(By Loyd Ford) Radio was once free to use our frequency and our large audience of highly mobile Americans driving around on their way to make purchases. And we still are.
We sometimes get caught up in other things in our line of vision.
A long time ago TV came. Then satellite, streaming, podcasts and social media. You know the story. Each was supposed to ‘crush radio’ as they came on and none have crushed radio. Each has tempted the ears of listeners and radio has remained productive.
But I am also going to suggest that each of these “new” things represents a different category and great brands in each category will rise among themselves and showcase their value season to season and year to year. Here is the fun part: We’re not competing with these different categories in the traditional sense – they can’t do what we do. Radio does work well with each of these as you already know or will find out in the new year.
We shouldn’t take a back seat to anyone’s business story when potential clients are talking about attracting local customers. However, we are well positioned to add to our story if we take advantage of our own strengths in 2021.
But What About Revenue?
Even more important is the fascination radio has with generating revenue with digital as a more primary driver for the future. Let me say right up front that I am in no way against developing and driving digital dollars. I remain very concerned with the low profit center most of digital has represented to the radio industry because of essentially reselling products belonging to others. Of course, I understand the supposed wisdom of this. It’s where the market is going.
Well, that’s one bet. Here is another one. What if there is a better way to do it effectively?
- Radio should always focus on profit margin to keep growing. Higher profit margins mean life; lower profit margins end in death (especially if you are moving money around). Saying that we can’t increase the profit margin is an excuse to give up.
- Local radio clusters should look for innovation with digital (where you are more likely to control more of the profit margin). Look for opportunities to develop higher profit margins by producing the product yourself. Tie those digital products with the benefits of local radio to overproduce for clients and make your relationships more important to advertisers because of your overall strategy.
- Developing our own digital products will allow you to increase the profit margin and I would go as far as to encourage local clusters to pursue purchasing a local digital agency and running a separate sales team to strengthen the value of your overall assets so you can offer values no one else can match locally.
- Perhaps radio should look at digital in terms of deepening relationships with clients (like you see in the strategy of Bank Of America and other major institutions).
- Radio gets it’s power from being local. Returning to a local focus for both over the air, digital and client focus might be your best New Year’s Resolution ever.
Local radio personalities can play a powerful role in the helping local clusters power up local depth of advertiser opportunity, synergy and powering up social connectivity in a more meaningful way in 2021.
- You should be encouraged to consistently think about revenue potentials in live endorsements, podcasts, social media and appearance revenue strategies.
- Consider passionate lanes like real estate, home improvements, pets or other key areas where you could build additional following and connection in areas that could be highly sellable on YouTube, the stations website, iTunes and other distribution avenues.
- Brainstorm with station management about other areas where you can utilize personality to produce even more revenue opportunities in 2021.
The bottom line is that if you still believe in the power of local radio, the time has arrived to innovate around digital and refine our focus for 2021 around telling our story better and looking for ways to increase the profit margin around digital offerings that make us more unique.
I am saying it: We should think about buying local digital agencies to boost our real digital expertise, local products, profit margin and separate sales effort. That will beat utilizing people who have spent their entire life selling radio and owning your own local digital agency and holding them responsible for propelling their business will help you grow your overall footprint. Even better, you will be the best positioned cluster in the market to synergize digital and radio to become more dominate.
Let’s go give them local connectivity like never before in 2021.
Loyd Ford consults radio stations, coaches personalities, and provides behavioral and strategic programming to radio with RPC. Reach him anytime. 864.448.4169 or [email protected]