How is Radio Affected by Being Efficient?

EfficiencyI started my professional radio career in the 10th grade of high school. However, I started dreaming about being a disc jockey for as long as I can remember. I built my own AM/FM radio station in the basement of my parent’s home and broadcast to about a three block radius around my house.

Lots of People

In my early professional days, radio was people, lots of people!

Every aspect of running a radio station required people to make things happen. Sales, bookkeeping, reception, disc jockeys, copywriters, news anchors, reporters, engineers, production and promotions people with layers of management on top of every department, up to the general manager who oversaw the entire operation.

As an example, CKLW a stand-alone AM radio station in the Detroit metro, had 23-people just in their news department. Today that’s about double the total number of people running a cluster of AM/FM radio stations in any metro.

Was radio efficient back then? No.

Was radio effective? YES!

Did radio make money? Tons of it!

The Gatekeepers

What traditional media had back then, were gatekeepers. Newspapers, magazines, radio and television had people charged with making sure there was a good flow of information and entertainment. These people acted as filters, and overtime they developed standards and ethics that all Americans could rely on.

It wasn’t perfect and mistakes were made, but it got us through the 20th Century and unified us as a nation.

The New Gatekeepers

The birth of the internet ushered in a new gatekeeper, the algorithm. Now lines of code would replace people as the filter for what Americans read, see and hear. Unfortunately, these lines of computer code lack transparency in how they filter the flow of information.

Have they been encoded with a sense of civic responsibility? Who knows?

Is the flow of information the same for everyone? No, it has been personalized to our likes and dislikes. It has put each of us in our own information silo.

Bowling Alone

In 1995, Robert D. Putnam wrote an essay entitled “Bowling Alone: America’s Declining Social Capital”. The essay chronicled the decline in all forms of in-person social interchange. What Putnam saw in his research was that the very foundation Americans had used to establish, educate and enrich the fabric of their social lives was eroding. People were now less likely to participate in their community, social organizations, churches, and even their democracy.

This trend has only been accelerated by social media and the internet. The unintended consequences of the internet are, that it has isolated each of us to a web of one. Algorithms have taken what Putnam saw happening in the last century and put it on steroids in this century. All in the name of driving more efficiency.

Efficiency Bubble

The “efficiency bubble” means that efficiency is valued over effectiveness in today’s world. It’s a term coined by Will Lion of BBH advertising.

Rory Sutherland, Vice Chairman of Ogilvy in the UK, recently shared this personal experience that demonstrated the efficiency bubble.

“The absurdity of the efficiency bubble was brought home to me in a recent meeting with an online travel company. The conversation repeatedly included the mantra ‘the need to maximize online conversion.’ Everyone nodded along. Clearly, it is much more efficient for people to book travel through the website than over the telephone, since it reduces transaction costs. But then someone – not me, I’m ashamed to say – said something revelatory: ‘Ah, but here’s the thing. Online visitors to the site convert at about 0.3%. People who telephone convert at 33%. Maybe the website should have a phone number on every page.”

“Perhaps the most efficient way to sell travel is not the most effective way to sell travel. What, in short, is the opportunity cost of being efficient?”

“Nobody ever asks this question. Opportunity costs are invisible; short-term savings earn you a bonus. That’s the efficiency bubble at work again.”

Consolidation is Just Another Word for “Efficiency”

During radio’s massive consolidation, Excel spreadsheets produced by new minted MBAs screamed a multitude of ways to have radio stations become more efficient. Unfortunately, the fast-lane involved the elimination of tens of thousands of radio jobs.

And it’s still going on as I write this article.

I don’t ever remember anyone asking about “opportunity costs” being sacrificed in the process.

In the last radio property I managed before entering higher education as a broadcast professor, I would spend my final year going to corporate meetings about Reductions In Force (RIFs) and coming home with a thumb drive that had dates to open new pages in an Excel spreadsheet, that listed what people and what departments were to be eliminated next.

It’s my belief that efficient radio chases away listeners, effective radio creates them.

Blame It on Competition

Tech Guru Pete Thiel blames the efficiency chase on competition. “More than anything else, competition is an ideology – the ideology – that pervades our society and distorts our thinking,” says Thiel.

When all radio companies chase the same efficiency metrics, they all end up sounding the same, their websites end up looking the same, and in essence, they’ve turned the creative medium of radio into a commodity.

Deregulation of broadcast, as I wrote about in The Birth of Radio in America article, now has virtually all of the radio stations in a radio market owned by one or two companies.

Radio always stole great ideas from other radio stations around the country, but most often those stolen ideas were massaged and improved upon in the process. Everyone was upping the game through their own creativity lens, and each radio station had its own unique sound.

Unfortunately, along with corporation radio came the concept of “Best Practices”. This would be yet another contributor to the end of personal creativity at radio stations, all in the name of more efficiency.

Emotions

Roy H. Williams, the Wizard of Ads, says we buy things emotionally and justify those buying decisions rationally. The pursuit of efficiency is a rational answer to an emotional problem.

The radio business was never built on Excel spreadsheets and doing what was most efficient, it was built by creative people who touched others emotionally. Be it station imaging, air personalities, promotions, contests, community events, advertising or marketing, radio always went for people’s hearts.

The successful radio stations today still foster those emotions in their listeners and advertisers.

They’re just becoming harder and harder to find.

 

 

 

8 Comments

Filed under Education, Mentor, Radio, Sales

8 responses to “How is Radio Affected by Being Efficient?

  1. Greg Cassidy

    You have covered a lot of ground with your article. In general, today’s radio is not focused on programming. It is focused on revenue; Digital revenue. Recently at a large market cluster the market manager and sales manager we’re both replaced by a person with zero radio station operation knowledge, zero understanding of programming. The new person is an expert on generating digital sales revenue. This is the current direction of many of today’s big radio companies. Radio is evolving into its next form as it prepares to celebrate 100 years.

    Liked by 2 people

  2. Josh Gertzog

    A couple of comments:

    Radio, when used well, is effective. It can be efficient as well.

    Effectiveness trumps efficiency all of the time. If you are effective, but not efficient, you may spend a little too much, but you get what you were intending. If you are efficient, but not effective, you’ve wasted all of your money.

    Radio consolidation has been an attempt by ownership to be efficient while remaining effective. The results are mixed….but the attempt is like walking on the edge of a knife blade; a simple mistake ends the effectiveness.

    Ownership has been navigating this dichotomy for the financial markets. Many companies are publicly traded; others, that are not, treat themselves as if they are. Therefore, the delivery of bottom line goals has been paramount. The “easy” way to do this has been though RIF’s and other cutbacks. Once again, choosing efficiency with the potential consequence of losing effectiveness is fraught with peril.

    Finally, the focus on Digital is an offshoot of the relationship with the financial markets. The financial markets are unimpressed with success of traditional media, because of sterotypes, lack of education, but as much from the failure of radio to make the “hard” moves of new audio related revenue development. This is, in my opinion, fools gold. While digital has a place in the advertising picture, it is more complicated than just finding digital solutions paired with radio. Every radio cluster, every tv station, every cable company, and probably most other media options are offering digital solutions, and all say that there’s is better and cheaper. If nothing else, think of the message that sends the advertising community.

    I am still convinced that radio, as an audio medium, can be tremendously effective. But ownership has to make those hard choices in challenging the ratings=results paradigm. Radio needs to become more employee and client focused than ever. There are many ways to do it…it starts when a station’s identity matters less than the brands of their clients. And that’s a “hard” decision to make!

    Liked by 1 person

  3. “Efficiency expert” has been a nasty, derogatory term for decades, often for good reason. How many businesses of all kinds have been ruined by bean-counters who “save” companies money by destroying the very thing that made that company successful in the first place? Cost-cutting usually means finding cheaper (in both senses of the word) ways of doing things.

    Like

  4. From the small market perspective. I would love to have a full staff of DJ’s, news reporters, etc. Insurance, power bills, phone bills, rent keeps that from happening. The next best thing is voicetracking. It beats the days of a 24 hour satellite format, and if done properly sounds live. With social media and increased competition and many other factors, a full time staffed radio station in most small and medium markets isn’t going to happen. Our industry has also shifted, and has different needs than 30 years ago. Many saw the writing on the wall and shifted to engineering, sales, promotions etc. If you walked into a station and was looking for one of the jobs above (with expierence) you will be hired. Many who still hold on to the days of being a “DJ” have adapted by voicetracking several stations and doing well. “Efficiency” also means paying the bills and surviving month to month in small markets.

    Liked by 1 person

    • I understand the economic challenges facing today’s radio broadcasters. The problem I have is with this concept of “sounds live” or “appears local.” When we think we’re fooling people, we’re only fooling ourselves.

      If any business can not properly provide a product or service, then maybe it’s time to decide if it should remain in the business.

      When I say something like that, it reminds me of Jack Nicholson’s character in “A Few Good Men,” when he says “You can’t handle the truth.” It’s a reality few want to confront. I get it. But wishing it isn’t so, won’t make it go away.

      Shotgun Tom Kelly told me how frustrated he became when advertising people asked a VO guy to sound like “Shotgun Tom Kelly.” He said, “why don’t they just call me and get the real thing.”

      I understand where he’s coming from and I think it says a lot about the radio industry trying to be coy.

      Like

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