Happy 2010!

Phil Bernstein is a blogger in Portland, Oregon. He's also an account manager with Portland's Clear Channel radio stations. And he writes about advertising. He's on Twitter, LinkedIn and Facebook, too.

Writing about marketing so that his customers can see his thinking differentiates him from virtually every other radio sales person out there.

This is the kind of person that is the future of radio - forward thinking and ready to tackle the marketing of his customers businesses with some marketing of himself. Hats off to Phil!

http://philbernstein.wordpress.com/

Ratings, Radio, Sales - The Debate Goes On

Chuck Francis, VP New Media at RemergeMedia.com, wrote a well-received article in Radio Business Report recently called "A New Day for Radio."

Chuck makes the valid point that, in truth, ratings don't matter, except to "...those that provide ratings." However, this common-sense statement misses the mark. Yes, it's not the ratings that matter to the listener or the advertiser. It's the thing that the ratings represent.

For example, Chuck says:

In the years I spent as a Program Director I cannot recall one single instance where a listener came up to me at an event or a remote and said: “the reason I listen to your station is because your station the number one station.” In fact, even if your station is 13th in the market – I’d argue you’re number one in the minds of the people that listen to you regularly.

One of the reasons that a listener is loyal to a station is because of its reputation among her peers. The listener doesn't look at the ratings and make a rational decision about whether or not to listen to a station because it's #1 in one category or another, but she does decide whether to listen partially based on her peer group's relationship to the station. The ratings are a surrogate for this - they tell us roughly how many and what kind of people are listening to each station. They tell us about the listeners' peer groups.

On the advertiser side, the ratings are a surrogate for a true measure of results. In the absence of a way to directly measure the ability of a station to deliver results for a specific product, the ratings system was developed in an attempt to predict what will happen if you run a spot on a station.

Those stations who achieve success without ratings have found other ways to measure their reputation with their audience and to predict the results their advertisers will have when they run a spot on the station. However, I suspect that these substitutes for ratings remain surrogates of a direct measurement of reputation or results.

TRA, a research firm in New York, is developing a very interesting way to measure results in TV advertising... a methodology which could well be transferred to radio and other media. Instead of measuring how many people are viewing a particular program, TRA measures how many people actually were exposed to a specific ad and how many of those people actually purchased the product being advertised. This is similar in many ways to the work that was done on Arbitron and Nielsen's suspended Project Apollo, but TRA is processing millions of households' viewing data and matching it up against their purchasing data. As this platform matures and is able to capture not only TV viewing but also other forms of media, we will move away from the surrogacy of ratings and towards the direct measurement of the results of radio campaigns.

Of course, it is not likely that this direct measurement of results will be applicable for all advertisers, particularly local retailers. As data is developed inferences will be possible that are much more precise than today's rating system. TRA could syndicate their data in such a way as to provide local decision-makers tools to determine which media selections are best for their businesses.

Direct response radio marketers are measuring this today, for their clients. One particularly sophisticated firm, Strategic Media, has literally written the book on the subject. Through extensive testing and results measurement, they have built very detailed databases of the stations and creative execution that works best for their clients. Perhaps local radio can learn from this and develop similar data for their advertisers to use.

Please share your views on this subject by commenting on this article.

Streaming Audio ROI Spreadsheet

A while back, I wrote a spreadsheet for some simple calculations of the return on investment for streaming audio - like a radio station.

I have made some changes to the spreadsheet to accommodate the new negotiated SoundExchange fees for terrestrial broadcasters who stream.

Here's a link - click on the picture and then you should be able to edit the cells in yellow to see the results of different audience size, spot counts and so on.



It's a work in progress - tell me what you think!

Using a Macintosh in a Radio Station

Chris “Doc” Tarr, Director of Engineering for Entercom in Milwaukee and Madison, WI, wrote an article for RBR today about using Macs in radio stations.

As a business technology consultant for radio stations, I strongly endorse Chris's statement.

The Mac is a terrific computer for a radio station. It is simple for even the most technophobic account exec to use and because it comes pre-installed with a ton of useful software, there's a lot you can do with it out of the box.

For example, with the extremely powerful (and included as part of the OS!) iMovie video editing software, even a neophyte can produce compelling video presentations for your sales department or your website. GarageBand, the Mac's audio editing system, provides many of the features of a much more sophisticated package like ProTools. Thousands of bands have produced professional recordings using GarageBand, right on the Mac. It even has features for creating podcasts - including building the RSS feeds and so on. Very powerful stuff.

For an extra $79, you can get Apple's iWork, a suite of three applications that include a word processor (Pages), spreadsheet (Numbers) and presentation program (Keynote). In many ways, these applications are even more powerful than MS Office - and they are certainly easier to use. There's no doubt that Keynote blows away Powerpoint as a presentation tool. Plus - you can create your presentation in Keynote and then export a perfectly compatible Powerpoint version for your less capable colleagues.

Plus, with the free OpenOffice package for OSX, you can have the complete functionality of Microsoft Office on the Mac without the cost!

I have run a virtual machine on my Mac with copies of Tapscan, Maximi$er, PD Advantage, AudioVAULT and various music scheduling packages - and they worked without a hitch. Of course, the vendors get a little "hinky" when you run on unapproved hardware, but with the right relationship with these folks, you can get them to understand.

Imagine being able to create a Tapscan report and then use it seamlessly in a powerful Mac-based presentation package to create a compelling story for a prospect. Of course, as these applications go more to the web (as Max and Tapscan are starting to now), you will be using the web browser and not a built-in application; but the principle still applies. Even more so, because the Mac will let you dress up those dull-looking web reports with some truly persuasive graphic elements - in a snap.

Back in the day, before Maximi$er, I used a Mac to suck in AID runs (remember those?) and automagically transpose them into compelling graphical presentations for my sales team. Even 20 years ago, it was a very useful tool in a radio station.

Another advantage to using a Mac on the business side of a radio station is, quite frankly, the "cool factor." Many radio station clients are Mac users themselves - ad agencies in particular have been one of the strongest vertical markets for Macintosh for decades. If you walk into a presentation to a group including a creative director, media director and account manager and you plug in your Mac for a Keynote presentation, you will gain immediate "inside" cred. It might be that extra edge that gets you the deal.

Today, the Mac will give you an edge over the competition.

Want to know more? Please leave a comment here.

Monetizing Technology

Alan Mason, a consultant to the radio industry and partner in the GoodRatings consultancy, made an interesting comment in an article today:

Take Twitter on the other hand. It's jumped from nothing to more than five million active consumers in a short period of time. Raise your hand if your station as more than five million people in the cume.
But it's not about Twitter, it's about why consumers use it and how it will help you engage your consumers. That's the important part, the level of relationship you have with your listener us where the money is, not with the technology itself.
If you want to monitize technology you need to get into the technology business. In radio, it's still about how many people listen, and how passionate they are about you, not about whether you twitter or not.

The technological tools that are available today are not going to make you money unless you find a way to tie them to your core business - radio. For example, you're not going to be able to monetize your twitter feed; but, you could use it to drive listeners to your advertisers by using tiny urls and measure the click-through response. Just an idea.

No Free Lunch

An article on Boston.com, the Boston Globe's web presence, today discusses the abandonment of lunch service hours at Locke-Ober, a venerable institution in downtown Boston.

As you scan the article, look for what's missing as associated content.

Figure it out? No? Then, you need some remedial work in marketing 101.

What is missing is ads for lunch options around the neighborhood of Locke-Ober! Now, Boston.com is one of the original newspaper-owned websites and they do a tremendous job with their content. But - if the Globe is going to survive, they need some creative advertising sales efforts.

You can be assured that if you were reading this article on a Google-run site, you would see three our four ads with links to local restaurants.

So - how does this connect to radio? Well, imagine if you had the ability to be airing a local news story on your station about this subject and an ad (with a link that the user could type into their iPhone) appeared on the dial of the radio for a substitute restaurant. This ad simultaneously runs in the audio player for your internet stream, where it's clickable. Plus, a link goes out to Twitter.

Impossible, you say? Not so - it's very do-able today, with technology from companies like Broadcast Electronics and their "The Radio Experience" product line. They call it "Messagecasting" and it can be up and running in a radio station in just a few days.

This is the kind of thinking that all media outlets will need to embrace. Think synergy between your content (whether news stories, music, whatever), your listeners and advertisers. Think of ways to make the advertising accountable. Think of ways to not insult your audience with poor execution.

It is clear that the platform we will see emerge is a hybrid of "broadcast," web-based (I really want to say IP-delivered) and tangible media (as an example, scaled down newspapers). Local media entities will become a synergy of these parts. Each entity will have its own personality ("stationality") focused on it's rather narrowly targeted market. Because of the interaction between the components of the platform, advertising results will become more accountable. The successful local media entities will not be focused on just one or two media types (i.e., written word and video or video and audio) but will cover all media types equally well. Why? Because each one has its advantage for certain users in certain situations.

Want to start your own radio station? For free??

Sounds like a come-on from an email spammer, right? But - it's true. Radio automation, streaming and ad-serving provider Spacial Audio is offering up 50 "radio stations" to radio folks who have been "down-sized" sometime during the past 6 months. They call it the "Radio Bailout." Here's the deal:

1. Every Tuesday between February 3rd and April 7th, five people will be randomly chosen to receive their "radio stations." There will be fifty winners total. The Radio Bailout will end with the final drawing on Tuesday, April 7.
2. Each week's five Bailout recipients will be given an opportunity to build their own internet radio station through the following Spacial Audio software and service:
a) One (1) SAM Broadcaster v4 - (valued at $279.00)
b) One (1) StreamAds Ad Delivery Platform - (valued at $99/month)
c) Free use of one stream from SpacialNet.com, with the ability to serve up to 500 concurrent listeners at 128 kb/s - (valued at $1,150/month)
3. Just go to Spacial Audio's Radio Bailout web page for complete details

And - Spacial Audio will host your stream for up to 5 years!

500 concurrent listeners at 128kbs is a pretty decent sized audience with a quality stream; I wonder if they'll support 1000 at 64kbs?

They are even pitching this to salespeople - after all, a salesperson and some talent could hook up and build their business together.

I've gotta hand it to these folks - this is a terrific idea that will not cost a lot to implement but will both help Spacial get a lot of attention and help 50 radio folks become entrepreneurs. And - internet radio station owners.

The Audacity of Hopes

The well-written and to-the-point article by Jim Hopes, CEO of the Center for Sales Strategies, on the future of traditional media selling provides a cogent analysis and an audacious (in the good way) solution to a seemingly intractable problem in broadcast media sales. Here are a few lines from the article that shifted my thinking:

The first (and biggest) problem with broadcast sales departments is how they’re organized—much more as wholesale businesses than as retail businesses. Think about it:

A wholesale business is one that:
• Sells large quantities of its products to a short list of resellers.
• Deals with third-parties, with proxies and agents, not with the end-user of the product.
• Negotiates price and terms with professional specialist buyers, often defaulting to commodity
pricing levels.
• Sells about the same thing to every customer—a schedule.
• When broadcasters deal with transactional media buyers—national, regional, or local—they are
practicing the media equivalent of wholesale selling.

A retail business, by contrast:
• Sells smaller quantities to a broad range of solution-seeking end-users.
• Learns the end-user’s needs and problems and takes responsibility for finding or developing
solutions.
• Solutions are tailored. No two look alike.
• Establishes consistent pricing for all customers, negotiating only on selected high-ticket items.
• When broadcasters deal directly with the end-user advertiser—whether there’s an agencyinvolved or not—chances are their entire approach is more like retail selling.

My experience both as a broadcast salesperson and as a provider of services to broadcast sales departments has told me this - but I hadn't put the concept into such a compelling argument.

Jim does.

Jim goes on to discuss solutions to the dichotomy of having a wholesale business with a retail customer base - I recommend that you read it carefully. You can find it here.

My contribution to this discussion is that - in many cases - this dichotomy exists not only in sales departments at radio stations, but also in the minds of salespeople. There are thousands of radio salespeople out there that know in their gut that the local media sales business is truly a retail business, yet they are forced by culture and compensation plans into selling like a wholesaler or they try to sell like a retailer to wholesale customers. These are the salespeople that you want on your team. They are probably the ones that are most likely to have the "right stuff" to succeed in this environment. And - based on my reports from the trade press, the people who remain at Clear Channel are the strong "wholesalers." The "retailers" are on the street.

Hire one or two and you'll get an immediate return on investment.