Ladies & Gentlemen, we have a problem. Our business model is broken.
Trying to make your daily, weekly or monthly budget while ignoring the 800-pound gorilla in the room is akin to the title of this article.
The Big Disconnect in Local Media
Nancy Lane is the president of the Local Media Association. Her latest article on LinkedIN really caught my attention. Like the fact that only 1% of publishers/station managers/GMs agree that their sales reps do a good job when it comes to selling digital. Why do you think that might be?
Gordon Borrell Knows
LMA research notes that most traditional media sellers have too many things to sell, making it hard for them to be consultative.
I’ve been hearing Gordon Borrell tell broadcasters exactly what they need to do to grow their slice of the ad pie for a couple of years now. At seminars I’ve attended, Gordon always adds that the companies doing the best job of growing their digital sales, employ sales people dedicated to only selling digital. It’s probably why this month Gordon Borrell was quoted as saying, “The pool of dollars is stunningly large, and radio often doesn’t get more than a ladle dip in the shallow end.”
Finding Good Sales People
If you’re a sales manager, director of sales or GM, the best way for you to find good sales people would be if your current staff would recommend working for your broadcast station, right?
Well, Nancy’s LMA found in their research that current media employees recommending others to work at their company came in at a 3. To put that number in perspective, the company that does this kind of research for all industries, found historically with all of their clients, that an average score for employees recommending their company as a good place to work was 36. In fact, the company hired to do the research by LMA had never seen a score of 3 before. It was the lowest they’ve ever seen in the history of their research.
That news alone should be a BIG wake-up call to everyone in media, since talent recruitment/retention was cited as the #1 challenge.
Digital is a Marathon, NOT a Sprint
A couple of the hard realities of digital is that it will take a long-term commitment and there still isn’t an overall business model to effectively monetize the audience being attracted.
Another hard reality is that the time to see a return on a company’s digital investment is longer than many CEOs want to hear about, plus the digital margins won’t look anything like the fat margins enjoyed by legacy media companies of the past.
Just One Example
To try and put all of this into a little more in perspective, let me share some of the cold hard facts shared in an article titled “Thinking of Starting a Podcast, DON’T.”
Jordon Harbinger writes “We are in the golden age of podcasting.” So why when asked if everyone should be starting a podcast does he give this super complicated advice: “DON’T.”
Here’s why, Harbinger has been hosting a podcast since 2006 (The Art of Charm) and candidly admits that if he had to start all over again today, he’s not sure he would. “It’s never been easy and it’s not easily profitable,” says Harbinger.
Today, Harbinger says his podcast is grossing about $480k/year, but in the beginning, he was spending around $10k/month with no promise of an immediate return on that investment. In fact, he suspects if you were to add it all up, they’d be just barely in the black after six years.
The Problem is Us
Bob Hoffman, aka The Ad Contrarian, says that technology has impacted all aspects of the advertising business. Before technology, ad folks were flying by the seat of their pants and their gut. However, Bob says now that we have technology, he’s not convinced we still have any better reality of what works and what doesn’t.
Hoffman sums it up this way, “In my mind, advertising technology has lost its credibility for two reasons. First, we haven’t acknowledged the unanticipated consequences of what has ensued. Second, we have refused to act honestly and correct the errors of our expectations. Instead we have created an ongoing crisis of credibility with a constant stream of half-truths, lame excuses, and public scandals.”
If digital is our future, we have to fix this big disconnect.
The Local Media Association has offered their research report for FREE and you can download a copy by following this link HERE
As LMA President, Nancy Lane puts it, “One thing is clear, the disconnect is hurting the industry’s ability to move the needle when it comes to growing digital. Politics, defensive postures, silos and more still exist. That needs to end tomorrow and only strong leadership will change that.”