The sellers must sell with confidence, but never arrogance. "You can't buy around us!" and "You've got to buy us!" doesn't work. If you take that approach, advertisers will go tell you to stick it where the sun don't shine. Instead it requires a positive, diplomatic approach and an ability to demonstrate value unmatched by any competitor and an acknowledgement that superior value is worth the highest price.

Like in any business.

BTW, someone else noted that Forever & 2510 are not sold in tandem. That is no doubt true. But since the principles are admittedly partners in a third company and are in daily (at least continual) contact there is nothing to stop both outfits from making a similar strategic decision. Once upon a time it might have been called collusion or price-fixing, but those days are gone with the wind...

 

[tsimpson]

Grumpy for sure. I usually like Becker's remarks.I respectfully don't agree this time. Becks -Please reread what Steve wrote. I see Steve getting a great deal of grief on the board but I think that he can give his opinion here and I get why.

I am anxious to see if the board editor will remove Becker's derogatory remarks as has happened on other occasions or if they just back up buddies. I like Radio-info. I like that all sides can be heard. Steve is in a unique position as he is in radio and also is a buyer with a budget locally. Maybe we need to see how buyers here in town think. I know in my travels I am floored at the amount of adds on radio elsewhere. You can hear the cash flowing. It seems like Happy Valley has hit a rut about 20 years ago in spending level and how the advertisers perceive radio as well as other mediums. If you travel in the south or out west every single stop set on every station no matter the ratings or format is full. Car dealers, clubs, hospitals, lawyers, everybody that for some reason skims or skips radio here. Its a issue with all the stations here as you listen to ll of them the sets are all light on local advertisers. It also seems that advertisers here choose just one station or group to go on and don't on the rest. If you are any place else you hear about a car dealers sale on every single station within 30 miles.

So why is that? If Steve who is a radio "believer" says its perception of the buyers I tend to add it might also be self perception of the radio people who don't push for every single station to be getting a piece of the pie but just their own piece. I doubt that any of us have gone in and tried to get the old guard to change the levels of spending as much as we should. It seems that the budget some of the old school decision makers used when they started 20 years ago is close to the same. Again I think its our fault. Its just easier to fight over our radio crumbs.

 

[Becker]

Grumpy for sure. I usually like Becker's remarks.I respectfully don't agree this time. Becks -Please reread what Steve wrote. I see Steve getting a great deal of grief on the board but I think that he can give his opinion here and I get why.

I am anxious to see if the board editor will remove Becker's derogatory remarks as has happened on other occasions or if they just back up buddies. I like Radio-info. I like that all sides can be heard.

I guess you are referring to the opinion that I think Steve talks too much. Yes, it appears that was removed. Not sure why, it was just my opinion.

I did read through Steve's post and jackandcoke's post, they both seem to be right and wrong. One has a lot of sales know how and the other has a lot of consumer know how. In that regard, they are both right.

I don't agree that Forever holds a legal monopoly. I believe they own the number of FM's and AM's as they are allowed to own.

However, I see jackandcoke's point about price-fixing. If we were talking about real estate, for example, and talking about commissions, if real estate agents from different agencies were all agreeing to charge a 6% commission, they are price fixing and that IS illegal.

If you look at Forever and 2510, legally, they only show on paper as having a common interest. But it seems that WOWY is doing a fine job all by themselves. They're the only oldies station around here so they filled a niche. Froggy now has Joe to compete with, and other stations have 3WZ and even stations that can be picked up from Altoona and even Williamsport.

If people really want to sell radio, then one needs to go back to the old-fashioned, kick ass values of Bob Zimmerman. He wasn't a nice man. He was actually down right crappy. But ask anyone who worked under him for any length of time and they'll tell you they learned from him. It doesn't matter if they liked him or not. There are a lot of radio sales people in larger markets now and making tons of money because of Bob Z.

Only problem is that no one has the balls to invoke the spirit of a Bob Zimmerman around here. Instead of just working these wet behind the ears salespeople, they all just fire them.

 

[AvgListener]

Here's my Two cents if your in radio sales in this Market or Altoona Get out while you can. Unless you been doing sales for over 10years in these markets you really can't make any money I'm not bashing forever or 2510 or Magnum or even Tsimpsons station which by the way Ted your doing a great job keep up the good work.and by lowering rates you commission checks get smaller and smaller but what do I know. I think it comes down to good management if the sales manager or GM are supportive and work with the reps and be honest with them then for the fews sales reps that are paying attention they could make some mone, but to Honest with you all I really do not see any good GM's or sales mangers just package slingers or clueless GMs that's why the rates are sinking START SHOWING THAT YOUR STATION HAS VALUE... But Cause a lot of businesses Don't see it