The Disconnect Between Radio and Advertisers
A consistent theme throughout the day from the advertising community at Forecast yesterday was that radio remains such a small player in their marketing plans because it lacks metrics and concrete evidence an advertiser is getting a return on its investment. For advertisers it's all about R.O.I. and radio has no way to prove it works. On the other hand, radio executives continue to say radio's 7% of the advertising pie it's not getting its message out. It's the same story many of them have been telling for well over a year. "If advertisers only knew our story." The question is, who's responsible for getting that message out and how much longer can the industry just keep saying, we need to get our message out.
Horizon Media CEO and Founder Bill Koenigsberg, who is a huge friend of radio, and spends a lot of money with radio, said real growth will come when we are able to prove our results. "Attribution is key. A major radio company, after we spent millions of dollars with them, wanted to do a presentation to the client after the campaign. There were no metrics and there was nothing about how the campaign helped the client's business." Koenigsberg said proving radio works is going to be the key. It was repeated by others in the advertising community, who admitted they love Television because it has sight, sound, motion, a sense of scale and metrics.
While radio industry executives have been consistent in saying how wonderful the radio story is, how nobody can do local better than radio and how much a companion radio is with a community, nobody has really taken the lead in coming up with an industry standard of metrics to prove radio works. The advertising CEO on our Forecast panel yesterday do not doubt radio's connection to the community. They still want proof an advertisers money is not being thrown away.
Brian Terkelsen is the CEO of MediaVest USA. He has a total advertising budget of $9.9 Billion. Radio gets only $100 million of that budget. "Is it ever going to be on the plan more? I'm not sure. What's the new about radio." Terkelsen said radio has to fail forward more. You hold in your power that connection point with consumers." Terkelsen said data and analytics are driving our business more and more. Content may not be king anymore.
Koenigsberg said radio needs to figure out how to have its prom. He used the example of the Television up-front season as an example of how that industry pushes its content out so everyone can see it. Radio doesn't have anything like that. "Radio needs to figure out how to have their prom and tell their story."