Perhaps the biggest reason many in the industry want the FCC to pop open its ownership caps is radio’s inability to compete for ad dollars with Google and Facebook. They argue that the current ownership rules are antiquated, the media landscape is vastly different, and the big digital players are unregulated. While iHeartMedia did not sign on to the NAB-backed plan for additional deregulation, they do have a plan to go after the advertising revenue now being taken by Google and Facebook.
There are 7 million small businesses looking for customers. Every successful General Manager, Sales Manager, and Account Executive knows that not every small local business in every market can become a radio advertiser. Sales Managers must determine the time an AE spends on an account with a $200 budget compared to a client with a budget of $5,000. In every market in America that decision has to be made many times. It becomes a question of time for the sellers and economics for the stations.
That’s where Google and Facebook came to the rescue. The two big digital monsters automated ad buying, made it easy for the small business owner, and did it without having to pay a salesperson.
iHeartMedia hopes a new product they’ve developed, that’s now in Beta, will bring many of those smaller businesses now using Google and Facebook, over to radio.
The product is called AdBuilder. It’s an automated self-serve advertising product. AdBuilder creates customized audio ads for advertisers based on information the advertiser shares about their business. According to CEO Bob Pittman, once the advertiser listens to their professionally written and recorded ad, approves it, and decides on a budget and start date, AdBuilder’s automated process creates a media plan that sends the ads to the right people at the right time.
Pittman says AdBuilder represents a long-term opportunity to capture the long-tail small business advertiser that has historically been unavailable because of the economics of using a live salesperson. “We expect the adoption period to be gradual, over the next three to five years, before it begins to reach critical mass.”
Pittman says this will allow iHeart to efficiently begin to address the 7 million small businesses that are uneconomic for salespeople to call on, “instead of just the 60,000 clients we reach today.”