November 2014 – What’s the Forecast?
November 5, 2014
Not the weather outside, although Fall has arrived in New England. I’m referring to Forecast 2015, coming up on the 19th of November. It’s the annual gathering of broadcasters, investors and financial advisors who provide the capital to keep our industry vital and growing. I am pleased to be the moderator of a discussion with three respected investment leaders. Artie Burns of Citizens Bank, David Bank of RBC Capital and Brian McNeill from Alta Communications will join me for a lively discussion of how our industry is viewed by investors.
This is a significant topic, for I believe that a number of investors are not fully informed of the strides that the radio industry has made to adapt to the ongoing digital disruption of our industry. It is more important than ever that representatives of our innovative radio companies explain what they have done to transform their companies; which experiments are working and which efforts have failed. Too often, our pitch for radio sounds like an effort to put a happy face on a low-growth industry.
While it is true that the past several years have been challenging, the important thing to note is that broadcast radio has fared very well in comparison to other disrupted legacy media such as newspapers and magazines. We are also a natural companion to digital initiatives, complementing their one-to-one engagement with a one-to-many delivery of the message. Broadcast can get customers into the purchase funnel; digital can convert them to purchasers.
Each year for the past five year, radio has shown growth in its digital revenue, proving that we have adjusted our efforts and are now serving our clients with integrated, multi-platform solutions. Certainly, I would like to see more revenues from more clients, but we need to remember that clients have many more of competing sellers to choose from. Radio account executives now compete with a broad spectrum of pure-play digital sellers, digital business directories, self-serve search and SEO platforms and online display ad networks that number literally in the hundreds.
We are optimistic that, as this period of client experimentation evolves, radio can and will leverage its historic advertiser relationships to aggressively retain and expand our relationships to include full digital services. A number of innovative radio companies are moving in exactly that direction; the activity is there and we will see it in the revenue metrics.
The radio industry is in the midst of transforming itself into a trusted, results-oriented media company, and in that process, will create relationships with an entirely new class of local advertisers. Whether we are making sales calls to a traditional broadcast client, an integrated program buyer, or a digital-first advertiser, radio sellers will become more adept and knowledgeable about a very full range of tools that can be brought to bear to solve client challenges. We have a long track record of effective brand-building, promotional integration, and excellent ROI that point to a promising future.
These points are often lost on an earnings conference call, or even in a capital call meeting. It takes time to fully explain how innovative radio has become. We have some excellent broadcast leaders doing great things, and we need to have them on hand to make their case to our investors. It is a necessity and a privilege to have someone invest their hard-earned capital in your business endeavors. To maintain their confidence, we need to share our future vision with them.