From the Corner Office
This
Month's Topic:
We Need a New Selling System!
Hello,
This month in my column, I would like to discuss the way we currently sell our medium. Contrary to recent reports in the press, Greater Media has not entered into any corporate agreement with Google.
Right now, there's a lot of speculation floating around about a possible new form of selling radio time. Google is making some very interesting advances into radio sales. They've acquired the dMarc company that sells unused inventory; they're creating a sales staff in major cities; and they're rumored to be interested in cutting a deal with a major broadcasting group for some kind of inventory.
What's going on and what does it mean for us?
Like all other businesses, radio is experiencing dramatic changes due to the Internet, whether we like it or not. Countless industries have had their distribution, warehousing, and sales process radically altered by the web. Just ask local retailers how they reorder inventory today vs. five years ago. Chances are that they reach over to their computer and are able to quickly and reliably reorder what they need; many don't even need to do that. They just rely on the PC to keep track of when they're running low and it automatically makes sure they don't run out.
How does all of that apply to selling radio?
We all know the steps involved in buying advertising on a radio station, and historically we have not made it easy for an advertiser.
The traditional model consists of face calls, phone calls, faxes, emails, and technical debates about how to package to meet the buyer's cost-per-point and interpretation of ratings, both quantitative and qualitative. Then, we receive copy, key it into a traffic system that spits out an invoice that gets printed, mailed (via snail mail) and reconciled by hand at the advertiser's agency or business. It sounds daunting just to explain the steps. Think about how that sounds to a businessperson who's not an experienced media buyer.
Along come guys without a vested interest in keeping all those time-honored systems in place, and they look at our medium and ask, "why can't the ads I hear on the radio be targeted to my life and what I'm doing right now? If I'm driving by the Best Buy and I'm in the market for a flat screen TV, why can't the radio station run an ad that's going to get me to turn in and take a look at the one they have on sale?"
Wow! That's rethinking the system. And that vision of the future is technically possible right now. Why didn't someone in radio think about it? Because we're just too close to the forest to see anything but bark. But we can back away from the tree trunk, take a deep breath and recognize that we can create added demand for our medium simply by making it easier to buy.
The process is called "disintermediation" by the tech-heads, but it's far more than just another jargon word. It's a process that we should embrace, not run away from, even though it threatens our established order in the industry. We need to look at each and every step in the selling process - from prospecting, needs analysis, and customer expectations, to pricing and inventory control, scheduling, invoicing and payment - and work to eliminate or rework all the steps that don't add value or that increase the barriers to ease of purchase and use.
Repeatedly, we've heard from our customers (agencies and retailers alike) that radio's just too hard to buy effectively and efficiently. We've heard from our sales staffs time and again that prospects tried radio once long ago and it didn't work.
We continue to hand-write sales orders to key into software that was first written in the 70's because we've always done it that way. No wonder we can't grow radio's slice of the pie.
Are there benefits to the radio industry by tearing up our entire sales model? I believe that there are and that they're significant. A new, easier to use, technology-enhanced buy/sell system will allow us (and maybe even force us) to increase radio's share of the advertising pie. It would allow our sales staffs to focus on their prime mission: to sell solutions to business problems using radio as the key ingredient.
They need to use the time to contact, explain and educate a whole new class of potential advertisers about the effectiveness of radio in the 21st century. While the industry has done very good work proving our points with the RAEL research, we are still not effectively getting the word out to the people who matter, the people who need to use radio.
Someone has to go, one to one, and make that case to convince businesses that we have a solution to their problems that's local, effective and affordable. That is a far better use of our sales staffs' time than writing up orders and crunching to meet the cost-per-point.
How do we move forward from here?
We need to establish an industry-wide task force to study the processes of radio sales and begin to work toward a system that would allow radio to transition to a new selling process as we move to make radio more accountable in the eyes of our clients.
We're not used to thinking this way. Radio's history of small, independent operations forces each station and each company to reinvent the wheel, again and again. This is one of those issues that is ripe for "coopetition": sitting down with our competitors and cooperatively addressing the logistical and technological issues on an industry-wide basis so that we can all turn to the ultimate work of competing effectively for more advertising dollars. The technology exists today; what's missing is the will to commit, fund and implement it. The industry has been working on electronic invoicing for some years now; there's no reason why we cannot solve that issue within ninety days. There's no reason that we cannot move forward to create a task force to study interconnection, integration of ratings data and audience delivery, and an electronic marketplace that's not just for leftover inventory.
I don't believe that an eBay-type marketplace, such as some TV advertisers are working on, is the answer for radio. We've never sold radio like television, and we shouldn't allow them to dictate the future of radio sales. But by the same token, we shouldn't allow Google to move in and become the ultimate national rep for the radio industry.
This problem and the industry-wide effort needed to solve it is part of what I hope the RAB will focus on in the coming months. The RAB needs to become the "marketing arm" of radio - selling both the benefits and opportunities that our industry provides to its listeners and advertisers. We should be the primary source of audio entertainment in the advertiser's mind.
The industry has been reactive to the pace of change and we need a focused effort to get ahead of the curve. This issue is so potentially transformative that we need to set aside our competitive instincts and commit to an industry-wide solution.
Smart people from both sides of the buy/sell equation need to sit down and come up with a system of selling and accountability that will integrate with the electronic measurement that is coming to radio.
Whether it becomes an integrated electronic buying platform, or something more like Internet search, we need a system that allows our industry to maintain its local strengths while simultaneously coming together to compete effectively in the aggregated, on-demand media that are the future.
We don't have a complete solution yet, but we urgently need to begin work on the problem. If we don't move to control our future, others will control it for us.
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.
Have a great month!
Best regards,
Peter November 2006