Broadcast radio...how to save it from itself

OK, I admit I am ripping off Mark Ramsey yet again. But it's okay, since he is ripping off Bob Garfield of Advertising Age, the top pub covering the ad biz, and some truly chilling comments he recently made about the various advertising media. He actually uses the word "chaos!"

I like Mark's comments in response to Garfield's observations. He succinctly sums up what broadcasters in the radio game (applies to other media as well) need to do to change their way of thinking...and their way of doing business...before they fly this airplane right into terra firma (my thoughts in red):

1. If the supply of advertising avails online is infinite but the supply of advertising is not, then the only way to avoid having the cost of that advertising driven to zero is to create an environment that attracts advertisers because of its uniqueness. Unique brands, unique advertising concepts. The era of successful me-too brands and "this space available" advertising is over. (This should be made into a poster and hung on the walls of every station or group owner in America!)

2. Radio can move a lot of people to wherever they want to go. We will need to monetize their destinations, whether or not they are "our station's website." (You would be surprised how many people's idea of a station "web site" is pictures of the morning team and some streaming when they feel like it. Few know how to monetize it. I hear, "Yes, we'll throw in a banner ad on the web site...value added." Then they'll spout some useless junk about number of hits. Maybe, if they're really savvy, number of "unique" hits. But they get white around the mouth if I ask them to price response on a per-click basis. And they faint when I try to tell them their over-the-air inventory will eventually be priced based on the number of inquiries they send us. But it will. And soon.)

3. You need to be out of the "radio station" business and into the "local media company" business. Now is a time to recognize the roots of value for your company and to leverage that value. (Yes! Yes! Yes! Radio sales staffs for years have presented themselves as "marketing consultants," so long as whatever solutions they present to the advertiser includes a nice schedule on THEIR over-the-air radio station.)

4. We will need to recognize what makes our audience unique - one listener from the other - not simply what makes them alike. In the future, what makes each listener different is key to her value to advertisers and to your media company. How much each listener lets you know about them is critical to your ability to connect those listeners to marketers that interest them, and vice versa. (At risk of sounding like the guy who voices all those movie trailers: "In a time when advertisers can target potential customers right down to the individual...")

5. You need to embrace all manner of social media as an adjunct to the one thing no social media tool has in your absence: A loudspeaker with hundreds of thousands of willing consumers on the other end.

6. Our obsession with ratings and ratings methodologies is entirely misplaced, thus the importance of ratings per se will invariably decline. When I have lots of ways to reach thousands in my target audience - and most of those ways have precise metrics, not "ratings estimates" - then the number of ears you attract is less important than what you can do with them when you attract them. (I'm a "data guy" and understand the importance of some kind of metrics on which to base marketing, but I could not agree more with this point. Performance. Buyers on the showroom floor. Soda getting placed in shopping carts. My company at least getting Googled. That's what it is all about. Not #1 with left-handed midgets 18-49, 5-6AM, Monday through Wednesday.)

The radio industry needs to either grab a surfboard and take a ride on the tsunami or they will soon find out that they can't hold their breath for nearly as long as they thought.

Don Keith
http://www.n4kc.com/
http://www.donkeith.com/

Massaging oneself

No subliminal titillating message in that title! I continue to be amazed at the attitude of radio broadcasters and their trade publications who continue to please themselves instead of facing reality.

Especially when they tout things like "Radio Touches 234 Million." That was one of the headlines in today's INSIDE RADIO e-newsletter.

Look, I know any publication like INSIDE RADIO that depends on the medium it covers for subscribers cannot always tell it the way it really is. They must search for a kernel of good news among all the bad seed out there. The story that accompanied that headline:

"The latest RADAR report from Arbitron reveals the medium reaches more than 234 million persons (12+) during a typical week. That 92% exposure rate is steady despite growth of MP3 players. The report shows 89% of teens (12-17) also tune-in each week."

Well, whoop-de-damn-doo!

92% of the people in the country were exposed to radio in a typical week. That's based on what we call "cume." That's the data extrapolated from the number of diarykeepers or members of a PPM panel who listened to radio at least once, for at least five minutes, sometime during the period they kept a diary or toted a PPM. A person would have to be dead to not be exposed to at least that tiny sliver of radio. I ate lunch in a Subway today and had no choice but to listen to an urban AC station that played absolutely nothing I wanted to hear for the half-hour I was there, munching on my meatball marinara. I would never deliberately listen to this station. But that lunch entertainment made me one of those 92% who were exposed to radio.

This number comes at a time when the average amount of minutes a typical person spends listening to traditional over-the-air radio is fading faster than George Bush's legacy.

Nothing wrong with looking for a speck of good news. But does that speck blind us to reality at a time when reality is what we really need to face if we are to save this wonderful medium from itself?

Are we simply engaging in media onanism, making ourselves feel good about the way things are going?

Don Keith N4KC

http://www.n4kc.com/

http://www.donkeith.com/

www.twitter.com/don_keith

Social network overload...

Am I the only one who is starting to get a bit bleary-eyed at all the various social networking sites out there? I joined Plaxo and LinkedIn and several more of those business-oriented sites...ending up with accounts at some I never remembered joining and more than two accounts at others. When I get invites, I have to double check to see which account I got invited through or then I have a heck of a time getting the invite accepted. I'm always afraid I'll hurt somebody's feelings if I don't accept, even if I'm not real sure who the person is.

I finally gave in and put up a page on MySpace a couple of years ago, then promptly forgot about it. Frankly, I mostly wanted it there so search engine crawlers would find it and add me to search results. Then everybody told me MySpace was so "Windows 95" and I simply had to create a Facebook profile. A couple of weeks ago, I did that, and have actually had a few folks find me and request everlasting friendship. I have tried to oblige. How devastating is it if I deny someone?

Then, just this week, not just one but several people told me Facebook is over, over, OVER! Gee, it appears that if I join up with one of these sites, I am the kiss of death. A thriving online social network simply cannot stand the Don Keith mojo!

You MUST create a Twitter account, people inform me. So today, I go to Twitter, which seems to be based entirely on "What are you doing right now?" Not seems to be. That is exactly what they say their whole reason for being is: so people can tell other people what they are doing at that moment. Well, first, I am not going to be interested in divulging that information too often. In the spirit of honesty, my first entry was, "Joining yet another social networking website..."

OK, let's see if this one brings me hours of pleasant interaction with other "Twitterers." My user name is don_keith, since some claim-jumper named Don Keith obviously got the word about Twitter before I did. Drop by if you like. Surprise me. I can't see for the life of me the attraction of these kinds of things. Maybe I'm too old and curmudgeonly. Or maybe I just have not entered into these things in the proper spirit.

Of course, it remains to be seen if I even remember my password a few weeks from now.

Don Keith N4KC
http://www.donkeith.com/
http://www.n4kc.com/
www.twitter.com/don_keith
http://www.n4kc.blogspot.com/

(Lord help me!)
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Hither and Yon...

No, Hither and Yon are not a Borscht Belt comedy team. It just means I have not had a chance to post here in a few days -- dang day job! -- and wanted to make a few random observations.

First, I was reading an ad trade pub called BRANDWEEK, and they have an article about how the suddenly very popular sites Facebook and YouTube may be attracting millions of eyeballs, but they are not making the kind of money they should be with that accumulation of potential customers. They simply have not yet figured out how to capitalize on what they have.

Reminds me of when Google first appeared. With that beautifully clean home page -- the goofy logo and a search box -- I could not, for the life of me, figure out how they were going to make money. No banner ads. No cost to search. Are these guys nuts? Never occurred to me that advertisers would pay for positioning on those results pages. Or for clicks on those links. All that little model has done is turn advertising on its ear! See what kind of seer I am?

Related thought: radio and TV are having their own problems capitalizing their new technology. I've spewed at length here about so-called "HD Radio." One side benefit (?) of that technology is the capability of programming another couple of on-air channels. HDTV has the same thing. It makes any radio or TV station equal two or three radio or TV stations.

But none of them--radio or TV--have figured out what to do with all that potential. If you are radio and you program a variation of the format on your main channel (a country station puts "classic country" on one sub-channel and "rock country" on another), don't you just dilute your main channel's audience? Same with TV. You put re-runs on there of syndicated shows like Seinfeld or Jeopardy that you have on your main channel , if the syndicators allow such a thing, and it may just out-pull your 7 o'clock newscast!

And there is the tiny little problem of measuring the audiences on those additional channels. Nobody can do it. Stations are selling a pig in a poke. Or offering it as value-added without being able to verify they have any value whatsoever.

Quick. Tell me. Do the TV or radio stations in your market have any compelling content on their new sub-channels? Did you even know they had sub-channels?

Finally, one amateur radio note. I predicted when the FCC did away with the Morse code requirement for obtaining an amateur radio license, it would actually increase the number of ops who would use the mode. I think it is happening. Recent log submissions for CW contests have broken records for numbers of participants. I hear plenty of activity on the bands.

And who could listen to the CW pileups for K5D on Desecheo Island and declare that Morse is moribund?

73,

Don Keith N4KC
http://www.n4kc.com/
http://www.donkeith.com/

My Sunday paper this morning...

So I mosey down the drive and pick up my Sunday edition of THE BIRMINGHAM NEWS this morning. First thing I notice is how light the package is. If you take out inserts, the thing is really no bigger than the Friday paper used to be...before it shrank.
Then a friend of mine forwarded me the following news story:
The New York Times Co. said Thursday it is suspending its quarterly dividend in a move to preserve cash, as ad spending continues to decline. The suspension of the payout comes after the company slashed its dividend to 6 cents from 23 cents in November.
"The decision provides the company with additional financial flexibility given the uncertain business outlook," says Arthur Sulzberger, Jr., chairman.
That's tough news for the Sulzberger clan, which has been living quite well off the Times' dividend for a long time. And it is a sign that the paper's cash crunch hasn't been eased just because it was able to secure a high-interest loan from Carlos Slim last month.
In January, the Times company, which publishes the NYT, Boston Globe, the International Herald Tribune and 16 other daily newspapers, said its fourth-quarter earnings plunged 48% and online sales fell for the first time. The results still beat analyst estimates. As of last fall, the paper was insisting that it wouldn't lay off any of its 1,300 newsroom employees. But things have only declined since then.
And I read in the trades last week that one major radio company is expecting revenues from advertising to decline 50% this quarter over Q1 last year. 50%!
Much of this is recession-related, of course. And the economy will turn around eventually, even as it gives those of us with tentative plans to retire in the next few years a severe case of heartburn. But there is more going on here. The newspaper-in-print business is D-E-A-D. Traditional over-the-air radio is a step away from life-support with more people than ever simply giving up and turning in their licenses to the FCC.
Does that mean newspapers and radio stations are going away as sources of entertainment and outlets for advertisers. NO! I don't think so. At least, not necessarily so. People still want news, commentary, entertainment, companionship. And who better to give those things to people than newspapers (who have staffs of reporters who can write well and ways to gather news, commentators who people want to read, and sources it would take other media years to develop) and radio stations (who can still develop talent people want to listen to, can put listeners on the air with a flick of a switch, who can still create buzz about a new artist or a new collection of songs [remember when we called them "albums?"] by an artist)?
But will they adapt. That IS the question. Here are ten predictions about the future of over-the-air, terrestrial radio from the oft-quoted Mark Ramsey:

1. Radio will recognize that to be more attractive than other sound-alike alternatives - to retain more of its existing audience – it must count on more than habit, convenience, familiarity, ease of use, and the often-proclaimed almost-universal reach of the medium, since all those advantages are transitory.

2. The advantage of "local" will diminish in direct proportion to the disappearance of local content on stations - and here I'm talking about the local content between the songs.

3. The formats which rise will be the ones catering specifically to audiences who are less tech savvy or the old dogs who don’t wish to be taught new tricks. Look for Spanish language radio to be the big winner here along with anything targeting aging Boomers.

4. Ratings will decline in importance as advertisers make decisions based on accountability and results rather than on how many ears a station reaches. As more dollars that would have gone to radio head to destinations outside Arbitron's sphere, stations will cancel their Arbitron deals and never look back.

5. FM stations will move in one of two ways: Either stripped of anything but music (low-cost proposition) or stripped of music and focused all Talk or other non-music entertainment (high-value proposition). Radio will function more like movies: Cheap Indies with low costs and lower profit dollars (but higher margins) and expensive blockbusters with high costs and higher profit dollars (and lower margins).

6. There will be a renaissance in national non-music programming, assuming somebody somewhere in or out of radio bothers to look for it and take a chance on it (Jerry Bruckheimer, where are you?). When these shows are launched, they will launch across dozens of stations at once, not be introduced organically one station at a time. The organic approach to talk show growth is over. Success will depend on mass exposure and mass audiences. Introducing a new show in 100 markets at once multiplies the impact that show has in a world where listeners are no longer bound by their Metro Survey Area. NBC will not be launching the new Jay Leno show one market at a time, and neither should you. Further, Non-Music Radio will not be limited to "Talk" exclusively, let alone Conservative Political Talk.

7. Stations will look to their digital strategies for their bread and butter. Broadcasters who can't keep pace with digital opportunities will be out on the street. The tower will become the marketing tool for the digital strategies, not vice versa. Digital dollars will exceed over-the-air dollars in part because there will no longer be such a thing as dollars which are only "over-the-air."

8. Power will flow to the talent and to the owners of that talent's distribution. No longer will we expect a talent to do three or four hours, five days a week. We’ll see shorter, less frequent content – repeated more often. And we'll see more flavors of content stretched across more distribution channels.

9. Much of the non-music content on TV will be simulcast on radio, thus extending the distribution for TV content at a comparatively low cost and reframing many stations as distribution channels for TV - without pictures. CNN, FOX, MSNBC, E!....It will all be on a radio station near you.

10. Stations will recognize that their primary value is in their audiences - each one with a name, an email address, and specific wants, needs, and behaviors - all of which can be noted and tracked (within the constraints of privacy concerns) such that radio can treat listeners as individuals rather than faceless, nameless "cume." This way, stations will connect the right listeners with the right marketers and provide value that vastly exceeds anything radio has ever provided before and anything Google or Facebook can match on a local level.

While I might take issue with minor points above, I totally agree with the mass of what Mark is saying. Someone could do a similar top ten list for newspapers and a few other traditional media.
Trouble is, I don't think anybody who is in a position to heed all these dire warnings is paying any attention.
My trips down the driveway to pick up the paper will dwindle. I suppose I'll have to get my exercise elsewhere.

Don N4KC
http://www.donkeith.com/
http://www.n4kc.com/

Guess what I have, Granny!

I was too young to notice, but they tell me the invention of the transistor radio was quite earthshaking. For the first time, radios were un-tethered from power mains and auto dashboards. Pocket-sized devices could pull in signals just as good as the big upright chunk of furniture in your grandma's parlor. You could take the darn thing anywhere -- the park, the beach, anywhere you went. OK, the tinny, little speaker was not the best and if you spent the whole day at the beach, you had to take a supply of batteries. But you had freedom and you could hear Elvis on the radio, no matter where you were!

Imagine if you could tell your granny what you have now.

"Gram, I have this thing on my hip (or in my purse) that allows me to talk to people anywhere in the world instantly. I can send pictures, too. Heck, I can even take pictures with it. And make movies. And tie in to my computer. It even gets radio stations, like your old transistor radio, plus tons of other 'stations' that aren't even on the air. I can send text messages to my friends and reply to email. I can surf the web. And a lot more, too."

Of course, you could also tell Granny that more than 64,000,000 people in the US now subscribe to so-called Smartphones. That was the total in June 2008, an increase of 80% over June 2007, according to an article on the Emarketer web site.

As that growth continues, the Smartphone will soon reach the ubiquity of the broadcast radio receiver. It already has in some parts of the world (Asia). Your granny probably does not care, but anyone in advertising or broadcasting certainly should.

The way that advertisers interact with their customers is changing at breathtaking speed. Those who do not adjust and adapt may well be left on the front porch, rocking, watching the world pass them by.

Don Keith N4KC

A billion dollars here, a billion dollars there...

...and pretty soon, you are talking about a lot of money. I paraphrase (and update for inflation) the famous quote from Senator Everett Dirksen in the 1950s. I typically avoid politics on this blog, partly because that was not the real subject area for which I started it, and partly because I need to keep my blood pressure under control.

However, the current "stimulus" legislation has me free-basing Accupril.

Look, I know we probably need some stimulation for an ailing economy. And I know we need some kind of symbolic gesture that convinces the American public that something positive is being done so they will get off their wallets and spend some money again. But the current measure has become a true monster--one that would not pass the rabbi's kosher inspection because there is definitely some pork in there.

Look at the comments of a very shrewd observer, the actor and political commentator Ben Stein:

Eight hours of debate in the House of Representatives to pass a bill spending $820 billion -- or roughly $102 billion per hour of debate. Only 10 percent of the 'stimulus' [is] to be spent on 2009. Close to half goes to entities that sponsor or employ (or both) members of the Service Employees International Union, federal, state, and municipal employee unions or other Democrat-controlled unions. This bill is sent to Congress after President Obama has been in office for seven days. It is 680 pages long. According to my calculations, not one member of Congress read the entire bill before this vote. Obviously, it would have been impossible, given his schedule, for the president to have read the whole thing. For the amount spent, we could have given every unemployed person in the United States roughly $75,000. We could give every person who had lost a job and is now passing through long-term unemployment of six months or longer roughly $300,000. There has been pork-barrel politics since there has been politics, but the scale of this pork is beyond what had ever been imagined before -- and no one can be sure it will actually do much stimulation. ... This is more than pork-barrel -- this is a coup for the constituencies of the party in power and against the idea of a responsible government itself. A bleak day. Unfortunately, it is only the latest in a long series of such days stretching across decades of rule by both parties, to the point where truly responsible government is only a distant echo of our forgotten ancestors.

I wish I could remember who it was that said (200 years ago!): "The downfall of any democracy comes when the people realize they can vote themselves money from the public treasury."

Don Keith N4KC
http://www.donkeith.com/
http://www.n4kc.com/