Field Plans To Work Closely With iHeart

7

More from the Ryvicker investor meeting where David Field was asked why iHeartMedia was doing so well posting revenue growth for 17 consecutive quarters and margins in the high 30%’s. Ryvicker writes, Field believes it’s because of iHeartMedia’s scale and national footprint, which gives the company a seat at the table with some of the largest advertisers including Ford, AT&T, GM, and others.

Ryvicker writes that after having the CBS assets to work with, Entercom will have that same scale and hence same opportunity to grow revenue and achieve significant margin expansion. Ryvicker says after the CBS deal closes David Field’s mission is to work with iHeartmedia to change the “mix shift.” “Right now, radio ad dollars total $13B, representing a 7% share of the ad pie. With two large scale advocates for radio, there is a real chance that advertisers will start to shift more money into the sector. It doesn’t have to be a lot – for example, an incremental 10bps of market share equates to an additional $250MM of incremental revenue.”

7 COMMENTS

  1. “The more you know” is making a native comment that is altypical of many in radio, especially the consultants on Radio Ink trying to patronize station owners. You don’t our can’t just “raise rates,” with the exception of small stations in minor markets who might be the only traditional media option. But in major markets and especially with agency-driven business, the marketplace and marketplace demand or lack thereof, determines the overall price and rates the advertiser will pay, not the seller/the radio stations. The era of continually reading rates is long gone, because the overall demand on market inventory is long gone. The obsession with “the rate” is highly misdirected also… Radio station owners and managers better start focusing on what sort of results they are delivering for their advertisers and not on “the rates,” because the number of available radio advertisers in major and medium markets is rapidly declining. This is being driven by unalterable forces like the many mergers the last few years of supermarket companies, the consolidation of auto dealer ownership, and more… and the huge presence of trackable digital media that was not there 15 years ago. Radio needs to hold on to the advertisers it has by being committed to and accountable for the results of its advertisers, and a mindset of “raising rates” is far far removed from the goal of advertiser retention.

    • Wow…that was quite the statement. (I think?) All I’m saying RR is a “price for share” practice is a race to the bottom and talk is CHEAP. Results drive expenditures and always should. Demand is always the driver.

      And BTW, I’m a active 30 plus year radio veteran GM….I may not be the smartest dude in the industry, but believe me, I’m far from naive. #sad

  2. Not that DF would read this..but if he really does want to emulate I heart’s “seat at the table” and “national footprint”, it would be awesome if he doesn’t emulate what that means in reality, currently.

    What it means in reality, right now…. is “we’ll cut our overall rate structure for our business (and your account(s))so significantly that you’ll find it a must to give us additional share of your limited budget”.

    Advocacy for our industry would be incredibly important and I wish him great success. Cutting rates to gain additional share of a flat budget means you’re just another hack trying to outbid your competitors.

    • Yes, iHeart is not advocating for the industry, they’re advocating for iHeart as they should. And the rest of the industry can go to Hell as far as they’re concerned. Hence their pricing strategy.

      There will be no industry advocacy because every broadcaster is, by nature, in it for themselves. And because advertisers buy media and results (perhaps), they don’t buy the radio industry.

LEAVE A REPLY

Please enter your comment!
Please enter your name here