From the Corner Office

2007 proves the truth of the Chinese proverb, "May you live in interesting times."  I cannot recall a previous year jam-packed with such challenges and such opportunities for our industry. It used to be that we could count on modest growth in radio spot advertising, some flux in the ratings for our properties, and pretty much figure that next year would be like the year just past.

No longer. Today, we're being challenged on many fronts. Distractions abound, and if you don't have an accurate compass, you can easily get led off course by the hype on one hand, and the doomsayers on the other.

Radio, as a medium, is a healthy and vital part of the lives of more than 260 million listeners each week.  That's a tremendous installed base of customers that most internet sites could only dream of.  Yet radio is being challenged as never before by the web, which is coming of age more rapidly and with more innovation than anyone predicted.

2007 has taught me to stop quoting the past. Yesterday is exactly that and it's no predictor of tomorrow. If I had told you three years ago that radio stocks would be in Wall Street's dog house, you would have called me crazy. If I told you three years ago that Google would be a $700 stock, you would have thought I was delusional.  All that and much more has happened, and there's more to come.

Looking to 2008, I first look at the overall economy. In the past several weeks, we have moved into much more treacherous waters with the housing and credit crunch, but I do believe that the Fed will do all it can to keep us growing, even if it's into the headwind. The specifics of the radio economy have the added challenge of stabilizing and trying to grow our advertiser list and our share of advertising dollars.

I know what WON’T work, and there are specific things on that list: 1. lowering rates;
2. increasing inventory; 3. beating up sales people for share at any price; 4. continuing to call on the usual suspects in the media department and whining about being zipped on the buy;
5. talking about new initiatives if we don't have the courage of our convictions when it comes to budget time. These are all sure-fire ways to sell ourselves out of business.

What WILL work?

1. Selling ideas and programs that will get the results the advertiser wants, not just what you have in a package.  Stop selling spot schedules.

2. Finding your way out of the media department. In most agencies, there are now people dedicated to online and interactive media.  If you're trying to sell these programs to a time buyer, odds are against you.  They'll just become value-added to the buy. You have to get to planners and account people in order to know what their client wants in the way of results.

3. Learning the language of the online world and not being a "deer in the headlights" when someone asked how many page views your station's website gets.

4. Selling our medium, not just your station. We've got a great story and you should know it by heart (do you?).

5. Staying focused and staying positive. Attitude matters in any game.

6. Backing up your new media game plan with a dollar investment. Otherwise, it's simply a hobby.

We need to redefine who our competition is and what our business is. We get sidetracked thinking that the station down the dial is taking "our fair share" when it's really the new media operators like Google, Facebook and YouTube who are siphoning millions of ad dollars into their new universes. In the big picture, radio is in the relationship and communication business.  That means that anyone who can create a compelling reason to listen, watch or click on their offering is competing with us for our listeners’ time and attention. Success in the future will not be defined by the share of the radio listening; in fact, that's a small galaxy in a much larger universe of media usage.

We have to work more diligently on deepening and broadening our relationships with our audiences and invite our advertisers into that relationship – not just to pitch, but to expand their relationship with our listeners. That's a big, wooly goal that has to be redefined and honed through a lot of trial and error and learning from experience. None of those qualities are historically imbedded in our radio culture. We work something out in a back room, put it on the air and expect everyone to be amused and amazed. This is a different dynamic in which the listeners and advertisers have to play a more integral and interactive part. If we don't take these steps, we risk being identified as a one-way medium in a land of two-way dialogue, greater choice, and almost infinite variety.

Lastly, we have to be aware of the changes that are occurring in the advertising community. It's nothing short of a redefinition of marketing in an interactive world. As in our industry, a lot of smart people are trying to respond to the challenges that confront an advertiser in 2008. Like us, they are trying to get a message through in a hyper-cluttered world; trying new execution of media plans and sometimes turning the whole plan upside down. In this environment, with that much money at risk, we need to keep in mind that we're not the only ones trying to meet new challenges.  Just think, as you sell new ideas and approaches to marketing:  what got you thrown out of an agency last year may make you a hero in 2008.

Yes, these are interesting times, especially for those of us who enjoy a challenge!

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.