How Radio Succeeds Selling Digital
James Derby is the Chief Strategy Officer at Federated Media and one of radio's standout digital experts. His job is to guide what Federated is doing in the digital space. When he arrived three years ago, his assignment was to get Federated to a place where it had digital platforms integrated with its radio product. Then, to put a sales component in place. Derby, who will be a panelist at Convergence next month, has, in three short years, created a very successful digital arm for the company. Today he talks about how Federated moved from not having a digital strategy at all, to having one that generates new dollars. And, he gives a great example of what Federated is doing to help clients succeed with digital, therefore bringing in that fresh new revenue for the company.
RI: When you first arrived, what was the Federated strategy?
Derby: We were like a lot of traditional radio groups that had some websites that no one wanted to look at, other than entering a contest or maybe to stream the station. But, even our stream at that time was just a regular stream, like a lot of radio stations, without a lot of effort being put into it. It was a repurposed broadcast of the terrestrial signal. We didn't promote it.
When we got started, the job was about building Federated to the point where it had an integrated digital platform. That involved revamping websites and the creation of social media accounts -- Twitter and Facebook-- for jocks and the stations. It included streaming and ad insertion. We didn't have apps. Now, we are on our second generation of apps. We tried to think of what would make apps kind of cool. We found mobile app gamers that do it for a living. They helped us build these mobile games and put purchase and share features, and pictures and video on the apps. That's what the job started off with. The job certainly remains that today, as we continue on the sales side of that business.
RI: Is this just you doing all of this?
Derby: Fed Interactive is a separate company that was created by ownership to let the rest of the folks in our radio group know that digital is going to be a part of our future. By having a separate house and a separate building, which started off as me and one Web developer and is now 8 or 9 people, three years later. Now we are starting to wander into other areas. We started our own social media management company that has its own sellers and programmers. And we started a consulting business recently and took on our first radio client. The purpose of the consulting business is to really help them with digital integration.
RI: So where is radio in terms of digital?
Derby: Unfortunately, I really think the majority of the radio groups are just not involved in digital. They are scared of it. They know the landscape is changing but the business is a tough business. The last three or four years, with the economy, people are just buckling down, concentrating on what they have done best, which is radio, selling spots, coming up with creative ideas for clients, and executing great promotions. But the dynamics have changed. The radio pie isn't growing. It's shrinking. I think unfortunately our industry, which has always been fairly slow to move, is moving at an excruciatingly slow process when it comes to digital. You have radio stations that either don't have active social media accounts, or don't have an active mobile presence. The fact that we have radio groups out there that don't do these things, don't dedicate resources to their people and sales, is unfortunate and frightening. If we're going to survive and prosper as an industry, we need people to be actively doing these things. I don't know how you would not have both of these things going on, at a minimum, both digital and radio. I don't think that there are a lot of groups committed to doing this, either because financially it looks like too big of a risk, they can't afford to do it, they don't understand it, they're scared of it, or they don't think it's the business they're in. They are radio guys and they don't do digital. But the consumers are there. And clients are absolutely in that space. The idea that you wouldn't be where your consumers and your clients are is crazy.
RI: Can you give our readers an example of something you put together that really worked for a client?
Derby: This one comes to mind simply because we were recognized for it recently. There's a big grocer out here called Martin's Supermarket. They have about 19 stores in the northern Indiana area. We did something with mobile that involved radio, but you'd be surprised by the amount of radio really involved in this idea. From scratch, we created the Martin's Grocery Membership Club. They didn't have a membership club, so it's not like we transferred club members over. The promotion resulted in about 18,000 brand new members. A text would go out once per week to everyone that signed up for the text club. There was an incentive involved to get customers into the store. The consumer entered and would get a bounce back saying "Congratulations. You are now part of the Martin's Club. We will be sending you a weekly offer." Something along those lines. It was an easy process for consumers because they could find it on the radio by hearing the promotion or they could go to the station website and grab it there. The reason this worked was the client was smart with his incentive. He knew it couldn't just be 2 percent off of something. It had to be a real incentive. Once shoppers were in the grocery store, the client knew people were going to see the milk or the diapers and pick them up too. We all looked at it as extremely successful because it was carried out on multiple platforms. It was texting so it was mobile, there were banners on the websites and live 10-second radio liners. It was digital dollars for us. We took something that did not exist and helped grow the client's club membership to somewhere around 18 thousand people. It was a significant buy for us.
At Convergence 2013, Derby will be part of a panel called Traditional Media In the Age of Digital: How TV and Print Are Facing the Challenge and What Radio Can Learn From Their Mistakes – and Their Wins, moderated by Ruth Presslaff, President, Presslaff Interactive Revenue. See the full Convergence agenda HERE and register HERE
Reach out to James directly at jderby@FederatedMedia.com
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