Don’t Ask. Don’t Tell. Don’t Buy.

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Recently, the chairman of the Federal Communications Commission “clarified” that body’s latest dictate requiring a “non-discrimination disclaimer” be included on all broadcast advertising contracts. Chairman Julius Genechowski, displaying a level of naivete possible only by a government bureaucrat, expressed his belief that a station would routinely decline a schedule that even hinted at any discrimination bias.

Mr. Genechowski unfortunately conflates the rights of buyer and seller. Sellers, by law, are prohibited from discriminating. Buyers are not.

A Radio station cannot refuse an advertising schedule for reasons of race, ethnicity, sex, age, and all the rest covered under federal law. But under the FCC’s reasoning, an advertiser would be required to buy ad time on ALL stations in a market if the advertiser’s desire is to exclude certain ethnic groups. So let’s think about this for a moment. If you are a seller of western-style clothing and your research indicates listeners to country music stations are most likely to purchase your pointy-toed boots, you can no longer buy time on just the two country stations in town. No, now you must also buy the Hispanic and urban stations, even though no one in their audiences has ever stepped into your store, or is likely to regardless of how much you spend on the minority stations. And if you’re the country stations, you’ll be required to refuse the schedule if you learn the western store is not buying the other stations.

The bottom line is that the FCC is dictating a requirement that is unenforceable. Radio stations cannot dictate to advertisers where to spend their money (they’ve been trying to do that for 70 years without result). Under our society, a buyer has the freedom to invest his money wherever he wants. Placing the burden on stations to police an advertiser’s buying decisions is not only a P.C. bridge too far, it is jeopardizing the license of the station via the actions of a third party that is beyond the licensee’s control.

Instead of the stated goal of eliminating discrimination, the FCC has established a new frontier for “Don’t Ask. Don’t Tell.” Stations will include the mandated disclaimer, and won’t probe an advertiser’s intent. Client’s won’t tell the station about their other media buys.

And, if the commission persists in its folly, advertisers will exercise their ultimate option when it comes to purchasing Radio time: “Don’t Buy.” At a time when Radio is struggling to recover from government’s profligate spending and a depressed economy, the FCC’s timing is impeccable. And senseless.

No Tacos Tonight

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It’s Friday night and you’ve got dinner plans. You’ve been looking forward to enjoying the delicious tacos at your favorite Mexican restaurant. The food is so good that you went there Monday night and now it’s time for another visit.

Oh, sorry! You can’t go to your favorite Mexican eatery. The federal government has a regulation that requires you to evenly distribute your restaurant choices among all available ethnicities. Since you’ve already been to a Mexican restaurant, you must select from Greek, Italian, Chinese, or one of the other styles available.

If you’re licensed by the Federal Communications Commission, this scenario is not quite the joke it appears to be. New guidelines from the FCC require stations to include a disclaimer on proposals to advertisers reminding them that discrimination in the purchase of airtime is illegal. This tactic is designed to prevent agencies from enforcing advertiser dictates for certain formats. No more should advertisers be able to say “No Hispanic” or “No Urban”. If you want to advertise, you have to advertise to everybody.

Of course, this flies in the face of the concept of targeted marketing and practices that have worked well for hundreds of thousands of advertisers for over 50 years. Managing several country music stations over my career, I was frequently faced with “No Country” dictates. While I thought the advertisers were short-sighted in taking that choice, we didn’t try to force the advertiser to buy our station. Of course, we weren’t the federal government. But even if we were, that approach would have been wrong. And it is wrong today.

In a free society, an advertiser — or a dining patron — should be free to choose where he spends his money. Forcing an advertiser to buy all the stations in a market without regard to format or target audience is typical bureaucratic thinking. It is not part of the fabric of American life, and hopefully common sense will prevail.

So enjoy your choice of restaurant — for the moment. We haven’t as yet progressed to the point where government is telling you where you can eat. But looking at this FCC mandate, one wonders if your favorite tacos might soon be on someones regulatory list.

Radio — Fear No Evil

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In Greek mythology, the first female — Pandora — was given a box (actually a jar) she was told not to open. Of course, she failed to heed the warning and opened the box…allowing all the evils inside to escape and plague the inhabitants of the earth.

As of late, the internet web site Pandora is being touted as Radio’s evil — the threat being that the streaming music service provided by Pandora will result in the demise of traditional Radio.

It could happen, if Pandora could somehow manage to

  • Provide local news content
  • Update listeners on local weather
  • Furnish local emergency information during floods, tornadoes, blizzards, earthquakes, and other natural disasters
  • Participate in local events such as fund drives and other public service events
  • Have local personalities appear at community events to interact with listeners
  • Have local personalities, period

The key word in each of the above: local.

I first found Pandora a couple of years ago, apparently shortly after the service was inaugurated. While I enjoyed the uninterrupted music, the lack of personality — of fun — made the service little more than a jukebox. After a few months, I stopped listening, choosing instead to avail myself of my own extensive music library on my computer’s hard drive. My custom-programmed jukebox was a better choice for me than Pandora’s semi-custom jukebox.

Is there a place for Pandora? Certainly. With the projected increase in in-car audio streaming, Pandora will certainly be a major competitor for Radio.

But will Pandora cause Radio’s demise? No. Hopefully, it will cause Radio to start doing a better job in the areas I outlined above.

When it comes to local content, Radio is king. Pandora will find a long, difficult road ahead in trying to approach the throne.

Selling Without Numbers

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When station revenues begin to decline, management quite sensibly looks to reduce expenses. One obvious example of red ink on the P&L is the monthly payment to Arbitron (or whatever ratings service your station employs). While it’s tempting to not renew the ratings contract and pocket the savings, most sales people shudder at the thought of selling without “numbers”.

In major markets having access to ratings information is vital. But in smaller markets, where local direct is king, the numbers are less important. Experience shows that less scrupulous stations frequently compensate for bad ratings by distorting the numbers. This adds to the clients’ general confusion and distrust of ratings in general. Who do you trust when every station is claiming “we’re number one!”?

At least one market manager decided to try a different approach. Taking the bold step of not renewing his ratings contract, he took the rather substantial sum he saved and applied it to persuading clients to make year-long commitments to his stations. When key major advertisers were offered an all-expense-paid two week vacation for two in Hawaii in return for a year’s contract with the station, the result was a 37% increase in station revenue.

Advertisers are people, too. They respond to personal inducement just as would anyone else. The money freed up by dropping your ratings service can be multiplied via innovative approaches into more profit for your stations. Once sales people see the potential, the question of selling without numbers becomes less important. That’s because sales reps are people, too. And they always love making more sales.

Goodbye 2010

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It has been another long year of discontent on the economic front and Radio, to my disappointment, has yet to recover along with the rest of the country.

With two years to encourage renewed economic growth, the current administration has been able to barely make the needle quiver. While Radio station operation is a far cry from managing the fate of any nation — let alone the United States — any manager with a modicum of effort can effect a turnaround of an ailing station within two years. Yet here we are, two years after the arrival of “change”, mired in near-10% unemployment, with no sign of any improvement on the horizon.

Instead of taking steps to boost employment and encourage the growth of business, the government has taken almost every step possible to slow the economy. Uncertainty on taxes (then extending the current rates for only two years), new regulations that serve to restrict bank loans, extending unfunded jobless benefits (for which businesses bear the burden), and talk of increasing the minimum wage to $9.50 an hour — a definite job-killer.

It will require a truly pro-business administration and congress to get the country back on track to prosperity. And I don’t see that happening until possibly 2013, or beyond.

So, goodbye 2010. You’ve been a lackluster year, and I hope you won’t be joined by 2011 and 2012. But I wouldn’t bet my Radio station on it.

Penny Wise, Customer Foolish

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Owners and managers of most commercial operations do everything they can to attract and hold loyal customers. These businesses understand that once a customer has been won over, that individual’s repeat business can add to the bottom line for years, even decades to come.

The same is true about Radio. As a multi-station manager, I often spent time with my staff brainstorming new ideas to increase our loyal customer base — both among advertisers and listeners.

Last month, I came across a new concept: a store policy designed to drive customers away.

Fortunately, this policy did not originate from any Radio station. Instead, it came from a well-known, national office supply chain. This was a franchise that was at the top of my “preferred business” list; low prices, convenient location, excellent selection of merchandise. For these reasons, it was my first stop when shopping for a replacement set of headphones for my PC. These days, headphones are encased in molded plastic suitable for guarding gold at Ft. Knox (assuming we have any gold remaining there). It required a sharp utility knife and several minutes work to free the headphones and position them over my ears…only to find them to be the most uncomfortable model I’ve ever worn.

After less than two hours of adjusting, repositioning, and pain, I returned to the store for a refund. It was then I learned there was a 15% “restocking” fee because I had opened the plastic package. I explained that I had to open the package in order to learn that the headphones were unsuitable; wearing the headset while it was still encased in plastic didn’t seem to work. Ah, but a policy is a policy, so I was charged $4 and change for returning an unsatisfactory product.

I found the entire experience unsatisfactory. So, in gaining their $4+ restocking fee, they lost a customer. I now travel slightly farther to a competing store and they get all my office supply business. There I found a better set of headphones (very comfortable!) for less money. And a formerly loyal customer has become a non-customer for my old office supply place.

Are your stations policies driving your customers away? While Radio doesn’t have “restocking” fees (thank God), think about policies that give new advertisers a discount while taking existing customers for granted. There may be other, more subtle ways that Radio discourages repeat business.

My recommendation: review your policies and make improvements where necessary. Your customers (and bottom line) will be better for it.

Sales Blinders

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How much sales training is enough? Personally, I believe a Radio sales rep cannot get enough training. With over 30 years in the business, I was always learning something new…for a while.

Then, after a period of time, I found I was hearing the same training but from different sources. Certainly there were variations on the theme, but overall few new concepts were introduced by the established “experts” in Radio sales training.

It was only when I moved to the world outside Radio that I started being exposed to new and different sales ideas. Suddenly, I was hearing some startling sales techniques, and immediately thought of how they could be applied to Radio sales.

One excellent resource for sales ideas is the field of Multi-Level Marketing (MLM) — otherwise known as network marketing. If there is a more difficult sales field than Radio, it’s MLM. If you haven’t yet, you might want to look into the techniques espoused by MLM experts Tom “Big Al” Schreiter, Todd Falcone, Art Jonak, Kim Klaver, and the terrifically-named Tim Sales. It’s not a perfect fit, but Radio — and your personal sales — can definitely benefit from MLM’s innovative approaches.

For too long, Radio sales training has been limited to the same pool of experts. It’s time to cast off the blinders and look to other fields for ideas on how to sell more Radio in 2011 and beyond.

Tools of the Trade

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Like many–if not most–Radio professionals, I’ve had the good fortune to work for a variety of station owners. Some owners are excellent, and these are the ones that truly understand the business. Often, a future owner starts out as a news reporter or air talent and either work their way up to ownership or inherit family-owned stations. Other owners are not so good, and some — more than I prefer — do serious damage to the Radio profession.

Of the many stations where I have worked, only a very few were truly well-equipped to enable the employees to do their jobs in an expeditious, professional manner. While no owner desires to throw money away, those in the “excellent” category are willing to invest the capital to build an organization of which every employee could be proud.

This is the difference that manifests itself at a live broadcast when one station arrives in a clean, professionally lettered/decorated station van, with wireless microphones, dedicated links to the studio, one or more air talent, a producer, and even the salesperson who sold the broadcast present to coordinate with the client. By contrast, another station arrives with the air talent driving his own personal vehicle, broadcasting the event via his hand-held cell phone or some combination of equipment cobbled together from a foray to the local Radio Shack.

There is much more to this than spending or saving money. Clients can see at a glance which stations care enough to invest in the future — and the future of the advertiser who purchases time on the stations. Employees who care about the owners for whom they work take pride in having the tools of the trade they need to do the job. Salespeople are confident the stations will produce results for clients. Better talent is attracted to successful stations, allowing the owners to build superior staffs.

This all translates into an improved bottom line.  Not in the short term, necessarily, but over time, it is one of the ingredients that builds a good station into a great station.

I only wish more owners could come to realize it.

The Radio Barometer: No Change

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Working in Radio through the recession of the late ’70’s and various minor economic downturns over the decades, a pattern started to emerge.

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.

Nothing to Miss

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Hitting the “scan” button on your car radio these days can bring a deepening level of disappointment. Is it just me, or is there a bland sameness to music stations that have become little more than a jukebox…one song after another with the occasional bland comment thrown in?

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.