Sadly, it’s that time of the year when radio station budgets are being finalized and staffs are being cut before the start of a new year.
Hubbard Radio’s Chicago VP/GM Jeff England recently told the trades, “As technology evolves, we have to look for ways to use it to our advantage. The difficult decision to reduce staff is an effort to remain competitive in a very challenging environment.”
The large radio companies are faced with the same challenges that America’s large car companies are faced with, a rapidly changing marketplace.
GM’s CEO, Mary Bara, announced that General Motors would be shuttering seven plants around the globe to focus on increasing production of new electric vehicles. More than 14,000 GM workers will be out of a job as the company laid them off without any warning.
An outraged GM worker told the press, “You’re going right into Christmas. You’re looking for a celebration and that’s not there now.”
Sadly, I’ve known lots of radio people who can identify with how the workers at closing GM plants feel. I am one of them, as Clear Channel showed me the door without warning, just before Christmas 2009.
What makes these plant closings so impactful to their communities is not just the GM workers out-of-work, but the additional downsizing in the support businesses in those communities and elsewhere. As many as seven more people, for every GM worker, could see their jobs eliminated at businesses such as food services, retailers, healthcare, etc. All the businesses that broadcasting depends on for advertising.
Focused on the Future
Mary Bara, in a statement, said of GM’s decision to close some of its plants, “The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future. We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
Is this any different than what any other industry, including broadcasting, needs to be doing?
Top Tech Trends for 2019
I just sat in on a Juniper Research webinar about the “Top 10 Tech Trends for 2019” and it was mind numbing in many ways.
I try to stay up on the latest trends, but I must admit I needed a second browser window open during their presentation to understand what the heck they were talking about. They were using terms like chatbots, loot boxes, RPAs, RCSs, etc.; like these were common everyday terms.
Here’s what I learned about tech’s future as it may impact radio and broadcasting:
- Digital, blockchain, robots, voice assistants, 5G wireless and artificial intelligence (AI) are where everything is headed.
Intel is working with China’s Alibaba (an internet service that connects buyers with sellers) to develop artificial intelligence to enhance EDGE computing power in the internet of things. China is a huge market for American companies. In the case of General Motors, they didn’t build car assembly plants in China to ship those vehicles to America, they built them to sell vehicles in China. In the first nine months of 2018, GM sold 2.7 million cars in China compared to 2.6 million cars in all of North America.
Amazon’s digital voice assistant, Alexa, will be deployed in more devices. Currently voice assistants are in 9% of the households worldwide according to Juniper Research. That percentage is even higher in developed markets and VA’s will become a service-led market going forward.
5G wireless will enable RCS (Rich Communication Services) that will compete with services like Facebook messaging and is expected to bring people back to messaging directly via their smartphones, due to a more vibrant, media-rich platform. RCS is the successor to SMS text messaging that we now use.
Digital Advertising in 2020
Salesforce Research in their latest insights into the new era of advertising and media buying report says that:
“Consumers and business buyers receive more messages, through more
channels, then ever before. Cutting through the noise requires advertisers
to deliver hyperpersonalized messages that resonate at the individual
level. Now, advertising is undergoing a transformation — the biggest
revolution since the launch of digital ads in the 1990s — driven by data.
To effectively reach audiences and interact with them in a smarter, 1-to-1
manner, advertisers must connect and make sense of a myriad of data
sources. Of course, achieving this requires a shift in dynamics; advertising
and marketing can’t live in vacuums. Technology can’t be an afterthought.
The winners in this new era will coalesce the right teams and technologies
to harness data, more precisely track their efforts, and measure progress
to evolve their strategies at the pace of the consumer.
Dominant channels — and thus budgets — are shifting, too. Increasingly,
advertisers will rely on major platforms under the Google and Facebook
umbrellas to deliver their messages. And success isn’t measured only by clicks and impressions, but also lifetime customer value.”
Salesforce says that advertising and marketing are converging, and that the same team now performs both functions and shares the same budget. Companies now are over the tipping point (57%-59%) internalizing their ad spend decisions for Facebook/Instagram and Google search. 94% of companies now use Customer Relationship Marketing (CRM) data to target their advertising. The main benefactors of this change are Facebook and Google, with an estimated 66% of digital ad spend going to just these two.
Click HERE to get your copy of the full report from Salesforce.
Strategy, Tactics and Radio’s WHY
I asked the question in the fall of this year, “What’s Radio’s Why?” I asked that question because it often appears that radio is employing lots of tactics without first having a grand plan; a strategy.
GM and Ford both see a future where SUVs, trucks and electric vehicles will be their primary focus. Ford plans to eliminate all but two of its car lines and GM announced that it would be terminating many of its car models too. Both of these car companies have a future strategy, and I would contest, have found their “why.”
In order to have a profitable strategy for radio, the industry must first answer what its WHY is, and that it fits into the needs, wants and desires of a 21st Century listening audience.