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Why Radio Is Not Embraced By Advertisers
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(12/17/2012 4:28:45 PM) Flag as inappropriate content
I don’t understand how gravity works – but it does - doesn’t it?
It sounds like as an industry – we need to do a better job of educating buyers on how radio works. If there are better tools for R.O.I. measurement –(that the other guys are “laser-focused” on) --- by all means share! That discovery might finally allow us as an industry to charge what our product is really worth! The best advertising medium to influence buying decisions in America today is still – RADIO!
One of the sharpest retailers I ever had the good fortune to know – taught me plenty about “R.O.I.” (he was a retailing genius). Ken - tracked everything – before he started any advertising campaign he already knew exactly how many people were walking in to each of his stores, how many people made it to the cash register, his total sales, the average ticket, the weather, holiday impact and day of the week. He kept track of everything – (and this was before computers) so that when he added advertising (which always promoted “bona-fide offers-with deadlines” not just “image ads”) his goal was to improve those numbers. He tracked the impact it had – he watched his store traffic counts, and most importantly he compared his sales against previous months, quarters and years – he knew exactly what worked and what didn’t!
Radio Still Works –and in three easy steps- Step 1: Develop a Strategy Step 2: Create a Strategy Focused Message and … Step 3: Run it with adequate Consistency and Frequency – so you cut through the clutter! The good news is – Radio is still the most cost efficient medium when it comes to delivering buyers through consistency and frequency! If you have 15 minutes …just ask -Geico, or Home Depot, Wal-Mart, AT&T, McDonald’s and thousands of other national and local brands who have spent billions on Radio. What secrets do these advertisers know that your panelists don’t?
Education is the answer!
As to your question - “So why is radio not getting its fair share of ad dollars nationwide?”– That has to do with competition … remember - supply and demand? – There are some 14,728 radio stations, 1,774 television stations and roughly 1,400 daily newspapers. We drive our rates lower because agencies pit us against one another – and don’t value our brand – “RADIO”!
~RADIO WORKS … JUST LIKE … “WORD OF MOUTH” – ONLY FASTER!~
Sincerely,
Bob DeFelice
Sunrise Broadcasting
Gosh willikers, Brian. I thought I was alone out here. Indeed, the potential for this medium is even greater than anything any of us - including the old-timers - have even dreamed.
But, as sold research demonstrates - it's hard to follow a dream with one's head up one's ass... or somebody else's.
"...radio is no longer on the radar of many advertisers -- it's not even part of the discussion." That says it all. When advertisers were aware of radio -- when it was an ingrained part of their lives -- they had no trouble investing. We've all known for decades that advertisers tend to spend on the entertainment they themselves engage in. Radio is no longer engaging them. Why? Bottom line -- this is not a sales problem. It is a product problem.
Mr. Dardis ends his comment with the statement: "Advertisers are buying response. Branding campaigns aside, it's that simple."
Branding campaigns aren't subject to the same gumball machine metrics as commodity transaction ads. But, as Ken's inclusion of them implies, they have (immeasurable) value. Motel 6, Coca Cola, McDonald's, etc. know this.
So do the most successful local advertisers in your market.
Mr. Skotdal's proposal is worth considering. He suggests "...we reconsider...whether 25% agency commissions can gain us another $5 billion in advertising." They're providing the creative which (at least in theory) is worth something. Stop throwing in "value added" at their whim, charge a fair rate across the board, and pay them 25%. This would require a discipline sadly lacking in some quarters, but has potential. Definitely worth a discussion.
While I have an appreciation for Ken's position (and who is going to argue?), it can still be said that radio is never going to sell a car - unless it's a 40k vehicle "on sale for 20 minutes only at the low, low price of just $1995.00."
Radio (when it is used appropriately) can be a powerful motivator, generate emotional responses and unconscious recall and can drive traffic - either to a location or a website.
Radio has a two-fold challenge - the one Eric describes and Ken articulates so well and the one where we have failed to take advantage of the innate properties of our own medium by generating programming and creative that works for an audience and an advertiser.
The latter we can address immediately and for relatively little cost to the stations. The former....? Hoo-Boy!!
I am surprised there is a moment in time where I agree with Charlie Ferguson, but there is a significant point to be made about how agencies make margins. An agency can make a big margin on producing video. An agency can make a big margin on developing beautiful ads with photo shoots. When it comes to using the most efficient medium in the history of advertising, there's no value proposition in it for the agency. Maybe we simply need to reconsider whether 15% agency commissions are the way to go, or whether 25% agency commissions can gain us another $5 billion in advertising. Radio works. We know it. They know it. We should be using our own air on a far more regular basis to promote our advertiser success stories because at some point in their week, all of those buyers use radio.
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(12/17/2012 4:28:45 PM) Flag as inappropriate content
I don’t understand how gravity works – but it does - doesn’t it?
It sounds like as an industry – we need to do a better job of educating buyers on how radio works. If there are better tools for R.O.I. measurement –(that the other guys are “laser-focused” on) --- by all means share! That discovery might finally allow us as an industry to charge what our product is really worth! The best advertising medium to influence buying decisions in America today is still – RADIO!
One of the sharpest retailers I ever had the good fortune to know – taught me plenty about “R.O.I.” (he was a retailing genius). Ken - tracked everything – before he started any advertising campaign he already knew exactly how many people were walking in to each of his stores, how many people made it to the cash register, his total sales, the average ticket, the weather, holiday impact and day of the week. He kept track of everything – (and this was before computers) so that when he added advertising (which always promoted “bona-fide offers-with deadlines” not just “image ads”) his goal was to improve those numbers. He tracked the impact it had – he watched his store traffic counts, and most importantly he compared his sales against previous months, quarters and years – he knew exactly what worked and what didn’t!
Radio Still Works –and in three easy steps- Step 1: Develop a Strategy Step 2: Create a Strategy Focused Message and … Step 3: Run it with adequate Consistency and Frequency – so you cut through the clutter! The good news is – Radio is still the most cost efficient medium when it comes to delivering buyers through consistency and frequency! If you have 15 minutes …just ask -Geico, or Home Depot, Wal-Mart, AT&T, McDonald’s and thousands of other national and local brands who have spent billions on Radio. What secrets do these advertisers know that your panelists don’t?
Education is the answer!
As to your question - “So why is radio not getting its fair share of ad dollars nationwide?”– That has to do with competition … remember - supply and demand? – There are some 14,728 radio stations, 1,774 television stations and roughly 1,400 daily newspapers. We drive our rates lower because agencies pit us against one another – and don’t value our brand – “RADIO”!
~RADIO WORKS … JUST LIKE … “WORD OF MOUTH” – ONLY FASTER!~
Sincerely,
Bob DeFelice
Sunrise Broadcasting
- Bob DeFelice
(12/13/2012 6:44:28 AM) Flag as inappropriate contentGosh willikers, Brian. I thought I was alone out here. Indeed, the potential for this medium is even greater than anything any of us - including the old-timers - have even dreamed.
But, as sold research demonstrates - it's hard to follow a dream with one's head up one's ass... or somebody else's.
- Ronald T. Robinson
(12/12/2012 4:01:14 AM) Flag as inappropriate content"...radio is no longer on the radar of many advertisers -- it's not even part of the discussion." That says it all. When advertisers were aware of radio -- when it was an ingrained part of their lives -- they had no trouble investing. We've all known for decades that advertisers tend to spend on the entertainment they themselves engage in. Radio is no longer engaging them. Why? Bottom line -- this is not a sales problem. It is a product problem.
- Brian Jackson
(12/11/2012 8:36:34 PM) Flag as inappropriate contentMr. Dardis ends his comment with the statement: "Advertisers are buying response. Branding campaigns aside, it's that simple."
Branding campaigns aren't subject to the same gumball machine metrics as commodity transaction ads. But, as Ken's inclusion of them implies, they have (immeasurable) value. Motel 6, Coca Cola, McDonald's, etc. know this.
So do the most successful local advertisers in your market.
- Rod Schwartz - Radio Sales Cafe
(12/11/2012 8:29:51 PM) Flag as inappropriate contentMr. Skotdal's proposal is worth considering. He suggests "...we reconsider...whether 25% agency commissions can gain us another $5 billion in advertising." They're providing the creative which (at least in theory) is worth something. Stop throwing in "value added" at their whim, charge a fair rate across the board, and pay them 25%. This would require a discipline sadly lacking in some quarters, but has potential. Definitely worth a discussion.
- Rod Schwartz - Radio Sales Cafe
(12/11/2012 2:56:40 PM) Flag as inappropriate contentWhile I have an appreciation for Ken's position (and who is going to argue?), it can still be said that radio is never going to sell a car - unless it's a 40k vehicle "on sale for 20 minutes only at the low, low price of just $1995.00."
Radio (when it is used appropriately) can be a powerful motivator, generate emotional responses and unconscious recall and can drive traffic - either to a location or a website.
Radio has a two-fold challenge - the one Eric describes and Ken articulates so well and the one where we have failed to take advantage of the innate properties of our own medium by generating programming and creative that works for an audience and an advertiser.
The latter we can address immediately and for relatively little cost to the stations. The former....? Hoo-Boy!!
- Ronald T. Robinson
(12/11/2012 2:52:09 PM) Flag as inappropriate contentI am surprised there is a moment in time where I agree with Charlie Ferguson, but there is a significant point to be made about how agencies make margins. An agency can make a big margin on producing video. An agency can make a big margin on developing beautiful ads with photo shoots. When it comes to using the most efficient medium in the history of advertising, there's no value proposition in it for the agency. Maybe we simply need to reconsider whether 15% agency commissions are the way to go, or whether 25% agency commissions can gain us another $5 billion in advertising. Radio works. We know it. They know it. We should be using our own air on a far more regular basis to promote our advertiser success stories because at some point in their week, all of those buyers use radio.
- Andrew Skotdal
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