December 2, 2015

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First Mediaworks

03/31/03 Are We Thieves, Stealing From Thieves?
I’ve been in the meetings when the CFO says, “ We’re up 20 percent across the board. Our growth is strong this year. We’re going to look great on Wall Street.” Of course, growth is a wonderful thing, but what if your growth is counter-productive? How could it be?

Imagine that the same day your growth was up 20 percent, two other companies had to report that they each lost 10 percent this year. Of course, they are your competition, so who cares. Right? Who cares if the growth you received came from your competition? Apparently, it does not matter, because that is exactly what is happening in Radio. We’re stealing dollars from Radio stations across the street. This year, your numbers are up at the expense of other Radio companies. Next year, your numbers will be down because they will figure how to get the billing back from you. It is a never-ending cycle.

Meanwhile, Radio is stagnant. Yes, somehow in the last decade, we went from 7 percent of the overall advertising pie to 8 percent — if you believe the numbers. That’s significant, yet it could have been 9 percent or 10 percent or more if Radio had its act together. Still, we rob from Peter to pay Paul. Radio is not growing enough.

What will make the difference? It’s not sufficient for Radio companies to measure year-to-date performance, because most of those dollars are coming from other Radio stations. Of course, under heavy Wall Street pressure, who cares about other Radio companies? Exactly! That is the problem. As an industry, we all talk the right “pro industry” chatter, but companies are out for themselves.

Look at it this way: If overall annual U.S. advertising expenditures total $332 billion, one percent of that is $3.32 billion. That means if Radio "stole" just two more percent of those dollars from other media, we'd be adding $6.64 billion to our industry's coffers.

But it seems that no one is focused on outside growth. We’re all intent upon stealing from the other stations. SHAME ON US!

The promise of deregulation was that we could show circulation higher than the newspapers (many clusters have), but it is NOT being exploited fully. Newspapers are still gaining in revenue, though circulation is dropping.

Radio is missing the boat. We’re being lazy. It’s a lot more difficult to convert people to Radio than it is to steal existing Radio advertisers from another station, but this is short sighted. The opportunity is huge, yet it’s not being exploited.

From this day forward, I would like all Radio companies to stop stealing and start building. If not, we all lose. It is time to start measuring company success based on your percentage of the overall advertising pie, not just growth coming from other Radio stations. If you’re growing your percentage by stealing from other media, you’re on the right track. If you’re stealing from Radio, you are not really interested in Radio — you’re only pretending to be.

I feel that 10 years has passed with very little industry progress. The only media more embarrassed than we are is the billboard industry, which gets a lower percentage than we get. What will it take to get Radio to focus on taking dollars from other media? Hey, Radio, wake up!

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