Somehow, local retailers managed to sense a slowdown in business long before it revealed itself in national statistics.

They responded to their perceptions by cutting back on their advertising budgets. Our stations always saw a drop in overall revenue several months before the recession became apparent to everyone else.

The reverse was also true. After a time, while the media was still moaning about the slow economy, local retailers began increasing their ad budgets. Our stations’ revenues increased. And, a couple of months later — ta-dah! — the recession was over.

As a result, it was encouraging this month that some of the major radio groups are beginning to see sales increases of 4 percent or more over the previous year. It’s an indication that the economy is far from dead.

Given the right conditions, the economy’s natural tendency is to grow. In fact, it’s actually difficult to hold it back.

Unfortunately, we are not experiencing the right conditions. Instead of a government that encourages private industry and increased employment, it appears we have an administration that seeks to place more inhibitions, road blocks, burdens, and red tape on employers. The result is a chilling effect on economic growth.

The economy is trying to recover. We’ll keep an eye on our “Radio barometer” to see if the sales increases continue, and if Radio can predict the end — or continuation — of our current recession.

I had the good fortune to grow up during the “golden age” of rock ‘n’ roll, and the stations that served up the great music also served up outstanding personalities. Think of the legends of the business: Larry Lujack, Charlie Tuna, Robert W. Morgan, Ron Lundy, John “Records” Landecker, to name but a few. They were inspirations for an entire host of jocks…some of whom became local personalities in their own right.

As operations manager of a small station in the 70′s, I had the good fortune to work with a staff of air talent that understood being a “personality” didn’t mean talking a lot. It meant thinking about what you were going to say before you said it, planning out your program, and having fun. And fun is what appears to be missing from most stations today.

One caller to that station summed up the essence of good Radio better than anything I could have said: “I can’t turn off the station…I’m afraid I’ll miss something.” That’s the highest compliment a station can receive.

I’m still looking for a station today that evokes that sentiment. All I can seem to find are stations where there’s nothing to miss.

The stations were only selling 31% of their ad time.

I asked if the stations were using a yield management system.

The answer was “no”, because management felt “rate integrity” was important. They thought “yield management” was another way of saying “cut rates”.

Well, rate integrity is important. And so is flexibility. What these station’s management doesn’t realize is that yield management can give you both.

With a well-run yield management system, your station’s rates adjust to the advertiser’s demand. The higher the demand, the higher your rates. If the demand drops, your ad prices drop with it. The goal is to sell more time, have less “wastage”, and increase yield.

So here’s a question for any station that hasn’t considered yield management: Is it better to get something for an ad slot or nothing? Changing 31% sold to 40% or 50% sold can and will make a big difference to your bottom line.

If my friend’s stations see the light, I’ll report the results here. But if they continue on their stubborn path of not considering a good yield management system, they’re missing out on the best of both worlds.

Does that sound stupid to you?

How do you think it sounds to Radio listeners who hear that drivel in an unacceptable number of ads. Every hour. Of every day.

Over and over again.

We’ve covered this topic before, but perhaps a repetition of three or more is required to get the message across.

Ad copywriters need to give serious thought to obtaining a thesaurus and browsing its pages instead of watching American Idol or Dancing With The Stars.

As someone who is no longer involved with Radio on a day-to-day basis, I find I’m listening to Radio as an average listener and not a Radio guy. It makes a world of difference. Suddenly, you’re tuning out the trite phrases and meaningless words that populate far too many ads.

Which means your clients’ messages are not getting through.

Writing with an ear for what the listener actually hears can revolutionize ads on your stations. For example, the next time you’re taking 40 seconds to bang out 30 seconds worth of copy, you might try these substitutions, just for starters:

Exceptional instead of “incredible”. (“Incredible” means “lacking credibility”).

Extraordinary instead of “unbelievable”.

Unusual instead of “fantastic”.

Of course, these words and the sentences that contain them should be delivered in a realistic, adult manner. No screaming or loud music, thank you.

Clients might actually find they get extraordinary results from ads that are written to be listened to and not just to fill space with cliches.

And maybe that just might improve their bottom line.

Yours, too.

In today’s economy — what little of it remains — many stations are on the edge of bankruptcy. Will adding another revenue drain to their burden prove to be fatal? And if Radio stations go silent or switch to news/talk to avoid the performance fees, how does that help the artists sell more of their music?

The symbiotic relationship that has directly benefited artists by making them (in more than a few cases) millionaires has also helped Radio. If artists are to be paid for their music, perhaps Radio stations should be paid for the time required to air the artists’ songs.

Just to be fair about it.

So what does Radio’s “Magic 8-Ball” reveal?

Will Radio survive the economic doldrums that continue to stifle revenues? Yes.

Will some major Radio companies not make the cut? Yes.

Will increased health care expenses force most companies to reduce the number of employees? Yes.

Several years ago, the group for which I managed a cluster of stations provided an extremely generous health care plan. There was no employee contribution; all expenses were covered by the company save a $10 per-visit co-pay.

We saw our health care costs escalate 20% per year, and it was only a matter of time until the company would have no longer been able to absorb the increases. The acquisition of the stations by a large conglomerate resolved that issue (although the quality of the new company’s health care plan was a disappointment to employees).

The new government-mandated health care system will be phased in over the next several years. However, premiums are projected to increase dramatically as insurers are required to accept individuals with preexisting conditions. Since the federal government will cap the amount of premium increases allowed, most insurance companies will likely be squeezed out of business within 2-3 years. The end result will be government-run health care insurance (a.k.a. “single payer”).

Radio’s revenues have suffered greatly over the past two years. Only now are some operators starting to see a reduction of losses…some even are enjoying increases. A Magic 8-Ball is not required to determine that the advent of skyrocketing insurance premiums is a factor that will further hamper Radio’s recovery (as well as most other business).

Will government continue to seize more control over the nation’s private sector? Ask again later.

Those of us in Radio could see it begin back in the late ’70′s. In the early ’90′s, the trend was obvious. Now, as we enter the last year of the 21st Century’s first decade, the monsters are visibly in pain, trying to hold off the inevitable.

So it is that the daily local newspaper prepares to go the way of the dinosaur.

As an enthusiastic Radio sales rep in the ’70′s, I was shocked one day when a client had to cut our meeting short. He said: “I have to get my ad down to the newspaper before two or it won’t get into tomorrow morning’s paper.”

That’s right: the newspaper sales rep was too lazy to come by the advertiser’s business to pick up his ad–the advertiser was forced to deliver it to the paper!

Those days are long gone.

However, it has been the internet, not Radio or television, that has dealt the death blow to the printed page. Back in the day when our stations were battling with the local paper, we ran a promo line at the end of each newscast: “When you hear it, it’s news. When you read it, it’s history.” Now, people Google the news and get what they want when they want it. Newspaper could never keep up with the immediacy of broadcast news. Today the world wide web offers the virtually instant coverage of broadcast but with infinitely more choices. No longer are consumers limited to one newspaper or a handful of Radio or TV stations.

Generations of consumers were trained to depend on newspapers for their information. With the advent of the internet, the generations of the ’90′s have switched to the instant gratification of the web. By the time the local paper is printed and is on the street, it is “old news”. That “newspaper only” generation is dwindling, and with it the legions of readers that once made that media king.

While Radio and TV will survive, it appears newspaper–in printed form–is quickly going the way of T-Rex. Some newspapers may remain on the ‘net, but the mega-bucks of local revenue the printed page once demanded will soon join the hula hoop and 45-RPM record as little more than a fading memory.

But in the middle of the doom and gloom, there are glimmers of hope.

In a few markets, some stations have avoided double-digit declines; a very few have managed to actually increase profits. In virtually every case, these exceptional stations owe their success to…exceptionalism.

Unlike their competitors, these stations have integrated themselves with their community to the point that they are an indispensable part of that community. In many cases, the station’s call letters have become synonymous with the word “Radio”. This level of integration enables these stations to survive when virtually all others falter.

Such a status is not achieved in a few months or a year. It is acquired over decades of service to the community. It is also more than a few superficial promotions or sponsoring a fundraiser here or there. No, this level of achievement requires complete and absolute dedication to the community; providing a superior level of service in all facets of Radio without the expectation of a reward.

So here’s a salute to those rare stations that have come out on top when so many others have suffered. The coming year will hopefully be brighter. But regardless of the ups and downs of the economy in 2010 and beyond, the exceptional Radio stations will continue to enjoy greater success.

Unfortunately, most Radio sales reps can’t or won’t convince the advertiser to air a large enough schedule to obtain truly remarkable results. This underselling of Radio hurts the advertiser, your station, and Radio as an industry.

Many years ago, a very sharp sales rep I worked with — we’ll call him “Jerry” — taught me how to turn down an order.

Turn down an order?!?

The client wanted to air a schedule of 25 ads for the week on our station. While the schedule would have added around a thousand dollars to Jerry’s sales total for the month, Jerry just shook his head.

“I can’t accept this,” he told the client. “Because when it doesn’t work, you’ll blame me.”

Jerry then proceeded to explain to the advertiser how Radio really works, and how in order to be truly successful, the client should be airing 25 ads a day. When the advertiser replied he had never heard of such a thing, Jerry said: “It’s because they’re afraid to tell you.”

For Radio to work–to truly blow the doors off–three things are required:

1. A good product or service at a good price (customers aren’t stupid);
2. A compelling message that breaks through the ad clutter (notice, I did not say a louder message — screaming only insults the customer), and;
3. Sufficient frequency to ensure the audience hears the message.

We’re not talking a “frequency of three”…we’re talking a frequency of 20, 30, 40 impressions in a week.

We’re talking using the power of Radio to dominate a station or group of stations. This requires what used to be called a “newspaper-sized” budget. A full-page ad in the newspaper doesn’t dominate anything. But take the budget for that full-sized ad and place it on one station for the week and the advertiser will own that station.

Jerry’s client was convinced — he ended up buying two ads per hour every hour for a week — and had the best week in his history. All because one Radio professional was willing to tell a client the truth.

It’s time to stop underselling Radio. In the current economic conditions, including the rapid decline of newspaper, it makes more sense than ever before for Radio to step up and claim its unfair share of the ad pie.

The problem is not store closures or empty strip centers. It is confidence and spending.

I think Radio as a whole is fine. The latest RADAR study shows 92% of the population listens weekly.

We just somehow have to get clients back to previous spending levels.

I think Radio will eventually shake out okay. The few group owners that survive will be financially sound with manageable debt. There will be some public companies but mostly with large market holdings. Medium and small markets are not suitable for public ownership. Maybe no Radio is.

A business with a limited market area and limited inventory at some point has to rely only on price. You cannot do that in Radio because of market dynamics. Price cannot go up forever and the Big Radio myth is that if you raise your price advertisers will raise their investment. Most advertisers keep investment the same and run fewer ads driving down results. Then the stations have to find even more advertisers but now the advertisers have to be willing to pay higher prices. This is why Radio stations go through cycles.

So, large companies–especially public–that have a never-ending appetite for more profit will eventually hit a dead end with Radio. Many already have. Even if they grow by expansion–as all of them did in the 90′s–that road will eventually end.

We can add “products” like interactive, but that only takes you so far. It’s also a big time distraction to selling the core.

Radio is far better suited for a local owner who wants to make really good money and knows that every now and then he is going to have a down year. The competitor is going to surge. The unexpected is going to happen. And he will have to learn to live that year on $300,000 instead of $500,000.

A return to sanity can be reached if Radio sales prices are low. Six times multiple; eight times max, with a manageable debt load. The difficult eccentric local owner will replace the difficult eccentric corporate management team and it will be back to the future.

In middle and small markets there will be a return to more things like news and local coverage. Newspapers are dying. There is simply not enough local news in these smaller markets to justify an hour a day on five local TV stations. But there is plenty for a three-minute newscast on the hour via the local Radio station. Like it used to be. The Internet is a factor, but not so much for local news.

The future of the Radio business will be more like the past, albeit with a better eye towards quality. Listenership will decline some as will revenues, but as long as we remain the only really viable commercial advertising source that allows a listener to totally multitask while consuming it, we will have a place.

This fall, I complete 35 years in Radio. I think that qualifies me for an opinion liks this. I am now–officially–the old man.

Although the “experts” still never listen.

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“Anonymous” is a skilled Radio executive with extensive experience in sales, marketing and management in small, medium, and large markets. He started “on the street” selling Radio over 35 years ago and has trained hundreds of Radio salespeople in how to get results for their clients. He currently manages a multi-station cluster for a major broadcast company.