For far too long, the radio industry has been lamenting the loss of revenue. We have seen other platforms – primarily digital – eat our collective lunch for years. Unfortunately, the lament heard all too often is, “We’re waiting for revenue to turn around.”
This feels like Forrest Gump waiting at the bus stop. Radio revenue is not going to turn around unless we make it happen.
If you’ve read this far, you likely believe in the power of radio. The power to entertain. The power to inform. And our power as an advertising medium. What are we doing – collectively and at the market level – to leverage these superpowers to make radio great again?
You are likely meeting with your ever-decreasing staff on a regular basis, trying to figure out how to crack the code on the radio revenue problem.
If you’re not doing this or, worse, you’re still operating under the rules of engagement from twenty years ago, I’ll save you some time and suggest you stop reading this column right now.
Still here? Great. We are looking for collaborators. Industry professionals who believe in the power of our medium and believe our best days are ahead of us, not in our unregulated past.
We have ideas and, perhaps, a few answers. But in no way have we cracked the code – yet. Collectively, however, there are enough smart people in our business who not only believe but have the desire to return radio to its rightful place as an essential advertising medium.
This is not going to happen because of our desire, though that is important. We will do this with facts and data. We will use reality to alter perception.
We have collaborated with some of our clients to create new strategies showing how our stations reach a traditionally overlooked listener demographic by uncovering and shining a light on stories that were getting lost in the weeds.
For example:
When an account executive in a top market approached us with a request from an agency representing a major transportation firm, the ask was ambitious—over 30 reports to demonstrate the strength of our radio audience among public transportation users.
Instead of simply fulfilling the request, our consultant partnered with the sales executive for a strategic planning session to better understand the true needs of the prospect. It quickly became clear that the 30 reports requested wouldn’t provide the actionable insights needed to position our station effectively in the media buy.
Leveraging deep market knowledge and audience analytics, the consultant recommended a more focused approach. Rather than volume, the team delivered two targeted qualitative ranker reports that clearly illustrated our station’s relevance and reach among public transit users—exactly what the prospect needed to see.
The result? The sales executive secured a win with the transportation client, one that had historically excluded our stations from their buys. By leading with strategy over quantity, we not only saved time but also delivered real results.
Who else wants to take the bold step forward? Who else believes in radio and is willing to effect real change? Let’s get the conversation started. Reach out to our marketing coordinator, Bethany Barsoian, at 410-295-6619 x36 or by email.
(In case you thought the title of the column sounded familiar, it is because it is a quote from Dr. Peter Venkman.)
Yes, training is key. Training our sales department. Training our programmers. Training our talent. Bu we must also train our audience to use radio more. As an industry, we’ve let others steal our listeners. Radio has to do a better job at compelling content. In small towns all over the country we have Classic Hits, Classic Rock, Classic Country… Classic Safe and budget friendly! Then we have syndicated air personalities…arrggh! What’s left? Commercials. Spots. It’s the one thing left small market radio can control. Sales staffs can get real creative with the campaigns they create-make commercials people can’t wait to hear! Steal…I mean, get inspired by the creativity found on the Radio Mercury Awards web sites. Local business owners can become celebrities with the proper guidance. Our New Mexico Broadcasters Association announced their award winners for best commercials this past Friday (shameless plug, we won for best :30 spot). This and all the other Broadcasters Associations are great places to find new fun ideas. Radio has a lot of work ahead. We can recapture our audience, and our status. It does start with training. Let’s start training our audience again by giving them something worth listening, including a stop set!
Right on, Darryl–and congrats on the BEST :30 spot!
High quality commercials drive revenue like nothing else out there. When you say local business owners can become “celebrities,” you make SUCH a great point. Radio can–and has–made that happen more times that we can count.
Quick example:
Motel Six was a struggling motel chain based in California and expanded into a couple other adjacent states years ago and could not seem to fill up their rooms. They over built and depended on highway billboards to promote their business and it wasn’t filling up their rooms and they were in a trickly position with bills to pay and not enough revenue coming in. Then, competitors started to build motels and it was hard to “break through” and stand out as the best choice among motels. Billboards weren’t cutting it and TV was too expensive.
The Richards Group in Dallas had a creative director (David Fowler) who had had an idea to use Tom Bodett to voice some simple, straightforward value proposition radio commercials for the chain to use to reach people traveling IN THEIR CAR who would eventually need a motel. Tom ad libbed the “We’ll leave the light on for you” line in one of the takes and it became their signature branding phrase in every commercial after that.
Motel 6 did pretty well after that. The commercials made Tom Bodett a household name and people responded to the message on a level that blew all expectations away. Motel 6 built or bought over 1,000 more hotels over the years and rapidly expanded into 49 stations and Canada.
Radio took a regional brand and grew it across the ENTIRE United States to become the largest motel operator in the ENTIRE INDUSTRY.
Does a high quality radio commercial work? You bet it does.
Is your work important, Darryl? YOU BET IT IS!
Keep turning out those high quality spots! They’re transforming businesses out there and opening doors of opportunity so wide…that they can’t even be quantified.
Steve,
The title of your thought provoking article sums up the state of radio today. (Thank you!)
While radio remains a relevant and important part of the daily routine of nearly every person in the Unite States, the way this incredibly powerful connection is marketed has become stale and ineffective. That’s putting it politely.
The anemic, sporadic and sometimes nonexistent revenue growth that has plagued the industry in recent decades is a direct reflection of the effectiveness of the process in place to sell it—and the people in charge of that process.
Your revenue pacing report is your report card and if it’s not continuously going up each quarter, there’s a problem. It’s that simple. You’re either growing overall radio revenue, or you’re failing. There’s no rational way to spin this and while general managers and sales managers love to recite all the “down” categories to explain their revenue misses, they never seem to mention the “up” categories. Revenue shortfalls mean that you have a problem with your sales process, your people, or both. It’s pretty simple.
The question is “Why is this happening?” Why is radio, after a stellar 100 year run as being an inseparable part of American life, not being taken seriously as a primary advertising weapon on the battlefield for market share?
In my opinion, it’s because radio stations were originally managed by some folks who barely finished high school. They did the best they could, but these small businesses were not models of sophistication and efficiency. They were recipients of an endless line of advertisers who handed over their money gladly each day, because they only had one other choice for mass reach: Newspapers.
The phone rang. Orders were taken. End of story.
When TV showed up, radio split the mass reach monopoly 3 ways with Newspapers and TV and the phones kept ringing and the orders kept coming in and many local radio station owners grew very, very, very, very wealthy in spite of how the stations were managed.
In 1996, regulation changes suddenly allowed some ambitious folks to own a bunch of radio stations. While that sounds like a great idea, what would you expect to happen when you raised the revenue expectations for hundreds of GM’s and sales managers whose only “sales process” was to answer the phone?
Fast forward to today: What can the radio industry expect to happen when it is led by GMs who were never formally trained to effectively lead every department inside a station, sales managers who were never trained to mold, equip and empower their sales staff and sales people who roam the streets not entirely sure of what to say or do each day to generate revenue. Who is leading from the front today? Who is leading by example today and taking the unmatched power of radio to decision makers and monetizing radio’s 15 different platforms to their fullest potential?
CRICKETS…
It seems like a bunch of people waiting for someone else to do it. What happens when no one takes responsibility? Nothing.
I’ll just say it. The machine has clearly broken down. No one is “winning” today.
Radio groups have fired a bunch of people, replaced CEO’s, reshuffled middle managers, declared bankruptcy and left a long trail of red ink in their quarterly earnings reports. Name one radio CEO just crushing it today and blazing a trail of success on all fronts and delivering steadily growing revenue and profitable quarters one after another. The industry’s “Best and Brightest” have not been able to deliver consistent success. Is it because radio has no value, or is it because the way radio’s value is explained is not resonating with today’s more sophisticated decision makers who have LOTS OF more choices today? I think it’s the latter.
The industry lacks a sound process for every facet of it’s business. Programmers can’t make each hour sound its best because of archaic traditions about running a billion units per hour. Sales people can’t get reasonable rates to sell because of an archaic obsession with high rates. The listeners are turned off. The advertisers are turned off. That’s a problem.
That’s what failure looks like.
It’s time to demolish the old structure, come up with a brilliant new design for programming and sales and then BUILD it. We don’t smoke cigarettes on airplanes anymore. We don’t let 8 year-olds work in factories anymore. Some ideas are just bad ideas. They just need to go.
Spotify re-wrote the playbook for Audio entertainment are showing the world how to attract more listeners, then turn that into more and more and more revenue. In other words, it can be done. Fewer commercials and more listeners generated over a BILLION in profit in 2024 for Spotify. How many of the largest radio companies in the US made a single dollar of profit 2024? (Before you say they have subscription fee business model, THE VAST MAJORITY of their listeners use Spotify for free and listen to their commercials as a result.)
I took Fred Turner, who was Chairman of the Board of a little company called McDonalds, out to dinner a few years ago. He spent 50 years with McDonalds and started by flipping burgers at the first franchised McDonalds in history…then helped them add 34,000 more locations in a stunning, legendary five decade career. I asked Fred how he managed to add so many locations, which had never been done before without collapsing. He attributed this success to Training. He should know. He wrote the training manual. He also developed Hamburger University, which trains every single owner and manager in the world to properly operate a McDonalds.
Do you see where I’m going? Is there a lesson here for radio? Did you know Facebook and Google train their sellers and managers like they were going on a 6 month space mission? Are you aware of how much money this has generated for these companies since then? Just the PROFIT exceeded $160 BILLION last year for these two companies combined. Do you still think quality training is irrelevant?
Radio Ink gives radio people free access to brilliant people every day with brilliant ideas that could make an immediate impact. However, the radio industry (generally) has no practical mechanism in place to capture these brilliant ideas, put them into action and reap the benefits. It’s an industry largely run by people doing their best, but winging it each day and hoping it all works out. You tell me. Is it working out?
It’s time to stop, take a breath and admit that it’s not working for the listeners or the advertisers , then start revaluating how everything is done. That’s what world class companies do every day. They come up with a list of Best Practices for everything they do, then constantly improve them whenever they come up with a better way.
Thanks for starting the conversation, Steve. This one could not be more important.
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