The latest survey from the RTDNA (Radio Television Digital News Association) shows how precarious the advertising revenue stream that sustains your local radio station is during these global pandemic times.
Of 350 radio managers surveyed, declining revenues were cited by almost 40% of them as the biggest threat to their continued existence.
Ad Market Recovery Coming in 2021
We’re a little over six months into a global shutdown caused by a novel coronavirus, that is expected to impact our world directly for almost two years, and have lasting impacts that may stay with us for the rest of our lives. It could be very tenuous for local radio stations to be able to survive until a recovery starts sometime in 2021.
As you can see, MAGNA sees most of the recovery occurring with online videos, mobile, social media and search. Traditional media like radio, print and local TV will still find themselves in the fight of their lives.
Last week, I wrote about “The Better Advertising Mousetrap” and how, due to the internet, combined with powerful computers and algorithms, social media was able to sell advertisers, “certainty.” I wrote how the internet had created a new marketplace, that of human futures, at scale, and this was producing trillions of dollars for these internet companies, making them the richest companies in the history of humanity. The real advantage social media has over traditional media is their development of persuasive technology that exploits a vulnerability in human psychology, which even when you know how it works doesn’t inoculate you from its power to change you.
You can read that article HERE
Other Threats to Radio
Radio people, both past and present, bemoan how corporate cuts and consolidation have cut deep into the industry’s ability to innovate its programming. Also, the plethora of media options available to today’s radio listener is overwhelming, especially with the advent of the smart speaker and audio streaming.
Expect that growth in advertising will be in the digital realm, while traditional media like AM/FM radio and TV, barely stabilize.
Gordon Borrell and his associates concur with this outlook in their latest sneak peak of their research.
Hootsuite and Altimeter just published their latest report titled: “The Social Transformation.” In it, they say “executives often underestimate social’s economic, cultural, and transformational value. Understanding the true value and potential of social media has become more imperative as organizations look for new possibilities in the post-pandemic economy.”
- 77% of CEOs report digital transformation efforts have significantly accelerated
- 70% of CEOs are prioritizing changes to customer behavior as the most important factor setting their future direction (Source: Deloitte)
This report lists three main areas that businesses need to focus on to truly realize the value of social media:
- Learn how to tap into social media’s unique ability to develop and deepen relationships across multiple stakeholders.
- Realize and extend social media’s ability to drive efficiency and value beyond marketing and communications.
- Leverage social media’s existing organizational structure and processes to catalyze digital transformation.
Radio personalities were the industry’s “secret sauce” that help local radio to build deep relationships with its listening audience. Likewise, tenured sales people built similar relationships with local radio advertisers. Sadly, both areas of the business have seen a Reduction In Force (RIFs) that has severed these important relationships forever. Into that vacuum has come social media and its addictive powers to build strong relationships with its users.
Deep Relationships Require Sustain Engagement
The report also reveals that respondents (64%) using social media have found it helps their business to build strong relationships with their customers. Through in-depth interviews, Hootsuite and Altimeter found that “relationships develop with sustained engagements that lead to conversations across multiple channels, not just on social media.”
Holding All the Aces
Traditional media is looking down the barrel of an advertising juggernaut. It’s hard to win when your opponent is holding all the aces.
In 50-years of working in the radio industry, not one of my favorite radio stations knows anything about me. After just 10-years on social media, there’s virtually nothing that these companies don’t know about me.
See the problem?