Tag Archives: digital advertising

It’s Like Mowing the Yard When the House is On Fire

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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.

Going Deeper

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.”

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Filed under Education, Mentor, Radio, Sales

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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Filed under Education, Mentor, Radio, Sales, Uncategorized