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Radio Leaves Money On the Table

T

TheBigA

Walk of Fame Participant
Yes, here it is. Proof that radio companies are leaving money on the table. I've been saying this for years, and now we have actual statistics. Radio companies are not taking advantage of their incredible local branding by selling digital with broadcast. The reason it happens from what I can see is radio companies have put their digital platform under a different department from broadcast. Sometimes it's under technology, sometimes it's under marketing, but it's usually not included in the same food chain with broadcast. So the sales rep who is pitching the station to an advertiser doesn't mention web ads or podcasts or anything else because they only sell spots. Big mistake. Radio stations need to read this article, and then realign their departments so digital is part of the plan.

http://radioink.com/2017/05/18/hes-just-honest-digital-baby-ugly/
 
"So the sales rep who is pitching the station to an advertiser doesn't mention web ads or podcasts or anything else because they only sell spots. "
Interesting. My experience was different. We were selling spots and digital but the pressure was to discount (or give away) digital in exchange for a radio or TV buy. Then when there was a separate team for broadcast and digital the company wouldn't share knowledge between the two teams. That's the way I would go. I would have separate sales teams but shared CRM data with incentives to both teams to sell both sides. I'm out of radio and running my own digital ad business. I gave up on broadcast companies ever getting it right.
 
SaltyDog said:
"So the sales rep who is pitching the station to an advertiser doesn't mention web ads or podcasts or anything else because they only sell spots. "
Interesting. My experience was different. We were selling spots and digital but the pressure was to discount (or give away) digital in exchange for a radio or TV buy. Then when there was a separate team for broadcast and digital the company wouldn't share knowledge between the two teams. That's the way I would go. I would have separate sales teams but shared CRM data with incentives to both teams to sell both sides. I'm out of radio and running my own digital ad business. I gave up on broadcast companies ever getting it right.
Click to expand...

The whole problem is that radio uses too many internal standards and practices.

The advertiser does not want over the air radio, streaming, clicks and page views. They want sales.

Broadcast companies that understand that they are not selling a platform but a way to reach consumers will develop options for advertisers to reach those consumers with specific blends of different over the air and digital delivery products.
 
SaltyDog said:
I would have separate sales teams but shared CRM data with incentives to both teams to sell both sides.
Click to expand...

My take is it's confusing for the client. They have to get two meetings for the same company, pay two bills, and potentially play one side against the other. What's wrong with training one salesman in two products? How hard is that? We need to find a way to simplify this for the client, and get them what they want in an easy package. We always hear that selling is about relationships. That means it's not about on-air vs online. It's about both. We need to start thinking this way. PDs need to think about integrated brand presentation. A way to continue engaging audiences 24/7 on multiple platforms. It's not that hard. Save all the technical stuff for the office folks to figure out. The salesman just needs a good product to sell.
 
"My take is it's confusing for the client. They have to get two meetings for the same company.."
They deal with two companies now. I worked for a national company that had its own digital brand and my customers were for the most part completely unaware that our company also owned the local TV station (but it applies to radio too.) You can train one salesman in two products but in my experience the customer can't see one person as an expert in both. I can appreciate your different point-of-view but another time I also ran a radio sales team selling both products and every market in our company did it this way. It didn't work.
 
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SaltyDog said:
It didn't work.
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According to the article, having two teams isn't working either. Part of the problem is the digital products sell for about 10 or 20% of the price of on-air. So the commissions are smaller. Smaller commissions aren't attractive to killer sales people. So you end up getting one guy selling part time. Not very effective. And he doesn't have the contacts the on-air guy has.

The bigger problem to me is radio companies for the most part aren't building digital platforms at all. They're just selling ads on web sites, and that's not very challenging. Pre-rolls on podcasts? Also not very challenging. These companies have the content, but can only see one use for it: On-air. So we have maybe two companies that understand the situation: iHeart and Townsquare. That's a fraction of the radio stations in the country. Everybody else is treating digital like a stepchild. Maybe that's why you gave up on broadcast companies. I see what you mean.
 
Maybe we're both making an erroneous assumption that it CAN work. Maybe digital is such a different business that it really represents diversification and not growth. I remember when the Mays Family still owned Clear Channel, they touted the creativity of a GM who was hitting his NTR budget by growing and selling Christmas trees on the the station's very large property. It was great but it wasn't adding to the radio business, he had diversified into an entirely different business.
 
SaltyDog said:
Maybe digital is such a different business that it really represents diversification and not growth.
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I don't think it's a different business at all. Heck at one time CBS owned Fender Guitars and the New York Yankees. I would agree that those are two different businesses. But digital can be an integral part of broadcasting if its managed well. I think we're both saying it's not being managed well. Historically, broadcasting grew out of electronics companies like Westinghouse, Crosley, RCA, and General Electric. Even AT&T was an early investor. Over the past 25 years, radio has gotten out of the technology business. At a time when technology has exploded. Imagine if a radio company had come up with the Amazon Echo. What kind of background does Amazon have in creating such a product? Yet its a game changer. Wouldn't you say that's a different business for them? Digital is an area for growth in a business that at best is holding steady. If broadcasters don't invest in digital, they're setting the stage for their own irrelevance. They need to fix this thing.
 
TheBigA said:
If broadcasters don't invest in digital, they're setting the stage for their own irrelevance. They need to fix this thing.
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The problem with broadcasters mindset about digital is; they think it's only used to-support, or as a sidecar to the traditional broadcast model. For years TV and radio stations and networks gave away ad space on websites to secure contracts on stations, then halfheartedly included promotion of their website on the air to appease that same advertiser. When you think about it, that mindset was similar to the Crosley, RCA, and Westinghouse parent model of the 1930's, where the parent was using the new medium of radio to promote the sales of their radios.

I guess what you're saying is true to a certain extent, that broadcast ownership aren't as diversified as modern businesses operate, so when one form of business was down, another helps bolster the overall company. The company I worked for several years owned several radio, several TV, was one of the largest outdoor advertising companies in the U.S., and also owned an NBA team. The common thread in what seems like a diversified business portfolio? Advertising.
 
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Kelly A said:
I guess what you're saying is true to a certain extent, that broadcast ownership aren't as diversified as modern businesses operate, so when one form of business was down, another helps bolster the overall company.
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So the word is as I said, diversified as opposed to growth. A different business to operate so when one is down, the other is up.
TheBigA said:
Part of the problem is the digital products sell for about 10 or 20% of the price of on-air.
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If digital is about 10-20% of on-air, then the offset is of small consequence to the decline in the larger business.
 
SaltyDog said:
If digital is about 10-20% of on-air, then the offset is of small consequence to the decline in the larger business.
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I agree, but as the article states, there's a reason why digital is selling so cheaply. That's why I say radio is leaving money on the table.

You have companies like Cumulus, Saga, and Alpha that do very little digital. It's a very small part of their business. But if they worked a little harder at it, put creative people in charge of content, and allow experienced sellers to sell it, imagine what it could do.
 
TheBigA said:
You have companies like Cumulus, Saga, and Alpha that do very little digital.
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I was thinking I really don't know what kind of digital products any of these companies are offering. Are we talking ads in the audio stream? Website display? Just what is their digital product lineup?

I'm impressed with much about Entercom but I don't think much of their Smart Reach Digital division. Not because I don't think they are any good, I really don't know if they're good or not. I am convinced that selling a suite of Internet products (websites, SMS, SEO, PPC etc) is a business that doesn't, as they say, "scale" well. I see Smart Reach Digital as a competitor to companies like YP.com, Hibu, Hearst Media Services/Local Edge et al. I make a decent living picking off their customers but only on a small scale.
 
SaltyDog said:
I was thinking I really don't know what kind of digital products any of these companies are offering. Are we talking ads in the audio stream? Website display? Just what is their digital product lineup?
Click to expand...

That's really about it. Maybe a little podcasting, but they haven't built their own platform the way CBS did. Building a digital platform is cheaper than building a radio station. All it takes is imagination.
 
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