From the Corner Office
This
Month's Topic:
In A Sea of Change, Where Are We Headed?
Hello Everyone,
Can you hear it? Can you feel it? The media environment seems to be changing...again. The future of radio is not annihilation by satellite radio and the iPod after all. Internet radio is growing strongly... powered by local radio station streams, which are attracting listeners at quadruple the rate of internet-only stations. Satellite radio receiver sales for this holiday season were off dramatically.
There were reports that some Google advertisers were disappointed by their investment in Google ads during the past holiday season. Radio is still second only to TV for time spent with the medium, and Americans still listen to radio 5 times more than the time they spend on the internet.
Are people actually changing their behavior? Not really; radio professionals know that people's habits don't change on a dime, and, more than many other businesses, we should know that just because you lay claim to the buzz, it's not necessarily going to show up in the numbers.
In this case, what we are seeing is some more balanced reporting, based in facts, rather than the breathless predictions coming from writers and PR flacks, spinning the latest new media innovations. Sooner or later, the next big thing has to start producing results. Sometimes, they do; many times they fall short. Remember all the satellite radio subscription targets?
Radio needs to promote a basic truth: We're a primary medium in the lives of our listeners, and we ought to start acting like it in the presence of our advertisers and investors. We have many assets that any media startup would just die for. They include:
* a huge installed base of receivers
* local identification and origination
* legendary brands and personalities
* credibility and reliability in our community
* the trust of our listeners
* a relatively high acceptance of advertising's suitability
* the affordability to our advertisers to be really effective
* the go-to medium in an emergency
* a nationwide sales force that has relationships with business leaders in
every town in America
We have facts, but we don't have a story or storytellers. Right now, the media grabs onto the next big, "cool" thing and champions it, like the iPhone. Radio just isn't cool. We need to accept that and develop a strategy that plays to the strengths listed above.
The radio industry needs to take a collective moment and step back from the trees and see the outline of the forest. We're coming off of 10 years where our industry's focus was twofold - how consolidation would save us, and how much Wall Street would love us.
During that decade radio spent so much time and energy touting the next big/new thing for ourselves that we lost sight of our customers. Radio lost our focus on our local communities and spent untold time and millions of dollars trying to homogenize our products nationwide.
We took our eye off the rising challenges of new technology. Radio was slow to make our presence felt on the web, and even now, some reject streaming audio...because of cost.
We all need to step back and take a longer view of our business and our mission. Here's the heresy: perhaps the industry is facing a period where historic margins of the past 10 years are no longer possible. This may be the right time for substantial reinvestment in our product. Maybe this in the beginning of a period where operators of stations have a better answer than financial technicians. And perhaps our listeners and advertisers have more useful feedback for the future of our business than Wall Street.
If we listen closely enough to our customers, what will we hear? Well, I've been hearing things than are startlingly different that what you'll read in some of the press:
1. Radio is no longer a primary medium at many large agencies. We're still respected for our targetability and our effective ROI, but radio sellers are notorious for selling against one another. We've got to stop the death spiral of how-low-can-you-go for share. We have devalued our own medium in the 90-day quest for share. All we've done is shrink the pie. We've heard stories from advertisers that they are amazed how cheap (not inexpensive) radio stations come in at, and just when they think pricing reaches bottom, another station or cluster goes lower.
2. Radio needs to take product risks. Collectively, we have not met the demand for more customized entertainment and companionship. We can't continue to focus on diary-only success. We have to get off the dime on electronic measurement and accountability. We have to get comfortable with higher-common-denominator programming.
3. Radio has to address missing demographics. We're the ones who told a whole generation to pick up an iPod. We're the ones who couldn't find an economic basis for youth radio. Don't blame them. In fact, they may well come back if we give them something to listen to and get excited about. If you take a dispassionate look at the target of most radio stations, it's easy to conclude that radio is starting to lose the definition of "mass medium". We've essentially ignored Teens since the early 90's, and now, Oldies and other 50+ formats are going away.
4. Radio can still create mass; and we must harness that power to move large groups of listeners onto the web to actively and willingly interact with products and services.
5. By and large, radio is still selling to the wrong people. We have not made the time and priority to explain our medium to the Chief Marketing Officers of America. We wonder why we are marginalized by technical buyers in the media department.
6. Radio cannot expense cut our way back to financial health.
7. Many radio professionals have lost faith in our leadership to effectively address our problems rather than short-term self-interest.
What radio needs now are not just leaders; we need radio statesmen and -women. We need people who can put their short-term self-interest in their pocket and do the right thing for our medium. We need people who will speak the truth to an advertiser when they are not investing their money wisely; we need people who will make the case to their employer for investment spending when it's prudent. And we need this leadership at all levels of the business, not just the executive suite. Every one of us at Greater Media and every other radio company has to take seriously our role as an ambassador for radio.
Risky? Yes. But what's riskier is putting our good judgment aside and "just doing our job" and hoping for better days.
Why? Because hope is not a strategy. And radio needs a strategy.
Please feel free to e-mail me by clicking on the "Ask Peter" icon posted below. I would love to hear your feedback or answer any questions you may have.
Best regards,
Peter February 2007