Revenue Opportunities & Challenges

[John FL]

I don’t know if I’m behind the power curve on this, but I heard a local iHeartMedia station today discuss iHeart Ad Builder. Here is a link to it: iHeart AdBuilder

My initial reaction to this was this sounds like a great idea. It appears to be designed for smaller businesses that want to get their business noticed through radio. Whether this is something that is available in all markets iHeart serves, or something for small markets only such as where I am on The Treasure Coast, I’m not sure.

One thing I do know is radio advertising can be expensive for the smallest of businesses. So, I wonder if there are any price concessions here since this is designed to in effect bypass the middleman. I heard this service on an oldies station which is an FM translator fed from the AM. Obviously, we’re not talking a major station here but it’s opening an opportunity for revenue that perhaps would be harder to come by.

I suspect typical mom & pop operators may feel intimidated in dealing with a salesperson so at least with clicking through a site, if you don’t like what’s being proposed, all you do is click off. On the other hand, without feeling pressured, it just may arouse enough interest to move forward to the next step. For iHeart, they may find clients who may not have considered radio in their marketing strategy.

Also, in a local mom & pop radio cluster operator, I have noticed, the stopsets have gotten shorter. I remember one was just a minute, if even that. In smaller markets both in Florida and nationwide, I also suspect that small operators are having a harder time than the bigger operators. I have noticed that in several iHeart stations I listen to occasionally, the stopsets sound as I have long remembered them.

Mom & Pop operators need to be creative to survive. There are signs of a rebound. Plus, Florida is a state that is healthier than most from a business perspective. Still, with all of that, I wonder if larger companies who don't have a market presence will be buying these little owners up.

Smaller markets have plenty of other businesses besides retail. That's also true everywhere. Perhaps a self-service advertising website will attract a wide variety of businesses. Maybe smaller companies already have this. That’s a step in the right direction IMO. If they don’t, they should closely consider what iHeart offers. I’m impressed.

I’m sure the challenges seen where I am in a Top 100 market exist throughout the state. The bigger markets have their issues too. Big markets = bigger salary expense. Advertising dollars can’t dry up. If anyone knows if iHeart offers this service nationally or if other companies outside of iHeart are doing something like this, the readers and I would love to know.

 

[TheBigA]

I wonder if there are any price concessions here since this is designed to in effect bypass the middleman.

That is an example of something called "programmatic" ad sales, and yes it bypasses the traditional commission sales people. It's become popular during the pandemic because advertisers can buy without actual contact. I don't work for iHeart, but I understand that its available at a lower price.

Also, in a local mom & pop radio cluster operator, I have noticed, the stopsets have gotten shorter. I remember one was just a minute, if even that.

When the pandemic began, about half of the advertising disappeared, primarily because they were for businesses that were closed. As more businesses have opened, some of the advertising has returned. But if you're a smaller station, it probably hasn't. The bigger stations filled the positions with PSAs or bonus spots. The smaller stations with local programming didn't.

 

[PTBoardOp94]

Also, in a local mom & pop radio cluster operator, I have noticed, the stopsets have gotten shorter. I remember one was just a minute, if even that. In smaller markets both in Florida and nationwide, I also suspect that small operators are having a harder time than the bigger operators.

Yes. Local spots have taken the biggest hit. National advertisers (say, Kohl's or Chevrolet) appear to have cut back much less than smaller businesses. But small broadcasters (and smaller markets in general) don't get much if any money from those major advertisers.

 

[SomeRadioGuy]

Yes. Local spots have taken the biggest hit. National advertisers (say, Kohl's or Chevrolet) appear to have cut back much less than smaller businesses. But small broadcasters (and smaller markets in general) don't get much if any money from those major advertisers.

Actually, I almost disagree. Thinking back in memory to all the companies whove laid off and cutback.. its been bigger corporation. what do they depend on? national and regional buys

I suspect typical mom & pop operators may feel intimidated in dealing with a salesperson so at least with clicking through a site, if you don’t like what’s being proposed, all you do is click off. On the other hand, without feeling pressured, it just may arouse enough interest to move forward to the next step. For iHeart, they may find clients who may not have considered radio in their marketing strategy.

Also, in a local mom & pop radio cluster operator, I have noticed, the stopsets have gotten shorter. I remember one was just a minute, if even that. In smaller markets both in Florida and nationwide, I also suspect that small operators are having a harder time than the bigger operators. I have noticed that in several iHeart stations I listen to occasionally, the stopsets sound as I have long remembered them.

Mom & Pop operators need to be creative to survive. There are signs of a rebound. Plus, Florida is a state that is healthier than most from a business perspective. Still, with all of that, I wonder if larger companies who don't have a market presence will be buying these little owners up.

Smaller markets have plenty of other businesses besides retail. That's also true everywhere. Perhaps a self-service advertising website will attract a wide variety of businesses. Maybe smaller companies already have this. That’s a step in the right direction IMO. If they don’t, they should closely consider what iHeart offers. I’m impressed.

Smaller operators have gotten creative. I used to work full time for a station operated by a pa.. no ma.. and am now part time (not because of covid) and the station has..long before covid.. started hosting events and suchforth, special promotions.

 

[PTBoardOp94]

Actually, I almost disagree. Thinking back in memory to all the companies whove laid off and cutback.. its been bigger corporation. what do they depend on? national and regional buys

Because you don't hear about it in the trades when some small station in southern Illinois lays off one person.

 

[SomeRadioGuy]

Because you don't hear about it in the trades when some small station in southern Illinois lays off one person.

True... and while small markets are hurting, i think theyre doing better then big operators who get alot of national money and bigger accounts

 

[b-turner]

I think it has hit everyone pretty much equally. Lots of the major market and rated market stations have bonused lots of commercials as listening habits changed for working at home. The mentality is if they're still buying but most aren't give the guys that are still buying something extra...it can't hurt.

Small markets took a big hit. One station I know very well lost 50% of billing. It's still not 100%, perhaps 85%.

The things I have noticed: more people than ever are buying online from Amazon when they bought locally prior to Covid. The national chains have mostly kept advertising, luring some more of those small market dollars away from the local mom and pop because the mom and pop may have been closed or running limited hours. I fear this may be more permanent than temporary. If my fear is founded, some dollars lost with Covid might not be coming back.

 

[PTBoardOp94]

I fear this may be more permanent than temporary. If my fear is founded, some dollars lost with Covid might not be coming back.

I agree. In addition to changes that may occur in the business community, my company has lost a lot of good sales people, mostly to retirement. It'll be real hard to get revenues back up when you lose a third of the sales staff in one year.

 

[John FL]

That is an example of something called "programmatic" ad sales, and yes it bypasses the traditional commission sales people. It's become popular during the pandemic because advertisers can buy without actual contact. I don't work for iHeart, but I understand that its available at a lower price.

Appreciate the info. Even prior to the Pandemic, more and more of everyday life is coming under alternative methods of delivery from customer service to banking to even buying a vehicle. Radio is not an exception. For what it's worth, I give credit to iHeart for innovating.

For those who have a job in sales, this won't win any awards. But, in my view, those who exceed expectations in what they do will increase their odds and surviving in whatever new environment comes along. BTW, in the website mentioned earlier, iHeart's voice talent is used to produce spots. Small businesses don't have the funds to produce the kind of spots the bigger companies do. So, this also adds value to the local talent that remains in the market giving them an additional revenue opportunity and more meat to their resume. I believe this "co-partner" to traditional adverting approaches will gain traction.

When the pandemic began, about half of the advertising disappeared, primarily because they were for businesses that were closed. As more businesses have opened, some of the advertising has returned. But if you're a smaller station, it probably hasn't. The bigger stations filled the positions with PSAs or bonus spots. The smaller stations with local programming didn't.

I agree for the most part. Early on, the local mom & pop stations, at least in my neck of the woods ran lots of PSAs. Today, I'm noticing iHeart's stopsets sound like they always have at first glance. Then again there are self promotions in the mix such as "iheart Radio" etc. that have replaced some of the lost ads.

 

[b-turner]

The only thing I can add to this discussion is the need for some consultation. Especially smaller businesses are not marketing savvy. Many moms and pops pick and choose what they do based on the individual that came to see them, phoned or emailed with little overall thought of the outcome of their hodge-podge marketing. The advantage of a person assigned to an account is the ability to help coordinate marketing and make sure all media utilized works hand in hand to reach every consumer they can with a consistent and effective message.

Every business believes in advertising of some sort. Some are of the opinion radio is not a good choice. Those either had a bad experience with radio in the past or they've never tried radio. The trick to the success of these options is creating successful campaigns that make new believers in the medium as an advertising outlet. Anything less is working to alienate more from the medium. There's somewhat of an art to radio advertising that is not understood by some.

 

[John FL]

I've seen a number of reports indicating radio's audience is nearing pre-Pandemic levels. For the radio industry as a whole I would think this is good news. But has this also resulted in revenue springing back as well?

To circle back to my original post, I discussed iHeartMedia's 'iHeart Ad Builder.' I became aware of this program where a perspective client answers a few questions and with a mere few clicks, an ad campaign is generated. This is especially designed, I suspect, for the small business operator. I heard this on an oldies (translator) station that serves the Vero Beach community. From casual listening, I have heard a number of local spots I don't recall hearing earlier.

While I realize my listening observation is not scientific but just one example, it makes me wonder if Ad Builder is proving to be a good vehicle. I've seen some positive reviews to the program. As an outsider who has recommended radio advertising to a number of businesses over the years, I found that in virtually every case, there was fear to contact a sales person. Perhaps for mom & pop operators, there is a little trepidation for a hard sell.

I also wonder if states such as Florida are seeing a definitive upswing in billing as the state has opened its economy earlier than many. In occasional listening to both West Palm and Treasure Coast radio stations, the spots are sounding as normal as I have remembered them. In fact, I'm hearing adds for hospitality-related businesses from restaurants to weekend stay-cation type deals.

Our local NBC West Palm affiliate, WPTV NewsChannel 5, broadcasts a feature called "The Rebound." It's chock full of business and job opportunities as well as other info regarding life in the Pandemic. The Hospitality Industry in Florida has seen a definite 'rebound.' I saw a a report about how business leaders deem it all 'exceeding expectations.' It seems logical that as business grows that should have some kind of positive effect on radio billing as well. Again, this is just my thought process. I have no idea if radio is still lagging as companies may be a little nervous spending too much on a radio campaign.

I suspect radio in Florida may be showing a better rebound than in less populated states or ones that have been slower to reopen. Do we have any information on any of this? I'd be curious if radio in general and especially Florida is making that rebound.

 

[phildavis]

This is, in my opinion, a terrible idea. Most especially they offer you choices for your ads. I think one was 499 then 699 then 899 per week. What about the guy for whom 499 is too much? What about the guy who was thinking he would spend more than 899? And then there are the ad questions that everyone thinks "That's easy, every business should know this, we are just asking them their upcoming marketing plan.". A small market sales guy I showed this link to responded, "In my market that is laughable. Marketing plan? In my town, no-one even has a BUSINESS plan!"

And then they ask, "what would you like us to include". How many of you would venture to bet that a huge majority of the potential clients write "I want you to come to my place. I sell nice cakes and cookies" or something like that. And then chooses the "make the ad funny" button. How the heck can a poor production guy make anything from that?

Sales people are called CONSULTANTS for a reason. They consult, help, advise, teach, and all of that combined....is the selling.

What a terrible idea from a company who has an obsession of getting rid of its people, many of whom are actually pretty good because iheart spent a lot of money training them...so now they make this....why exactly?.