Tag Archives: Advertising

Welcome to the Social Capital Age

64We live in interesting times. The internet has changed our world in a revolutionary way. In its current form the internet is now over twenty-years old. There are college students today that don’t know a period of time when there wasn’t an internet.

The 5 Media Revolutions

There are only five periods in world history where communication has undergone such a massive change to be called a “revolution.” The first would be the invention of the printing press and movable type. The telegraph and telephone would be the second time. The ability to take photos, record music and voice and create motion pictures would be third. Radio followed by television would be the fourth time and the digital/internet period – the period we are living in today – is the fifth communications revolution.

Each communications revolution brought with it a period of adjustment and made the world a little more connected. Entrepreneurs who could envision the future would leverage each media revolution to their economic benefit.

The Post-Digital Age

Once upon a time, people spoke of the electrical age and the computer age. You don’t hear anyone say that anymore. Slowly fading away are people calling things digital or internet. It’s when people begin to take a new innovation for granted that it begins to have social impact.

Social Capital vs. Technical Capital

In the previous four media revolutions, technical capital is what separated the winners from the losers. What makes the fifth media revolution so confounding to media professionals is that every new media device sold today creates not only a media consumer but a media producer as well. By 2020 it’s estimated that there will be nearly eight billion people living on planet earth and 65% of them will be connected to the internet. That means there will be over five billion people who will be able to create content and distribute it over the internet.

“The moment we’re living through

 is the largest increase in expressive capability in human history.”

 –Clay Shirky

Professor Shirky also says that as these new social media tools get technologically boring, they get socially interesting. In other words, as the value of technical capital goes down, social capital’s value increases.

NPR Sees Large Ratings Increase

On Tuesday, October 18, 2016 NPR reported that its multiplatform journalism has seen a tremendous audience growth. NPR President and CEO Jarl Mohn said it showed that NPR was doing a far better job of its public service mission, community engagement and local impact.

What NPR is very effectively doing is increasing the value of its social capital. It is focused on its listeners who have an appetite for strong reporting and a need to be in the know.

Today’s media landscape allows one to convene an audience, but not control them. It takes discipline to understand this change in our 21st century communications world.

Advertising’s New Challenge

Older media folks still think of media in terms of radio, TV, newspapers, magazines etc. Today any person over ten doesn’t make this kind of distinction.

Radio to my college students is anything that they can get through any media device that is primarily audio-only. Satellite radio, Pandora, AM, FM is all radio to them. Likewise is the idea of ecommerce, mcommerce or brick-and-mortar, for today’s consumer it’s just buying stuff they want, when they want it.

Birds of a Feather, Flock Together

The concept of reaching a mass audience through target demos is over. It’s no longer about age, as it is state of mind. Today the game is about reaching a unique audience that is socially connected by their interests. Shared interests are the new “local.” The future is in the careful creation of the ad itself, which speaks to the interests of the consumer and then placing it in a media environment that is in sync with the product or service being presented. Podcasters are doing this quite effectively.

Media that defines what it is, monitors all content to be consistent with that definition, will be the media that wins for both its audience and its sponsors.

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Reflecting on Radio Show 2016

60The radio show was close to home this year, just down the road from my university, in Music City USA, Nashville, Tennessee. Plus, the Tennessee Association of Broadcasters decided to roll their annual convention into an opening event at the Radio Show. So as soon as I finished my morning class, I was on the road to Nashville.

Tennessee Association of Broadcasters Kick-off

Whit Adamson, President/CEO of the TAB, put together an amazing opening reception and event inside the Country Music Hall of Fame. We were welcomed by TN Governor Bill Haslam who declared it “Radio Week” in the State of Tennessee. Then the Mayor of Nashville, Megan Barry, gave us a warm welcome to Nashville where she declared it “Radio Week” in Music City. The “red carpet” was fully rolled out for the radio industry and attendance would set a new record for the Radio Show.

Pillsbury’s Broadcast Finance Forecast Leadership Breakfast

The good news is radio is the “King of Audio.” The bad news is that revenue growth for radio underperformed ad spending post-recession. Radio’s 7% share of all advertising is predicted to decline to 6% by 2019. Why? Digital ad spend will grow significantly (40%) by 2019. And radio will struggle to reach mobile users.

The big takeaways from this session were: Investors want to see new growth catalysts like NextRadio, more event revenue and growth in digital/mobile ad revenues. Investors want no more than 3 to 4 times leverage with more industry consolidation. All of this investors feel will yield more “free cash flow.”

Investors worry about audience fragmentation and Millennial reach, radio’s competition in the car dashboard, the challenges coming from digital/internet, continued uncertainty over royalties and excessive leverage.

Focusing on Your Career Future

The room here was filled with young people. Radio mentors from all areas (except engineering) met with tables full of students and recent graduates to talk about the many opportunities available in today’s radio industry. The mood was once of excitement and enthusiasm.

Brittney Quarles and John Focke both would share their personal radio journeys with students as they shared advice such as: “the industry is small, don’t burn any bridges” and “find a champion for you and your talents” and “be careful who you share your dreams with.” The right mentors are essential to your career.

Beyond Basics – The Prosperous, Professional You

John Bates, Elizabeth Burton and Heather Monahan led a session in how to reach beyond your limits and build a better “Brand You.”

John Bates shared “3 ways to inspire and connect”: 1) logic is not the way, 2) human eyes connect you to another person and 3) be authentic. For example, people don’t connect with your successes, but your messes. You message is your mess. But above all else, “Make A Difference.”

Elizabeth Burton drilled down the importance of your online brand and that today your online activities build your reputation.

Heather Monahan told us that people take only 10-seconds to make an opinion about you when they first meet you. 50% of communication is nonverbal and your attitude is everything. And if you want to know what your personal brand is, ask others this question: “What value do I bring to you?”

The Digital Dash – Improving the Consumer Experience

Fred Jacobs, Steve Newberry and Scott Burnell (from Ford) all shared their perspective on radio in the car. The first big thing is car manufacturers don’t call it a radio in the dash anymore (and probably haven’t for some time) but “the center stack.” Into this part of the dashboard, everything a car owner wants can be accessed.

Steve Newberry (former NAB joint board chairman) really brought the whole issue home with his analysis of the technology revolution by saying there are two kinds of events: disruptive and modifying. Disruptive events would be things like television and FM radio. Modifying events would be things like cassette tapes, CDs and MP3s. Disruptive events change the landscape and prevent an entity from doing things the way they’ve always been done. Television stole radio’s programming and added pictures and radio had to reinvent itself with new kinds of programs. Modifying events such as records being replaced by cassettes and 8-track tape, then CDs replacing both of those to be replaced by MP3s merely modified the way people listened to their own music libraries but not how they used radio. The new digital/internet connected world is a disruptive event and radio needs to once again adapt to this revolution in communication. The future is bright if radio is agile and adapts.

Perception vs. Reality – The True Power of Radio

My first Arbitron rep was Pierre Bouvard. He’s a fountain of information. His presentation on “7 Things Brands Have Completely Wrong About Radio” tells the story in great detail and shows the challenges faced by radio sales people today.

Podcasting

Steve Goldstein did an amazing presentation on podcasting by starting out with this Thomas Edison quote from 1922 “The radio craze will die out in time.”

Today mobile is eating the world. 20% of audio listening comes from the smartphone. For radio, podcasting is all about retention, growth and relevance.

Podcasting is no longer niche. It delivers the demos advertisers want. Podcasting is different than broadcasting. There’s money to be made in podcasting and radio has the perfect megaphone to promote podcasts to its audience. That’s radio’s “secret sauce” that podcasters wish they had access to.

Radio – The Local Media Company of the Future

Gordon Borrell and his research company are doing some incredible studies on the future of advertising. He immediately got the audience’s attention when he said in the last ten years $56 Billion has disappeared in advertising expenditures.

Banner ads are dead. But digital is not.

Local advertising growth is forecast to increase 7.6%, but non-digital will see a 6.9% decline in ad spend and digital will see a 22.4% increase in ad spend. In fact, 2017 is the year that digital advertising will eclipse all traditional media.

Borrell said when advertisers cut ad spend in one medium they spend it in another medium. Radio will continue to be bought, but only those stations who have well-trained representatives that understand the realities of today’s advertising and can put together a total marketing plan that goes beyond simply radio spots. Advertisers will partner with any media company who has reps that listen.

The good news is traditional media – like radio – is still necessary to drive digital advertising goals and deliver maximum digital R.O.I. (Return On Investment).  You can see Gordon’s full PowerPoint deck here.

Final Thought

The mood in the halls and in the sessions at this year’s Radio Show was very upbeat. The things being discussed and presented did not shy away from the realities all ad supported media face.

Anyone who attended came away with lots of action steps that need to be implemented immediately.

Radio currently is the #1 Reach & Frequency medium in the United States of America.

There’s no time to waste. It’s time to roll up our sleeves and “Make A Difference.”

Radio’s future depends on it.

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Millennials Love Radio

52News is about the exception. A car driving down the main street of your hometown is not news. But let that “radio on wheels” run into something and that’s news.

It’s the same with radio listening. The fact that 92% of the population of America listens to radio every week is not news, but finding out one of them listens to something other than radio grabs the headline.

Millennials Outnumber Boomers

It was just a year ago that Millennials outnumbered us Baby Boomers. That was news, because the Boomers have ruled the roost for several decades. So how does radio listening stack up for the Millennial generation? 91.3% of Millennials are reached by radio every week. 94% of GenX’ers are reached by radio and us Boomers come in at 93.5% reached by radio every week according to Nielsen.

Millennials Don’t Hate “Old Media”

MediaLife magazine just reported on what’s really happening with Millennial media usage versus what many believe is happening. Example: Newspapers – more Millennials read a newspaper once a week than use a tablet. Another example: Radio – more Millennials crank up the radio (80%) than have an MP3 player (45%).

What Millennials Aren’t In-Love With

What you might find surprising is that Millennials aren’t swooning over Satellite Radio, smartwatches and connected cars. In fact, Millennials would rather ride share or use public transportation than even own a car.

Time For Another Paradigm Shift

It was Thomas Kuhn who is credited with coining the term “paradigm shift.” He defined it as changing from a set of beliefs or views that members of a community all shared.

It’s hard to predict the future and many of the models people develop to predict levels of risk really miss their mark. Two examples are the Fukushima nuclear disaster where the “experts” said a twenty-foot wall would protect the plant from any Tsunami. However it was a twenty-four foot wall of water than would take out the plant. And everyone knows that insurance companies are in the business of predicting risk, its how they come up with the premiums people will pay them. So how did AIG miss the financial collapse in 2008 that would bring down the company?

The Lesson of Procter & Gamble

Procter & Gamble aka P&G is a huge company. They primarily make cleaning products; soap.

When commercial radio was born in 1920, P&G was quick to move their advertising monies from print to radio.

When TV came along, again P&G would lead others in moving their advertising monies to TV. (The radio & TV “Soap Opera” name comes from the creation of serial dramas that were created by P&G to sell their soap products in.)

When the internet came along, P&G was a leader in moving their ad monies from traditional broadcast to online.

Except this time, it didn’t work as it had in the past.

The Wall Street Journal ran a story entitled “P&G to Scale Back Targeted Facebook Ads.”

“Procter & Gamble Co., the biggest advertising spender in the world, will move away from ads on Facebook that target specific consumers, concluding that the practice has limited effectiveness.

Marc Pritchard, P&G’s chief marketing officer, said the company has realized it took the strategy too far. ‘We targeted too much, and we went too narrow’

P&G could be the bellwether on how consumer goods companies and big brands use digital advertising. Over the past year some marketers, specifically consumer product companies, have discovered they need to go ‘much more broad’ with their advertising”

Bob Hoffman, “The Ad Contrarian” has been predicting this for some time. He recapped his prediction on a recent one of his blogs that you can read here.

Advertising Is Sloppy

The problem with today’s “targeted advertising” is that it misses lots of targets. Great advertising works, in part, because it’s sloppy. By that I mean it produces results because it reaches a large and diverse audience through a mass medium like radio.

Radio is the number one reach and frequency medium in America today.

I’ve advertised on radio stations I’ve run for help for positions we had open. What never ceased to make an impression on me was how many people I’d interview who came in for the advertised position and had never heard the ads. How did they know about the opening? A friend of theirs who heard the ad told them about it. That’s what I mean by advertising being sloppy. That’s what I mean about hitting the target even when you are not aimed at it.

Great Ad Copy

The one thing that is critical is your advertising copy. Great copy will produce results on virtually any radio station. It’s not about being on the most listened to station in the market that will produce results for the advertising client, it’s the radio message itself that will make the difference. Next, it’s the ability to deliver that message consistently day-in and day-out, fifty-two weeks a year.

Breaking News

Radio has always been the advertising medium that gets results when used correctly.

To be successful, you need to build your brand in the mind of the consumer. Radio let’s you whisper in the ear of the consumer every day.

Radio will not only help you build your brand but keep it top of mind too.

The “breaking news” is target marketing is OUT.

Mass media sloppy advertising is IN.

 

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The Day the “Dumbest Idea” Invaded the Radio Industry

shareholder valueLast week I wrote about killing the goose that lays the golden eggs. It was my way of comparing the Aesop fable to the world of American radio. It got a lot of discussion. But I felt that while I touched on how radio operators twenty years ago wanted to harvest all the golden eggs immediately versus waiting to get one each day, by virtue of a last minute insertion into the Telcom Act of 1996 that basically removed the ownership caps on radio, there was – as Paul Harvey used to intone – ‘the rest of the story’ to be told.

The rest of the story involves “the dumbest idea.” I grew up about a decade after World War Two ended. This was the period when America enjoyed an extended period of economic growth and a shared prosperity. By “shared prosperity” I mean it was a time when the workers who produced a product or service shared in the profits produced by the company. Managers and workers would see their income grow together. As everyone’s pay increased, there was more discretionary income to spend. This was the rise of the middle class in America. All boats were rising with the economic tide.

In 1968, I started on-the-air at one of my hometown radio stations while in the 10th grade in high school. I was paid the minimum wage; $1.60 per hour. Did you know that 1968 was the year when someone making the minimum wage had the most buying power for that rate of pay? The equivalent in 2012 dollars is $10.34 per hour. So what happened?

Somewhere in the 1970s things changed. Firms began to focus on themselves. The productivity gains produced by the workers were no longer shared with the workers. Since no one complained, this new way of doing business continued.

The 1980s really saw this new operational style take hold. And as it did, incomes for the middle class stagnated. When the middle class incomes stop growing, the ramifications on the rest of the economy are magnified. Workers no longer have discretionary income to spend. This was initially covered up by women entering the workforce producing two wage-earner incomes. Then when that ran its course, credit cards, second mortgages would keep the party going under false pretenses.

Today we are in a vicious cycle of decline.

What changed in the 1970s was a new idea about what metric should be used to measure the success of a business. Before this new idea was born, Peter Drucker’s measure was the rule. The purpose of a business, said Drucker, was to create a customer. But that went out with leisure suits, the new crop of business wizards would proclaim. What replaced it was something that even GE’s Jack Welch has called “the dumbest idea in the world.”

What was this dumb idea? Increasing shareholder value.

In an effort to offset declining profits and performance, a new operating modus operandi was conceived that the purpose of a corporation is to maximize shareholder value. To make sure the captains of industry got the message, boards of directors would change their compensation packages to cause these business leaders to focus on increasing the company’s stock price. What could possibly go wrong?

Everything!

The concept was embraced by both America’s business schools as well as industry. Unfortunately, the new policy not only didn’t solve the problem it was supposed to address but by unintended consequences created a myriad of new problems no one foresaw.

Tell me if any of these “unintended consequences” sound familiar to you: short-term decision making, relentless cost cutting, staff reductions (RIFs), less investment in the business, virtually no innovation, low workforce morale, no raises in pay, reduced benefits, non-stop mergers, increased debt, lost ability to compete, declining R.O.I., and economic stagnation. I’m sure you can add to this list based on your own experiences. For a more detailed look at this, you should read Steve Denning’s “Why ‘The System’ Is Rigged And The U.S. Electorate Is Angry,” the inspiration behind today’s blog post.

So twenty years ago, in 1996, President Bill Clinton signed into law the Telcom Act of 1996. This would bring “the dumbest idea in the world” to the radio industry. Wall Street jumped into the new shiny investment opportunity; radio. Everything that every other industry was experiencing from this new operational style was now rearing its ugly head in the broadcasting industry. All with the same negative impacts.

Not all organizations adopted this dumb idea of operating. They stuck with Drucker’s rule. And it’s the same with the radio industry. The smaller radio operations do operate differently. Their success has others sitting up and taking notice.

However, most organizations – and not just in broadcasting – are still in denial. The evaporating middle class is not good for an industry that lives off of advertising. Advertising is pitched to the masses who are the consumers that drive over seventy percent of the American economy. I wrote about the future of ad supported media last year after I read Thomas Piketty’s book “Capital in the 21st Century.” You can read that blog post here.

Based on the tumultuous presidential election season we’ve seen so far, it would appear that the American society has awakened and is now “as mad as hell and not going to take it anymore.” Cue Howard Beal here.

Steve Denning writes: “We are now at an ‘emperor has no clothes’ moment.” It’s now clear that this way is not working and is not only leading to systemic value destruction but an economy that no longer works for the middle class.

If we’ve ever needed real leadership in America, it’s now — and from all directions.

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Evolve or Lose Relevance

23In two months, the world’s largest radio meeting will once again be taking place in Las Vegas; the 2016 NAB Show. Ironically, since leaving the radio industry and entering academia at Western Kentucky University, I attended my very first NAB show in 2011 and have every year since. So as visions of massive crowds and very sore feet dance in my head, I thought I’d look back over those past years and see how the theme of these meetings has evolved.

In 2011, the NAB highlighted that media consumption had become more digital and connected. TV everywhere strategies, mobile TV, the connected TV and the use of social media dominated the show.

In 2012, everyone was shouting about 4K video, ISP content delivery and the evolution of special effects technology. Everywhere you went you were shown 3DTV (I didn’t care for it, personally.)

In 2013, the NAB show hosted its first ever 2nd screen Sunday and the impact of more than one screen (the television set) vying for the viewer’s attention was fully recognized if not totally embraced by broadcasters.

In 2014, the NAB show wasn’t so much memorable for what it had but for what it didn’t have 3DTV. What had once been prolific throughout all the convention halls was now nowhere to be seen. 4K video & TV was now all the rage with Japan’s NHK demonstrating 8K video & TV. NHK said they will be recording the Rio Olympics in 8K and plans to televise (in Japan only) the 2020 Olympics in 8K. When you see TV pictures this detailed, you can instantly see why 3DTV bit the dust. 4K and 8K feels three dimensional and you don’t need any funky glasses.

Which brings me up to last year’s NAB show in 2015 where the theme was “Evolve or Lose Relevance” voiced by NAB President/CEO Gordon Smith. Smith urged broadcasters to embrace the new technologies like ASTC 3.0 & 4K for TV, and NextRadio’s mobile app for FM radio on mobile devices. Smith also talked about the spectrum auction which begins in March 2016 and characterized the auction as both “exciting and daunting.”

What may have been most daunting and certainly not exciting was to have been an AM broadcaster at this meeting – or any of the meetings of the last five years. Move along guys and gals, there’s nothing for you to see here. HDRadio was there every year and I think they had more cars outside of their convention hall than any previous year featuring their spiffy HDRadios, a technology that has been better embraced by the automakers than radio broadcasters for the most part. And of course, there were drones. Lots & lots & lots & lots of drones. Big drones, little drones…a drone for every size and budget. I’m wondering if the FAA will start coming to these meetings along with their friends from the FCC.

The only thing I haven’t seen addressed over these past five years is what seems to me to be the elephant in the room. Everything is supported on a business model that has been around since commercial broadcasting began in 1920, that being the selling of advertising. The covenant with the consumer of radio/TV programs was we will give you the programming for free if you allow us to expose you to our advertisers; a business model that worked extremely well through the birth of the Internet and dial-up connections. It would be the introduction of broadband and its rapid expansion that would challenge everything.

Blockbuster vs. Netflix is a good example. 2004 Blockbuster has 9,000 stores and almost $6 billion in revenue and only 4.4% of American homes had broadband. Netflix was mailing DVDs to its customers. 2010 Blockbuster files for bankruptcy, 68% of American homes have broadband and Netflix had been streaming to their customers for three years. Today Netflix has a market cap of almost $33 billion.

That really brings home the concept of “evolve or lose relevance” doesn’t it?

So what will the business model for media be evolving to? That’s the billion dollar question. Nobody knows. But what we do know is that Apple gave up its free iTunes music streaming at the end of January 2016 and now will only offer a paid subscription model. Disney’s ESPN is suffering the “agony of defeat” as more consumers cut their cable bundle (for which it’s reported that ESPN gets $7 per sub) and is causing this revenue stream to dry up while the cost of bidding for live sports events continues to escalate. Everything appears to be moving in a direction of asking the consumer to pay for what they want – like they do for HBO, Showtime, and Netflix etc.

So what’s the plan Stan for broadcast radio and TV? Or for any advertising supported medium for that matter? I think about this a lot.

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Day of Reckoning

20There’s an old saying “Nothing lasts forever.” Do you remember flying on TWA or Pam Am? How about shopping at Woolworths? Broadcasters will remember names like Group W Westinghouse Broadcasting, or Taft Broadcasting, or Nationwide, or RKO General that would put the successful Bill Drake Top 40 format (with the non-stop innovations & promotions of 93-KHJ’s Ron Jacobs) in major cities across North America. They’re all now a memory.

In a time of limited radio signals, radio could control its inventory and increase stakeholder ROI by raising rates as it increased the size of its audience. That’s now a memory.

Next came the Local Marketing Agreement (LMA) to soak up all those Docket 80-90 FM signals that were squeezed into the FM band but found themselves economically challenged. More signals meant a new way to make more money. That’s now a memory.

LMAs were “training pants” for the Telcom Act of 1996 that would unleash a consolidation of radio and television ownership like the world had never seen. Companies would rush to acquire as many radio signals as they could as fast as they could. And do what with them? They would figure that out later was the common response. Owning more stations was a way to make more money, until it wasn’t. That’s now a memory.

You might have thought that would have sent a message that there are limits. It didn’t.

Today the game is translators. And the number of radio signals continues to grow, all seeking funding through advertising, just like every other form of media out there today.

So is the ad pie growing? Not according to Adam Levy at Motley Fool who saw advertising drop nearly 4 percent in the second quarter of 2015.

When the advertising pie isn’t getting bigger, two things usually happen: 1) budgets get cut and people lose their jobs and 2) more spots are added to the hour. Unfortunately, all through consolidation and the Great Recession radio companies have been doing both. They are like the Federal Reserve wondering what you do when you already have cut the interest rate to zero to stimulate the economy. Not a fun place to be.

Suggested Solutions

 Not to be all doom and gloom on you, I think there are some things that can be done to turn things around. The first thing is to focus on something and own it. Steve Jobs would put it this way “Just get rid of the crappy stuff and focus on the good stuff.” The way Jobs took Apple from near extinction to the world’s most valuable company was by his relentless focus on creating a small number of simple and elegant products.

Seth Godin calls it finding and serving your tribe. Radio needs to give up the quest to be all things to all people and learn to be something some people can’t live without.

Some stations can be the national brand in town, but everyone can’t. Likewise if people can get what you do someplace else, then why do they need you? This is the secret of “less is more.”

Radio stations need to have the agility to make decisions on the front line. Top down management is out, front line management is in. Mary Berner, the new CEO of Cumulus gets it. She has been reported in the trades saying “Cumulus will rely less on top-down management and more on letting managers do the job they were hired for.”  She also understands that while IoT (Internet of Things) is the future, it’s not the place Cumulus needs to focus on today. It’s about changing the culture and the way the company operates first. Getting the programming right and improving sales of those radio programs next.

I remember when I starting working for Clear Channel and hired to turn things around in my market, the company had a big push on selling the web and developing that component. I told my sales manager after the conference call ended that was not going to be the case for us. First we needed to get the programming and radio sales on fire and then – and only then – would we begin tackling our web based program. It worked too.

The hardest thing sometimes is not doing things, but figuring out what to stop doing. Jobs was good at this at Apple. You need to invest some serious thought about what you need to stop doing in your radio property. Again, less IS more if done right.

And the last suggestion I have is directed at colleges and universities. We need to be focused on the business model of radio and putting more of a focus on the business side of radio and radio sales. Radio owners and operators I talk with aren’t clamoring for more DJs or news people like they are for more sales people and innovators that will create the next revenue stream for their property.

In the end, your audience size won’t matter if you don’t have a business model to monetize it.

 

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Looking Back at My 1st Year of Blogging

635867993253266683346579856_blog4Hard to believe I started this blog one year ago. It seems like only yesterday. Ironically, it was Sunday, January 3rd – the same date as today’s date.

Those early days were pretty lean when it came to readership, only a couple of folks to a couple of dozen in those first cold and blustery winter months of 2015. Most blogs – like most diet/exercise programs begun with a new year – last about four months. This blog is celebrating its 1st birthday and its readership has grown dramatically. Thank YOU for being a reader.

 Here were my top 3 most read blog posts of 2015:

We Never Called It Content

Larry Lujack, The Real Don Steele, Robert W. Morgan, Dale Dorman, Ron Lundy, Salty Brine, Bob Steele, and so many, many more. These names I’ve dropped are all no longer on the radio. Terrestrial radio anyway. We radio geeks like to think they are now Rockin’ N Rollin’ the hinges off the pearly gates. https://dicktaylorblog.com/2015/09/06/we-never-called-it-content/

Top 3 In-Demand Radio Jobs

What is the future for jobs in radio in our digitally connected world? Three jobs in particular stand out as being in demand right now and look to be still in demand as radio celebrates its 100th Anniversary in the year 2020. The first won’t surprise anyone, the second is a job that only recently became critical and the third is a job that’s been a part of radio since day one. https://dicktaylorblog.com/2015/02/22/top-3-in-demand-radio-jobs/

Why I Fired My Top Salesperson

My students are always stunned when I tell them about the time I fired my top salesperson. “Why would you do that?” they always ask. Today, I’m going to share that story with you.

In today’s competitive world, top performers are usually cut a little slack. There’s nothing really wrong with that, unless it breaks a culture of honesty, fairness and trust.   https://dicktaylorblog.com/2015/11/01/why-i-fired-my-top-salesperson/

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I learned that my readers, while coming from all over the world, are mainly located in the United States, Canada and United Kingdom. My readership has grown to near 18,000.

Some of the posts I consider to be some of my most insightful you might have missed, the links are posted below:

https://dicktaylorblog.com/2015/03/15/the-future-of-ad-supported-media/

https://dicktaylorblog.com/2015/09/13/is-radio-ready-for-a-black-swan/

https://dicktaylorblog.com/2015/10/25/the-limitations-of-a-spreadsheet/

https://dicktaylorblog.com/2015/04/05/attention-to-detail/

https://dicktaylorblog.com/2015/10/18/how-do-you-measure-employee-performance/

Posts from this blog have been re-published in Tom Taylor’s NOW – Radio’s Daily Management Newsletter, radioINSIGHT, North American Radio Network, Radio Ink, James Cridland’s newsletter, and RAIN among many others (I know I’m leaving some wonderful publications and people out, my apologies in advance). Thank You for sharing my thoughts.

I’ve been invited to appear on Vlogs and podcasts by Owen Murphy, Ryan Wrecker and Larry Gifford as a direct result of my blog. Thank You too.

Next week I will begin a new year of blogging my thoughts about radio, education and the changes each is working through during the communications revolution caused by the Internet of things (IoT).

I hope you will continue to enjoy reading my posts and learning something from what I share. You’re always invited to share your thoughts in the comments section. I learned at the Wharton School that while no one can predict the future, it is amazing when minds come together and share their perspective of what the future holds, how close to what will happen can be revealed.

Let’s grow together in media mentorship.

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Next week, I will take a look at the plight of the small to mid-size Internet streaming broadcasters’ dilemma in light of the Copyright Royal Board’s rates for 2016-2020 and why what’s happening is not new. It’s déjà vu.

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Radio – America’s #1 Mass Reach Medium

radio-reaches-245-million-americans-2015-2This was certainly true in the first golden age of radio, that period of time from its birth in 1920 through the mass takeover of television in the 1950s. Once TV came along, radio had to reinvent itself.

 

That reinvention came in the form of Rock ‘N’ Roll, the transistor radio and the car radio. Radio was portable, TV was not. TV took over the living room, but radio took over every other place.

 

In my life, I’ve lived through every new form of technology that was going to be the death of radio. The 8-track tape, the cassette tape, the CB radio, the CD player, the CD changer, the cell phone, the MP3 player, and most recently, the World Wide Web, Internet streaming and wireless broadband.

 

So you might be surprised to learn that at the 2015 annual meeting of the Association of National Advertisers Masters of Marketing Conference in Orlando, Florida attendees learned that when it comes to adults 18+, RADIO reaches 93% of them every week. That’s more than TV, more than smart phones, more than PCs and more than tablets.

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I remember when I got my first GM position. It was a daytime radio station that featured Al Ham’s “Music of YOUR Life” format, big band music for those not familiar with the programming. Yes, my audience was old. But only according to the calendar, but not the way they thought about themselves. Nampa and his corvette

It was always a tough putt with new advertisers, getting across this concept that you are as young as you think. So I wasn’t surprised to learn that one of the sessions talked about “APT.” APT was all about the “Age People Think” not demographics.

 

I’m not sure that lumping people by demographics was ever a sound marketing idea, but like a lot of bad ideas (buying radio on a Cost Per Point basis) in advertising, people do what’s always been done and ignore if it’s a sound way to place advertising.

 

A lot of my radio stations over my career have focused on an older demo. When Ken Dychtwald’s book “Age Wave” came out in 1990, I read it with enthusiasm. Dychtwald told of the massive population and cultural shifts that would be taking place because of the Baby Boom Generation. He put forward how the boomers would shift the epicenter of consumer activity from a focus on youth to the needs, challenges, and aspirations of maturing consumers. Those predictions are playing out today.

 

So again, I wasn’t surprised to read that at the ANA gathering attendees were told that old people were a growth market. In light of the trillion dollars in student loan debt, the millennials are cash challenged in a way that the Boomers are not.

 

I grew up in a Chevy family. Remember those days of yore? Chevy families and Ford families competing for bragging rights as to which drove the better cars?

 

Many marketers would have you believe that we are now stuck in a rut with our product choices and only the young are pliable enough to be swayed to try or change brands. So let’s see how that plays out in my family. I have two older brothers; one drives a Honda and the other a Toyota. How about our kids? Well we have a BMW, Mercedes Benz, Hyundai and Honda. In my case, I drove a Hyundai for the past eight years before switching to a Honda Accord; so much for that concept that once you are stuck in a brand, you stay there for life. Even my toothpaste is not the brand I grew up using.

 

Everything has changed about the world with the exception the way marketing is created and advertising is bought.

 

One of the big changes is that RADIO is back! It’s the massive reach medium that advertisers seek to expose their products and services on, except that they don’t know it.

 

Radio needs to use some frequency and repetition to get the word out.

 

Willie Sutton said he robbed banks because that’s where the money was.

 

If you’re an advertiser, you need to advertise where the people are and that’s today’s RADIO.

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Why I Fired My Top Salesperson

My students are always stunned when I tell them about the time I fired my top salesperson. “Why would you do that?” they always ask. Today, I’m going to share that story with you.

In today’s competitive world, top performers are usually cut a little slack. There’s nothing really wrong with that, unless it breaks a culture of honesty, fairness and trust.

If you’re in any kind of sales, you know that one of the ways management motivates and stimulates sales people are through the use of contests. Sales people are competitive folks and the best like to win. I know I do. In fact, I have a picture that has hung the wall of every office I’ve ever occupied. It says “If you ain’t the lead dog, the scenery never changes.” Lead Dog

Well this latest sales contest was coming down to the wire and the sales people were running neck and neck. It was having every employee in the whole radio station wondering which one of the sales people would capture the top prize and finish first.

On the final day of the contest, just before the 5 o’clock bell rang signifying the end of the contest, my top sales person came running into my office with a contract that put him in first place. We all congratulated him on his win and went home to enjoy the weekend.

On Monday morning, my traffic and business department people came to me with that signed contract along with other signed contracts from that same client and it was quite apparent something was fishy. The signature turned in just before the bell on Friday was quite different than all the others.

I called my top sales person into my office along with my sales manager and we asked this person if the client had actually signed this contract. After some hemming and hawing, he said “NO.” He explained that the client was on a cruise and wouldn’t be back in the office until today and he was planning to go over there and get his approval for the advertising. He said that he knew the client would definitely agree to the advertising. I knew he would too. And that’s why it was so sad when I told him he was fired.

Enforcing a culture of honesty, fairness and trust is hard.

The only way you can maintain that culture is by understanding that you have to fire people no matter what their performance has been. You can’t build a great organization unless you commit to doing just that.

Unlike many other radio stations in my market, I had a waiting line of top sales people wanting to join my team. A great culture helps you attract the most talented people.

A half-dozen years later I was recruited back into this same market from the Midwest and had the task of launching a brand new radio format. I needed to hire people for every position.

The good news is that because of my reputation for honesty, fairness and trust, I attracted many in-market pros when I hung out the “Help Wanted” sign.

One of the people who came to see me and apply for a position on my new sales team was the top salesperson I had fired years ago. He was employed in sales at another radio station in the metro and was doing quite well. Most of the accounts he had on-the-air at his current station had already been assigned to sales people I had already hired. He didn’t care. He wanted to come back and work with me. We reviewed the past that led up to his termination and he swore he had learned his lesson and that it would never happen again. I believed him. It never did.

In his first 30-days, he sold over $100,000.00 in advertising. Most of it paid cash-in-advance. He once again was my top salesperson. I believe in second chances. I also believe in committing to the type of culture that wins with honesty, fairness and trust.

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Digital Feudalism

I follow Jeremiah Owyang on Twitter. He’s been observing, writing and talking about the new collaborative or sharing economy for some time now. He says it’s the future and where all business is headed.

You might have heard of Uber (the taxi company that owns no cars) or Airbnb (the lodging company that owns no rooms) etc. and how they are growing by leaps and bounds. The venture capital is flowing into these new business models leveraging this collaborative concept.

So you can imagine my surprise to read this headline: “Jeremiah Owyang just dropped a bomb in Paris.” (Not literally, but figuratively) The “bomb” being the reality that “the driving force behind this disruptive movement isn’t peer relationships with customers,” but “the one percent own the collaborative economy.”

Why was this a stunning announcement? Because the concept of this new value proposition called the Collaborative Economy “is organic, peer-to-peer digital interaction to create opportunities that bypass outmoded processes of brick and mortar businesses.”

Much like I wrote about in my blog post “The Future of Ad Supported Media.

Owyang was revealing the dark side of this new economy. The rich were getting richer and the poor, poorer. While some tried to dress this new sharing economy in the clothes of Ronald Reagan’s “Trickle-Down” economics, the reality is clear; that’s not what’s really happening. The world’s wealth-gap continues to expand and it’s picking up speed.

For media companies, this new economy is seen as sharing of thoughts, ideas, information and creation via the Internet. The result has seen the number of dominant media companies go from somewhere around fifty back in the 1980s to about five around the turn of the century.

The old ways of doing business – printing newspapers & magazines or broadcasting over radio & television – are dying.   The “smart money” is moving into digital marketing and advertising. The party’s over, turn off the lights, it’s time to go home – OR IS IT?

Have you heard about ad blocking?

It turns out this a big deal and growing exponentially. The advertising industry has simply looked the other way as though it didn’t exist, but it does.

While only about 15% or so of the US folks are using an ad blocking extension, other countries around the world are approaching 40%. Gaming sites are reported to be even worse with over 80% of their ads being blocked by gamers. Frederic Filloux goes into a lot more detail in his blog post titled “Ad Blocks’ Doomsday Scenarios.

This could be a real opportunity for radio especially. But it needs to look in the mirror, put its big boy pants on and do what it knows it should have been doing all along.

Barry Drake spells it out better than I ever could in his book “40 Years 40,000 Sales Calls” (which I highly recommend you pick up and read). Barry writes the following prescription for radio’s future:

“…there must be investment, the fuel necessary to attack the four major issues.

In Programming:

  • Fresh content to attract a new generation of listeners, 95 million millennials

  • Promotion and advertising to achieve prominence

In Sales:

  • Severe reduction and limits to inventory  (Not a gimmick, smart business)

  • Contact with the BOSS (calling on decision makers by local sellers)

The very entity that caused so much grief is going to eat its own tail.

This is radio’s next big opportunity to reinvent itself and reassert itself as the powerful medium that it always was.

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