That statement from Entercom CEO David Field may rub some people the wrong way, but that’s one of the reasons he believes radio doesn’t get a higher share of ad spending. Radio has been stuck at 7% of the total advertising pie for many years. Field was detailing the new opportunity he says Entercom and the radio industry have with the Entercom-CBS merger. He believes the much larger company will give Entercom the scale it needs to compete with other media.
Field believes with a larger Entercom there will be two companies with a major voice, the other being iHeartMedia, which Field has always been impressed with under CEO Bob Pittman.
Field said there is an irrational disconnect between radio’s actual share of ad spending and its significantly stronger value proposition. “Radio has long been under-valued and under-appreciated by the advertising community. It is extraordinary that this immensely effective medium that is number one in reach, number one in daytime usage, the least disrupted of any traditional medium, and arguably number one in return on investment, receives only 7% of ad spending.”
He then asked the question, Why doesn’t radio get a higher share of ad spending? And his answer: “As an incumbent media competing with shinier and sexier alternatives, radio has suffered from inaccurate perceptions that fail to grasp its vibrancy and effectiveness. It has also suffered from a woeful lack of industry advocacy that enabled false perceptions to permeate the thinking of advertising leaders. In short, radio has been punching below its weight class. That has started to change with iHeart and its advocacy for radio to compete more directly with other media. And they are starting to move the needle with their impressive top-line growth in recent quarters. Entercom is now that second major voice.”
Field said the potential is clearly there for radio to be rediscovered by frustrated advertisers looking for ways improve the efficiency and effectiveness of their buys by shifting the media mix a bit more toward radio. He says the Entercom/CBS merger creates a catalyst for that to happen.
As radio is a B2B sale, the only way to maximize revenue in a B2B sale is to “show them the money”. That means generating documented, advertisers sales results from your campaigns – sale by sale, customer by customer.
As per Gord Borrell, who studies the collective needs of local/national advertisers more than anyone: “There’s one more thing I should mention about broadcast media. Today’s advertisers are clamoring for a sales rep who possesses marketing savvy, someone who can help them not only create a campaign, but also breathe life into it across various media channels.”
That means if advertisers are clamouring (now I’ll use our Cdn. spelling) for something, they’re not currently getting it. That gets more than a few radio folks rattled – even angry – as it challenges the status quo thinking that limits our industry to inflation-adjusted, flat-lining revenue.
Radio sellers need to develop the overarching, unbiased marketing strategy that produces documented, measurable sales results attributable to each dollar of the media spend (those of us who do that already, hands up, please), and increases the client’s revenue. That most often comes from increasing the marketing dollars pie that feeds the strategy – and the ability to generate, document and attribute advertiser sales results in a number of ways is the easiest way to induce advertisers to increase those marketing dollars.
As marketing strategy is foundational in helping generate the ideas for advertisers’ sales-accountable creative, the onus is on the rep to first identify and quantify the client’s opportunities, objectives, pain points and resources.
Beyond sales training, it’s the responsibility of radio management and ownership to help the sales staff continually grow and sharpen their skill sets in so doing. Those skills are honed and made more fruitful in group strategy sessions with proactive – not after-the-fact – confidential, client case-study by confidential, client case-study, as each case is in progress, so that the clients can also benefit from the process.
The best thing is that it propels those who are willing to set aside those all-too-common, less-than-bountiful advertiser outcomes, and commit to doing what they’re not doing (but should), to produce radical revenue growth for our advertisers, ergo, our industry.
Fact – not just philosophy: the reciprocal action by the client is almost always a larger allocation of dollars to the media rep who makes that happen.
Should radio take the lead in giving advertisers what they tell us they want (but radio doesn’t give them); and in creating and selling advertisers the customized-to-their-opportunities-and pain-points marketing (not limited to radio) strategies that do that, our industry’s relatively flat-lining revenue will begin a significant upturn.
It not only generates more revenue per hour of prospecting, preparation, pitching and servicing – it’s a heck of a lot more fun than just limiting ourselves – and our advertisers – in cranking out another 52 week schedule proposition with three commercial spec spots filled with (easily remedied) platitudes and generalities with a side-dish of “me-too” digital marketing.
It is time to shake radio out of its status quo, meet our industry’s challenges head-on, and make far more money than all of us have been making, by giving advertisers exactly what they tell us they want: unbiased, over-arching marketing strategies (not limited to our stations and digital marketing services) that provide documented sales results that advertisers can measure to the penny; all attributable to their media spend with us.
That increases the size of the advertiser revenue pie – and our slice, in so doing. The odd thing is that broadcaster after broadcaster says “we already do that”; but ask our industry’s advertisers, and they vehemently disagree.
David’s right. It starts by not selling against other radio stations—sell against the real money: TV, Digital, print. We have TEAMS of sales people bashing radio!!! Instead we should be 100% focused on winning dollars from other media. When I’ve had P/L responsibility of radio properties, that’s how I focused the sales teams–go for the real money.