Charlie’s Angles: Charlie Rahilly’s Plan To Connect With Radio Listeners, Web Surfers, And Advertisers (08/20/07)
By Editor-In-Chief Joe Howard
He’s run some of Clear Channel Radio’s biggest radio stations, so Charlie Rahilly understands high stakes radio. And the stakes are pretty high these days, as he’s just assumed the leadership post at Premiere Radio Networks, one of the industry’s largest providers of network content.
Most recently executive vice president of operations for Clear Channel Radio, Rahilly was named the company’s president and COO in June, taking over from Premiere co-founder Kraig Kitchin. While all eyes are on Rahilly as he takes on this high-profile gig, he believes success is his — and the industry’s — for the taking.
“People haven’t stopped wanting to listen to things, and we’ve got a pretty good corner on the market of generating things to listen to,” he says in a fast-paced, excited tone that exposes the enthusiasm he feels about both the industry and his new job. “We have to be as imaginative as possible and put that content in as many different places as possible, allowing people to listen from as many possible sources as possible. Then we have to think about advertisers we can engage on the monetization side of each one.”
Rahilly notes, however, that ensuring the content is top notch is more important than ever. “Products actually have to be better to make the marketing work effectively,” he says. “In this world, if something is not remarkable, it just doesn’t move. We have to find what’s remarkable in everything we’re delivering.”
RADIOINK: Talk about shifting from overseeing station operations to network programming.
CHARLIE RAHILLY: [Former Premiere President/COO] Kraig Kitchin and I talked a lot about the opportunities that existed in network radio over the years, so I’ve had an informal training and apprenticeship through Kraig. I’ve worked with him in launching different programs; one was the transition from Rick Dees to Ryan Seacrest at KISS in Los Angeles. Many of Clear Channel's top talent are stars here; I have familiarity with their audiences from the station side. Premiere gets phenomenal numbers on the Clear Channel radio stations that I was responsible for. I am really aware of their ability to connect with audiences and sell our advertisers’ products.
RI: How is the overall health of network radio?
CR: For that, I’d refer you to Clear Channel’s last earnings release; Premiere is having one helluva year, and is adding to Clear Channel’s overall revenue results.
RI: What are the key avenues that network radio should be pursuing?
CR: I think the changing audio model between listeners and terrestrial radio stations is changing our ability to introduce new programs. There is a great connection between listeners, hosts, and content, whether it’s music, news, or information. I’m enthusiastic about the relationship among technology, the changing relationship between listeners and radio, and the ability to develop programming that meets their needs.
One of the things that technology enables is greater interactivity. Imagine somebody hearing something over the radio in what I’ll call the linear string; through the broadcast chain, then distributed across the country. That’s linear. Now imagine an online interface at the same time; those people experiencing audio in linear reality can simultaneously watch and listen online, and give feedback. We haven’t discovered the secret sauce for how to use dynamic feedback in the online world; that interface will change, but it’s the relatability of hosts with audiences that really matters. There’s a big dialogue between radio and American consumers every single week, and that is part of the reason for my enthusiasm. We want to develop a better online interface with those audiences, and look at our business more from an audio perspective and less from that linear delivery system. Our challenge from the business perspective is to create different monetization models. I download Meet the Press from iTunes, and the monetization model they’ve created sticks with me. There’s one presenting sponsor, Boeing, with a quick little five- or ten-second gateway at the beginning, and then another mention toward the middle. We can take our audio product, still monetize it incredibly effectively through that linear transition, but also monetize it in other ways.
RI: What are some specific areas you’d like to address?
CR: I don’t think the radio business has worked as collaboratively as it should between the spot operators, the broadcasters, and some of the networks. When I think about Premiere’s ability to drive reach, if we are able to work collaboratively with broadcast companies in a spot overlay, the frequency of that client’s message will go up a lot. Especially when you have a national company that’s able to deliver the very best of a localization message through technology.
RI: Are there any changes within Premiere that you’d like to make?
CR: I’m thinking in reverse way. I’m saying: What are the things that I really need to absorb here? How can I sit down with broadcasters and national advertisers and have this Premiere heritage become part of who I am?
For example, maybe the southeast needs one kind of spot. By putting the right ad in front of the right consumer and the right context at the right time, the relevancy of that advertising improves dramatically. And when relevancy improves, engagement increases and the relative value delivered to the advertiser improves.
I am enthusiastic about working with broadcasters to get the big national advertisers — those capable of writing deep eight-figure checks — to see the value of the network reach we’re able to deliver. To work collaboratively with the folks in the spot marketplace, and deliver an ad campaign that’s never been possible — that’s something I’m enthusiastic about tinkering with.
If you look at the quality of the advertisers we work with, they’re the biggest advertisers in the nation; by definition they have the largest ad budgets, and work in intensely competitive industries. These guys are always chasing the next better thing. Today we absolutely have to deliver a custom-type solution to these guys, because their businesses are feeling that intense competition. I definitely want to work toward that.
I’d like to impact our team with the ability to employ technology even more. I think we will be able to deliver new services to our broadcast partners. The idea of placing the right ad in front of the right consumer in the right context, when the temperature is right. This is why Google is as effective as it is. This is the secret sauce. When we can contextualize advertising more effectively, it’s going to work better. I think technology will enable us to do that.
RI: What are your thoughts on how electronic measurement will affect radio?
CR: Nobody wants to know better what’s happening between consumers and the medium than we do, right? I’m anxious to see what people, as best we can tell, are really doing. Understanding what’s happening minute to minute, hour to hour, day to day will help us provide a better experience to our users. I talked earlier about gaining dynamic feedback; this is another source for us to gather dynamic feedback, understand and process it, and provide a better product.
I’m a technology optimist, and I think we’ll benefit. Large national advertisers are enthralled with their online efforts because they say OK, my ad was served to this many people in this time period and I had this many click-throughs. But I think we need more precision; we need more real-time measurement of audience incidence. I think it will give us great information to provide better product.
RI: You mentioned the importance of tailoring advertising to the right people. Are you looking to narrow down your audiences? Do you want talent to target more specific groups?
CR: The talent conversation is separate. We want our team of hosts to be relevant to as broad an audience as possible, but that makes sense around the niche they’re seeking to attract. There is a high level of loyalty, for lack of a better word, between the listener/user and that host or program. That’s the audience acquisition side; we entertain, inform, and enlighten; that happens between the host and the audience.
When I’m talking about putting the right ad in front of the right person at the right time in the right context, that’s from an ad operations perspective. In terms of technology, let’s say we don’t want to talk about the new spring fashions until Atlanta has its first 80-degree day in the southeast. Think how incredibly effective it would be if on the first March day the temperature registers 80 degrees in Atlanta, spring fashion ads throughout the southeast. Until that day, another set of spots would be running. That is the kind of on-the-fly messaging adjustment that people have used effectively online. While it doesn’t get down to the individual consumer level, its getting down to the station and daypart level, and those are proxies that work.
RI: Is there a particular programming opportunity out there that is not being met?
CR: I’m interested in the younger end, what’s happening with 12-34s. When I see our line-up, we’re delivering adults like crazy. But I don’t have something in development around 12-34s or 12-24s, and I think we could gain by understanding better what’s happening there. These guys are so connected; their cell phones, laptops, and iPods are the three essentials. Kids from 8 years old up to about 25 can’t live without these devices. So how do we create relationships with them? As I said, we can create whatever online interface we want and invite them over from traditional media. Getting their feedback through really good user interfaces matters; being able to speak very legitimately, reflecting who they are. We may not engage them on the radio with quite the number of quarter hours that we did in 1987, but if we’re engaging them at considerable quarter hours over the radio and then inviting them to spend time with us online, where they can provide feedback, submit music that they love, we can do instantaneous run-off polling, and have that reflected both online and on the air. Then we can be R&Ding them, test-kitchening them. Maybe on one station, then more, to see if there is something there that we can we massify around different products or categories. What we’ve seen with people’s online media use is that they’re able to reflect themselves in the media they consume. We’ll never be able to do that fully because we’re in the broadcasting business, but I think there are ways we can involve people in that process. Particularly on the young end, where people are really active.
RI: What are your criteria for examining new talent?
CR: We have to be looking for the folks on single radio stations who are doing something different, because that remarkableness is what cuts through in today’s crowded marketplace. What’s really happening out there that sounds different to consumers? What makes something remarkable? It’s finding people who are connecting in a really different way that is real and authentic. They’re in the 21st-century media marketplace and connecting with people. So then you say, how does that happen on 10 or 12 radio stations, maybe regionally? What does that success look like, and how can we massify that to get to 50, 100, 150 stations?
RI: What are your thoughts on HD Radio?
CR: What HD does for broadcasters is take the risk down. I don’t have to take an FM radio station and test this hypothesis, I can put it in this incubation appropriate HD2 environment, and see how it works by simultaneously having it on HD and also online.
We’ve got U.S. broadcast penetration in the low 40 percent range, so people can stream. In the workplace people stream like crazy, and I think the streaming effort can help that. We can put something on HD2 and help identify those remarkable things with very little risk.
If you’re really clever, you could use your broadcast outlet as a way to invite people to both the online and HD2 product.
RI: There’s a lot of talk about terrestrial radio’s slow growth. What’s your take on the overall health of the radio business?
CR: We talk a lot about the outcome, yet we have very little control over that; it’s just what falls out of the end of the machine. But we have a lot of impact on the movement of that machine. I think those movements include making certain that the sales force is fully informed about what is happening with the relationship of audio and its impact on people and consumers. What is that linkage? How does that move? Also important is understanding the effect of the audience having a trusted relationship with a radio host who turns somebody on to a product or recommends a product. Essentially, that is massified word of mouth, and that’s the most desirable advertising there is. We wouldn’t advertise if we could just go from person to person to person and tell them about our products, right? Advertising is just trying to massify that impact.
We have to leave at the door this notion that if it’s a slow growth environment, we’re going to just grow slowly. Broadcast companies will distinguish themselves if we’re willing to go out and expand the number of folks who use our services, and scale the advertising to the budget that’s appropriate for the client. Roy Williams has a great saying: “Advertisers should own what they can afford to own.” That’s a clever way of saying buy enough frequency in a narrow enough horizontal window so that you can impact potential consumers. If that means you can only buy 3 p.m. to 8 p.m. on Sundays on an individual radio station, then buy that with enough frequencies so that everyone listening to that one station from 3 till 8 will hear your ad. The same is true in the network marketplace. It may be that somebody can only budget three spots a week in a spoken-word program. Those three spots will have great impact if they’re voiced by the host or live in the program. Something with relatively light frequency, but applied in a way that’s getting the maximum impact.
Look at the transaction that Clear Channel announced with Google earlier this year. Clearly, Google is in high demand around the advertising industry. That team really believes there are a whole bunch of people in the online-only ecosystem that will really benefit from using radio. It’s a way to invite more people to experience those businesses. Ultimately, you achieve a virtuous circle where the number of advertisers increases, the results for those advertisers improve because they’ve invited folks from the radio space.
I think we have a little bit of a narrow view if we think we’ve called on every single advertiser out there. I don’t think we have fully identified every single advertiser who can advertise on a single radio station or on every radio program that we syndicate nationally. We have to expand the number of folks we do business with. We have to demonstrate in a closed loop way that there’s a return to making this investment. Over time, that process will bring more people in, and ultimately the revenues will grow a little faster than they have.
RI: Are radio’s key challenges external or internal?
CR: Let’s call them environmental. We exist in an advertising ecosystem that’s changing. The way consumers respond to advertising is changing, as is the way advertising exposures happen against consumers. There’s a whole series of ad delivery systems that just came into existence in the last 10 or 12 years. For radio, it’s about understanding that full ecosystem and then saying, where do we have an opportunity to connect an advertiser with a consumer? We want to do everything we can to make sure we’re employing that perspective as we build campaigns for core customers, and then make ourselves as accessible as possible and work with our sales teams to find the previously unidentified advertisers.
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