Sell Digital to Increase Revenue
By Sean Luce
I attended Convergence 13 in Santa Clara, California. It seems like yesterday I had my then-less-than one-year-old son, Henry in the very same auditorium 13 years ago. That was 1999. In radio, we were Prince and partying like it was 1999 -- and going into the new century, it was nothing but optimism for radio. And why not? Satellite radio, in my opinion, wasn't really going to buck the "free content" model of terrestrial radio -- same opinion I hold today. In an article penned in Radio Ink close to 11 years ago, "10 Years From Now," that technology was moving too fast for satellite to gain a true foothold with a non-advertiser-generated model. Enough on satellite radio.
One year later, I did an 18-city "tour" promoting my new business, and included was a session on selling the Internet. The Internet session, which was optional for attendees, was received with a lukewarm reception in 2000. It seems not much has changed in radio 12 years later. At Convergence 13, there was still some talk about how digital can "add value" to the radio revenue experience. The only way radio revenue will get back to the 2007/08 levels is with digital sales added. However, the model of adding digital to radio is old and lacking substantial growth curves.
The Ocean Versus The Lake
Often I'm asked, "How can a tiny company in Western B.C. bring that kind of revenue in a market that size?" See www.castanet.net. A couple things: first, digital revenue takes out, on average, 30 percent of the total advertising pie now. The greatest risk is where the nastiest sharks swim -- in the ocean not the lagoon where the 30 percent revenue is. Internet revenue is also growing at 15 percent a year. If I can do the math, certainly you can do the math. Compound your digital revenue by those figures and voila. Add it up. I answer the original question with, "Sell it like it's the only thing you sell and you'll be successful." In other words, separate your digital and radio. Sell digital like it's the only company you have and you'll figure out a way to sell it and make money. If you had to pay your mortgage with what you sold, you would figure it out wouldn't you? Radio swims in the 6 percent total advertising lake. That's nothing to scoff at. However, that lake is not increasing its size by 15 percent a year.
Where the Big Fish Were…At Convergence 13
Eric Rhoads doesn't need a suck up. No sucking up here, just the truth. Radio Ink puts out a Radio's Most Powerful Top 40 people issue each year. It's a stellar issue and they rate the Top 40. With all due respect to those much more powerful that I am, I think Radio Ink should just start out with Eric as No.1 and then just fill in the remaining 39. Seriously, who could have put together such powerbrokers of the Internet in their own home -- Silicon Valley (for some of them, they could just walk over to the convention center) -- and have them address radio people? Maybe that was it: It was an Internet conference and worth much more than what they were charging to attend. With the lineup Eric and Deborah Parenti had, it should be jammed with 5,000 of radio's best management, programming, and sales reps. Maybe it's a matter of just flipping the target audience and that might very well happen next year.
It was a great line-up. Here are just a few highlights that I liked:
-- Ken Rutkowski. This guy walks on water. Whatever he tells you to do for your radio station, or anything in social media for that matter, do it. He's the real deal.
-- Maybe one of the smarter guys I've seen in a while? Search engine guy Kris Jones. Not only does he look smart, he is smart. Anyone who has the guts to start out Tony Robbins-style gets my attention.
-- Kraig Kitchen and Brian Glicklich of Rush Limbaugh and Glenn Beck fame, just to mention two of the people they work with. What they did with Glenn Beck having his own TV network is pretty incredible. These two are at a different depth than most.
-- The last session was over the top! Sitting there were four of Silicon Valley's top 1st through 4th generation start-up revenue investing engines people. It blew me away. How did you get these guys into the same room and on the same panel? Most important thing said: They like to invest in the management team that's been together a while as well as the product they are financing. How smart! In my opinion, in digital, I think the team that put it together and sells it is just as valuable as the product. See Patch.com and the problems they are having. Patch is a flawed model. If you are going hyperlocal, then go hyperlocal, no substitutes. They also said something to the effect that it's not always advertiser-generated models that they seek to invest in. Hmmm….interesting. They said, in some cases, get the users and the revenue models will come.
-- Christine Merritt of Google's Channel Sales Team of North America. You better find out what they are doing! They might be in your market!
-- 200,000 Hispanics will turn 18 this month. Just think about that for a second.
I could go on and on, and of course I'm leaving out many people who went over the top at Convergence 13. It's just that I'm over the top of the number of words I can use in this blog.
Sean Luce is the Head National Instructor for the Luce Performance Group and can be reached at Sean@luceperformancegroup.com.
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