Are We Killing The Golden Goose?

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(By Wayne Ens) Before we address the question of whether we’re killing the golden goose, let’s verify that broad­casting is still very much a “golden goose” com­pared to most other industries.

According to the NYU Stern School of Business, we enjoy a 17.64 percent after-tax operating margin, well above the all-industry average of 9.51 percent. Our furni­ture and home furnishings advertisers struggle to surpass a 6.72 percent margin, automotive sales margins hover around 4.87 percent, and grocery and food industries eke out 2.78 percent margins. Even the lucrative aerospace/ defense industries only turn 10.57 percent margins. Our newspaper competitors struggle to reach 7.07 percent operating margins.

So let’s agree: Our industry is still in its golden goose cycle. But we’re killing that goose by incurring debt to buy more geese than we can afford — and by demanding our geese lay too many golden eggs.

I’m not the first person to jump on the “fewer commer­cials” bandwagon, but I fear if we don’t all jump on soon, it will be too late to save the goose. Once when I spoke about the advantages of creating more revenue with fewer com­mercials, I had a sarcastic salesperson say, “Only radio would employ a sales consultant who advocates having fewer of the only thing we have to sell, spots on the air.”

With those who think they’re selling “spots,” you can’t win the “less is more” argument. But we’re not selling spots, any more than we’re selling ratings points or station formats. We’re selling results.

Your advertisers invest with you for one reason: to reach and influence more people to buy their products and services. You would have to be blind and deaf not to see and hear the evidence that too many commercials, and, worse yet, bad commercials, will destroy the very audience your advertisers are trying to reach.

There are basically two types of media: intrusive or proactive, and passive or reactive. Radio falls into the intrusive/proactive category. Intrusive media reach and influence audiences as they go about their daily activities. Only intrusive media can reach and influence audiences to establish a brand and preference for a business before customers have identified a need for that business.

Passive or reactive media, primarily online and print, are those audiences must actively seek out to view in reac­tion to a need they’ve identified. Strategically, the best advertisers use intrusive media to inspire, and passive media to validate, the pre-need perceptions audiences have about their brands.

Radio’s intrusive nature is its biggest strength. We can reach and influence people and establish hard-to-change preferences long before they are in the market or begin their online search for a product or service. But that intru­sive nature is also our biggest weakness. Nielsen and other research organizations have reams of evidence about the tolerance levels of audiences exposed to numerous ads that interrupt or intrude upon the reason they tuned to radio: information and entertainment.

The weakness of passive media is that audiences must have an interest in the message to click on or purposely read the ad. Conversely, that weakness is their biggest strength. Those who take the time to view or read an ad have identified a need for the advertised product and don’t consider the ad to be intrusive or clutter.

But if you run too many ads, or annoying ads, on your station, the audience can’t avoid them. They won’t sit through too many ads waiting for what they tuned in for. They’ll simply jump to another media that gives them what they want, and your advertisers will go with them.

Our listeners will accept a certain amount of commercial content, particularly if it’s entertaining or informative, in exchange for the content they want for free. But new audio platforms, apps, or technologies won’t save our industry if the heavy or bad commercial content is intolerable. I’ve heard radio presentations that extolled the virtues of audi­ences who consider radio to be “like a friend.” How many times can your “friend” try to sell you something before they cease being your friend?

There is a reason diamonds command higher prices than rocks. There is an abundance of rocks, but diamonds are scarce. The salesperson who’s selling rocks is relegated to trying to prove she has the lowest cost-per-ton. The salesperson selling diamonds is selling on an entirely dif­ferent level. The salesperson selling radio “diamonds” isn’t selling tonnage, but value. These sales professionals have been trained to discover what each advertiser values, and appeal to that motivation.

They might be selling results in the form of consulting, creative, ideas, promotions, branding, or Web or foot traf­fic, but they almost certainly won’t be selling “spots.” Those sellers selling “cost-per-ton” will ultimately fail under the weight of that tonnage as it drives audiences away. Are you up to the challenge of selling fewer commercials for more, rather than driving our audiences and revenues to other media with too much commercial clutter?

Wayne Ens is the producer of the SoundADvice radio e-mar­keting system and TOMA research that proves radio’s intru­sive role in creating top-of-mind awareness for local adver­tisers. He can be reached at [email protected]

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Wayne Ens
Wayne Ens in an international marketing consultant, business-to-business sales trainer and author, specializing in helping media companies create stronger partnerships with locally-owned businesses. Wayne has worked with radio stations, TV, newspapers, and billboard companies to help their local-direct advertisers improve their return on investment.

13 COMMENTS

  1. In radio, our job is simple: entertain people and tell them where to buy stuff.

    While what passes as radio entertainment can be subjective…we have become good at creating bad sales messages for our advertisers.

    A properly crafted commercial message should motivate the listener to act. To go out and buy the product. It’s the first Truth of Advertising. https://davidtyler.com/the-5-truths-about-commercial-copy-writing/

    Creating effective commercial messages for our clients will have two effects:

    1) Stimulate listeners to act and
    2) Increase the perceived value of our work

    The result is that we can sell better results with fewer interruptions and save The Golden Goose.

  2. Since radio truly is inundated by irrefutable “Dogma”, “shelly-station owner” just sang from the hymnal – in full-throated sincerity and belief.
    She also just hit the binders and is insisting we’re going nowhere. And she is correct.
    “Subjectivity”? Ya think?

    • Lotta echos in the cranial cavities of yours, Ronnie, as only you know what your posts mean. Dogma your new, favorite word? It’s rarely used by anyone else. My questions for you await an answer..and of course, you don’t have them.

  3. Wayne is 100% correct. The PPM ratings in major markets prove factually, and demonstrate factually, that people TUNE OUT of amy FM music station en masses, by the 2nd commercial in a long cluster break. But the fact also is, major group radio operators are desperate for more revenue, so there is no way they are going to reduce commercial loads. And regional and national radio advertisers cannot measure ROI from individual stations and commercials, so the scam called selling commercial cluster breaks will continue. And the local advertiser churn rate will continue to be high, because the local advertisers counting on results from their radio ads, are the ones who get hurt when very little audience hears their commercial, buried in the middle of 8, 10, 12 or more commercials in a row.

    • There was a Nielsen study a few years back that showed little, if any, dropoff in listeners in clusters. Couple this with the recent studies of 8 and 10 ROI for radio advertisers and the whimpers of subjective radio critics vanish. Radio has survived many obstacles in it’s storied history, the most troublesome being the doubters and critics employed within the industry.
      Consultants and “formerly-in-radio” types, (sometimes one and the same) are to be shunned.

  4. Ronnie’s latest flatulation begs the questions:

    Ronnie-
    1. Define “better”
    2. Define “more listenable”
    3. Define “more influential”
    In Ronnie’s programmer mind, void of any sales knowledge, “better, more listenable, and more influential” means TO RONNIE, but Ronnie is not the target listener. Ronnie needs a 5 week course on what “subjective” means. (It means ‘to you and you alone’.) Ronnie, like many programmers believes that the opinions of the man/woman who pays the bill (the advertiser) is irrelevant. (He sells tires). But, Ronnie, he/she who sells tires understands tires and also understands those who might buy them. He/she also understands their town and the market. And he/she knows more than you because he/she owns-manages a business and you don’t and never have.

  5. “shelly-station owner” just reinforced all my points for me.
    “Way-to-go’s” for shelly. That she (and others) don’t seem to realize – never mind accept the premises does, indeed, speak volumes about the industry.
    By the way, I have never said “award winning”. I always say “better, more listenable and more influential”.
    Roy Williams, meanwhile, takes such sophisticated positions on these matters that, I submit, they tend to fly over the heads of most practitioners. So much so that very few put his wisdom into practice. Good for his business. Radio’s loss.

  6. Sales at my place have always been good. We treat radio as a primary medium and make proposals that seek an advertiser’s entire budget. We don’t always get it right away, but, over time, we many times succeed. If we sought to make all ads award-winning, we would be ignoring the clients. The ads are written to get the clients’ desired results. If they don’t please Robinson or Wayne Ens we don’t care. The man/woman who pay for them are happy.

    Seems to me that radio, with it’s “flat” sales curve of late, needs more ads on-air, not fewer, Wayne. And don’t give me the “create ‘better’ ads and charge more for them to have fewer ads and more revenue” crap. If you think that’s possible in markets where bottom-feeders abound, you’ve never carried a list and made calls. More ads work better than fewer ads. The real consultants like Roy Williams know this and spend little time debating the issue with these lightweights whose blogs appear oh-too-frequently here.

  7. I guess the “same ol’-same ol'” is not only the benchmark, but the default, locked-down position for many in the non-discussion of non-improvements for broadcast advertising.
    Refusing to research and make inquiries into these elements may have something to do with radio’s inability to break the “seven-percent-of-available-revenue” boundary.
    Perhaps these discussions aren’t happening because so few are informed enough to participate.
    The crime, meanwhile, may be less about being informed, and more about the legions of the unwilling who refuse to even make the attempt.

  8. The topic of “too many ads” always brings on a fight between programming people who think a heavy spot load turns off listeners and sales staff who want high billing and few limits on their inventory.
    I don’t think ads were ever intended to be entertaining, at least not by those who buy them and demand ROI. “Entertaining” ads seem to be desired most by programming people who think that makes ads more “tolerable.” As if an advertising company needed “tolerable” inventory.
    On TV, the Super Bowl ad inventory is usually sold out and people marvel about how “entertaining” the TV ads are. Have you noticed, however, that those Super Bowl ads are rarely ever seen again, even by advertisers who buy time afterwards, but with different, more conventional, copy?
    And have you noticed that many of the Super Bowl advertisers are not seen on the games in subsequent years? (Low renewal rates). Maybe the “entertaining” ads didn’t work so good.

    Oh, and the heavy TV spot load didn’t seem to hurt the audience numbers. (Too many ads?)

    Notice Mr. Ens works for TV and billboard companies besides radio, so he can’t be considered a real radio advertising trainer or advocate. He champions those who pay him, like the rest of us.

  9. Robinson, who also dodges the questions because he can’t answer outside of his own small opinion, is another who dislikes radio ads. Nothing quite “measures up”. Notice how he, Robinson, determines who should be involved in discussing it.
    Sometimes we have to tolerate those who voice and write the ads, but we don’t need to allow them to sit at the table of management. They can just remain in their suspended state of “what-if?” It’s an elevated state, allowing them to look down on the rest of us while doing no real harm.

  10. Anybody who has difficulty with the concepts of “too many” commercials and “annoying” commercials has just disqualified themselves from participating in any reality-based discussion of radio’s presentation.

  11. Wayne,

    Please define “too many” commercials.

    Please define “annoying” commercials.

    Your position is 100% subjective and supported by nothing but your thinly-veiled dislike for ads.
    And you are a sales consultant? I wouldn’t let you near my sales staff.

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