Great Expectations

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How do you define success?

For most Radio salespeople, success is making the sale. Closing the deal. Bringing back a nice order. Seeing the sales manager smiling as you turn in the big-ticket, multi-month buy you’ve worked on for weeks.

But what constitutes success for the client? What yardstick does he use to determine if his ad campaign has paid off for him? For most clients, the goal appears to be to “sell a lot”. However, his definition of “a lot” is probably very different from yours.

In order to achieve a goal, that goal must be measurable. This requires a specific number on which everyone can agree is reasonable and achievable. It means setting the client’s expectations to a realistic level rather than “a lot”.

So, how do you develop a goal for your client’s ad campaign that measures the success of your stations’ efforts to deliver customers to his store? Whoa…this is a scary concept!

“Do you mean to say the client should expect a specific number of our listeners to shop his store based exclusively on the ads our stations air?”

Yes, that’s exactly what I’m saying.

If your station reaches 100,000 people each week (cumulative audience or cume), how many of them need to go to the advertiser’s business for him to sell enough products so that he makes back all the money he invested with your station, plus a reasonable profit?

To answer that question, we need some information about the proposed ad schedule and the advertiser’s business, specifically:

  • The total amount of the advertising investment on your station(s)
  • The return on investment (ROI) desired by the advertiser, expressed as a percentage
  • The advertiser’s profit margin, as a percentage
  • The amount of the average sale
  • The advertiser’s closing ratio (out of 10 customers visiting his store, what percentage does he sell?)

Armed with these facts, we can determine exactly how many of our 100,000 listeners must respond to the advertiser’s ad message in order for him to recover his ad budget plus a reasonable profit.

If this sounds like a lot of work, it really isn’t. That’s because Radio3K.com has a nifty free tool called the Radio Return on Investment Calculator that takes the above information and instantly gives you the answers.

In our scenario above, our hypothetical advertiser has an ad budget of $3,200, would like a 20% return on his ad investment, has a 40% profit margin, an average sale of $985, and closes 19% of the customers who come to his store. Based on this information, your station only has to deliver 51 people out of your cume of 100,000! That’s one person for every 1,960 listeners.

Your question to the advertiser: “When our 100,000 listeners hear your ad message, do you feel that 51 of them will find it compelling enough to respond by coming to your store?”

Suddenly, the burden to deliver is no longer on your station. The strength of the advertiser’s message is the determining factor for the success or failure of the ad campaign. Also, the advertiser is no longer expecting “a lot” of response…he only needs 51 people to come in so he can close 19% of them, giving him 10 sales, and all his money back plus 20% profit.

Managing the advertiser’s expectations via return on investment is smart selling. Try it!

Thinking Ourselves into Trouble

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The numbers don’t lie: Radio revenue is taking a nosedive. The economy — sluggish at best in 2008 — looks dismal for 2009. More layoffs are ahead as Chrysler and GM reorganize and downsize, with the ripples of their ordeal affecting thousands of suppliers and hundreds of thousands of workers.

And yet…

As unemployment approaches 10%, 90% of the workforce remains employed.

As tens of thousands are laid off, hundreds of millions are still earning a weekly paycheck.

As the stock market struggles to climb above 8-thousand, millions in profits continue to be made.

So, how much of our economic woes is the result of real, tangible actions, and how much is a product of negative thinking?

The recession/economic downturn of the late ’70’s hit the U.S. hard. We experienced double-digit inflation, skyrocketing gas prices, gasoline rationing, and a malaise that suggested the country’s best days were behind us. President Jimmy Carter even informed Americans that our children would experience a lower standard of living in the future and we should get used to it. It was the end of life as we had come to expect it to be. We had become the land of “no more opportunity.”

Then, something remarkable happened.

A new president arrived on the scene with an optimistic outlook. America’s best days were ahead of us. And, sure enough, with a change of attitude more than anything else, the United States entered a period of prosperity that spanned almost 30 years.

Certainly we have economic problems. GM and Chrysler didn’t get into trouble overnight. Their woes are the result of a series of bad management decisions over decades that have brought them to their current condition. But the wonder of this country is that — with a change of direction and an optimistic outlook — things can and will get better. It has happened before. It will happen again.

While the media almost gleefully pounces on the latest bad economic news, remember: people are still buying products, the majority of businesses are still in business (and even making a profit), and the citizens of this country have an irrepressible faith that things will get better. It may take a different president, and it will certainly require more tough decisions, but the spirit that saw us through 233 years of booms and busts, wars and peace, good times and bad, will again reassert itself.

If only we will let it.

Why Do I Hear Better Music in Supermarkets and Restaurants Than I Do on the Radio?

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This is an article from a couple of years ago. While somewhat dated, the points are still valid. Besides, recycling is one of the few ways I can be “green” and still live with myself.


Somewhere on the road to the 21st century, Radio took a wrong turn.

No, it’s worse than that.  Radio slid completely off the road and went into a ditch.  And now, Radio’s wheels are spinning in a futile effort to gain some traction.

Let’s look at the evidence.  In virtually every market across the U.S. Radio’s numbers are down.  Time spent listening, persons using radio, and worst of all, revenue — all down.  Listeners are voting with their fingers by switching to other sources of music entertainment. [And the lousy economy has only sped up the process.]

And when you hear a better selection of music coming from a supermarket or restaurant’s ceiling speakers than you do on any radio station in your market, you know Radio has a problem.

Unintended Consequences

So how did such a great medium get into such a pickle?  A number of factors, including consolidation and technology, have combined to lure Radio astray with the promise of easy and certain success.

As audience measurement efforts increased through the 80’s and 90’s, more companies turned to music research in order to eliminate songs that would drive away listeners in their target audience.  Unfortunately, this tool slowly encroached on and eventually replaced many skilled program and music directors who created station play lists and formats using their instincts combined with research instead of survey numbers exclusively.

Not long after this trend started, the first wave of deregulation arrived, soon followed by a second, even bigger wave.  The large number of independent stations in each marked were soon consolidated into three or four clusters of stations controlled by large corporations.  Driven by pressure from investors, these companies were reluctant to take chances with unproven formats.  The loss of a share point or two meant millions in lost revenue and plunging stock prices.

Experimentation, with a few exceptions, was out.  Research was in.  Research the audience, research the music, and develop a “safe” format formula that attracts listeners and generates revenue without taking any chances.  With the exception of a few morning shows, creativity was also discouraged.  “Safe” music is played, titles are back-announced (or not), and an exciting format becomes — unexciting.  On the street, the word they use is: “boring”.

And, it made sense to corporations to use these same carefully-developed formats in other markets across the country.  Why go to the expense of duplicating the research when the results are already in hand?

Trouble in Radio Paradise

Radio did not live happily ever after.  After a few years, Radio stations had lost the individual “personality” that had made them unique to listeners.  Research had homogenized the music and formats to the point where all Radio stations sounded alike.  Given this blandness, compact discs or cassette tapes were preferable alternatives to many in the audience.

Radio has a history of re-inventing itself.  When television came on the scene in the 50’s, Radio was declared “dead”.  Radio responded with innovation and the golden 60’s era of rock and roll was the result.

Radio in the 21st century is far from dead, but the need for re-invention has once again arrived.  With hundreds of competing media outlets, including satellite, iPods, and the internet, Radio unable or unwilling to respond risks becoming a dinosaur.  Unfortunately, the conditions for re-invention are not good at the moment.

In the 1950’s Radio ownership was diverse and corporations were limited in the influence they could exert.  Innovation came from small groups and individually-owned stations able to exercise a level of creative freedom and experimentation that is rare today.  With Wall Street’s demand for return on investment, few want to risk trying something different.

The British SAS commandos have a motto: “Who Dares Wins”.  Great risk offers great rewards.  However small the number, some stations will dare to experiment…and these will be Radio’s hope for the future.  When Radio is pulled from the ditch where it’s mired, the tow truck will be labeled: “Innovation”.

Until the re-invention begins, I’ll see you in the supermarket aisle.

Has It Been That Long?

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Almost an entire month without a peep of activity on this blog? What’s going on?

Well, business is going on. We’ve been involved in two massive projects, each with a strict deadline and no wriggle room. Since I’ve never even seen a wriggle room, let alone try to furnish one, I’ve been diligently moving ahead with my portion of the project. And this poor blog suffers.

Or, maybe it is actually better off.

Anyway, I didn’t want to see an entire calendar month pass without some type of post, and this short item is the result.

Things will be better (or worse) next month. Nothing ever stays the same.

Friends I Didn’t Know I Had

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It’s amazing.

In the last two weeks, I’ve heard from hundreds of new friends who have appeared out of cyberspace to inundate me with good news:

  • Sgt. Perry Gibson, fighting valiantly in Iraq, wants to share millions of Saddam’s newly-found loot with me. His rationale for keeping the money is “we found it first”. It’s good to know that the “finders keepers” rule is still in effect.
  • Jim Peters asks for my urgent response to his quest to share millions from a deceased uncle who was the Director of Golf Ball Measurement in Nigeria. Said relative managed to accumulate quite a stash while measuring his balls.
  • George Bogucki insists I get back to him “ASAP” on a matter of some urgency and confidentiality regarding the shipment of funds from his country to a “safe haven” in the U.S. It appears he has found several million dollars in cash misplaced during a recent coup.
  • Chen Guangyuan Lili sends his “compliments of the season”. This could be the Easter season or perhaps hunting season; Chen does not specify.
  • Mrs. Sousse Pressons is holding a courier package for me containing another 3.2 million in U.S. funds. If I will only pay the modest excise tax and handling fee of $1,500, she’ll ship it right out.
  • Jerry Smith sends a message he instructs me to “TREAT AS URGENT!!” Only my wife can get away with using that tone.

To top it all off, I’ve apparently won every Internet lottery, sweepstakes, giveaway, and cash award there is! This is especially amazing, in that I’ve had virtually no luck at all winning my state’s little lotto which requires selecting only five numbers.

Since the economy took its well-publicized nosedive, the amount of spam pouring into my inbox has doubled. This is a good indication that hard times can affect scam artists as well as honest members of society. Hey, a guy has gotta make a living!

Fortunately, the combination of Spam Assassin, MailWasher, and an aggressive filter means 99.9% of this junk never does make it to my inbox. Once a day, I visit a special “spam box” I’ve set up and delete the contents, consigning these hucksters to oblivion. Every so often I take a spare moment to peruse the messages before carrying out the execution. It’s sad, really, so see such creative juices go to waste.

But spam, like taxes, will continue. And tomorrow, there will be more of both.

Enemy At The Gates

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It started as a trickle. Then it turned into a stream. And then a flood.

I’m talking about spam.

As anyone who has created a blog knows, spam artists are quick to seize any opportunity to promote something, anything by hijacking comments. In creating the Radio3K.com blog, I had hoped to avoid this pestilence. Alas, such was not to be.

After receiving a constant barrage of comments from sites such as xyowidnvuen.com and tpo29fnasloop.com for everything from viagra to rubbing alcohol, I reluctantly took the only easy option open to me — disabling comments. This has closed the spam spigot, and unfortunately also terminates your opportunity to respond to my posts.

I suspect this step is not one that is catastrophic; it will not be ranked with the financial meltdown or the current (as a I write this) fake hysteria over bonuses for AIG employees that the new administration knew of and approved before they decided to condemn it. This supposition is backed up by the evidence that few readers take time to comment on these posts. While less generous souls would credit this to a lack of readership, I choose to believe it’s because most visitors are in accord with my musings.

Nonetheless, comments may be reopened at some future date. In the interim, feel free to respond to anything you read here via the Radio3K.com contact page.Through the magic of electronics, such responses will be whisked to this blog and posted under the appropriate topic.

And to the folks at wifhvjeufyaugwjk.com: go pound sand.

The Kamikaze Presidency

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It is with reluctance that I dip my toe into the cesspool of politics via this blog. I really prefer to concentrate on the ongoing throes of Radio, the Media I Love Best. However much I try to ignore it, the political climate always seems to rain on the Radio parade at one point or other. Now, with President Obama and the Democrat-controlled congress spending one million dollars with every word I type, I am motivated to break my self-imposed silence on this matter.

As a Radio group manager, I always evaluated people on their actions. The actions of President Obama were initially puzzling to me, since any intelligent person should realize that the only way out of a financial shortfall is to cut expenses. Yet the president chose to greatly increase them. Why would he do this? I wondered, for Obama is clearly a smart man. There had to be a reason why he chose to get behind the controls of a jet fighter in a nose dive and advance the throttles to full military power.

The president either believes he is doing the right thing by bankrupting the country, or he has a larger vision of a socialist nation and is willing to make any sacrifice to achieve that vision — even sacrificing the second term of his administration. I think in Obama’s case it is the latter.

The president won’t be satisfied with even a giant step toward socialism; he wants to arrive there in one massive leap. Even if it costs him a second term, Barack Obama will depart Washington having achieved his goal, regardless of the cost to the nation and its citizens.

Time will tell if my assessment of Obama’s “kamikaze” presidency is correct. If I’m right and even if he is only partially successful, the damage to the United States may be irreparable.

Passing of A Legend

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With the death Saturday of Paul Aurandt—better known as Paul Harvey—we have seen the passing of a true Radio legend.

Harvey’s Radio career began in 1933 when, as a 14-year old high school student, he landed a part-time job at KVOO in Tulsa. While many of us started part-time in Radio, Harvey’s career was exceptional. He was a fixture at many of the Radio stations with which I was affiliated during my days in the media, and at least four generations of Americans came to know and trust his voice and unique style of delivery.

In the 21st century—an era where so many are routinely bestowed the appellation of “legend”—Harvey was a giant. We shall not soon see his like again.

Customer Worth

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“We have a special this month,” said the sales manager. “Anyone who takes our Mega Monster Package before the end of the month will get 20% off.”

There is a buzz among the sales reps. This is a good deal!

“And it’s good only for new advertisers.”

You’ve probably heard this many times before; a station will bend over backwards to attract new advertisers, while ignoring existing, loyal customers.

Why?

I know, there’s always the fear that: “If we give them a 20% discount, they’ll cut their schedule back by 20%!” That won’t happen if the discount is presented as a bonus—a reward for the customer’s loyalty over the years.

If anyone is worthy of a reward, isn’t it the customer who’s been a regular advertiser on your stations for two, five, ten years? A customer who is appreciated (and who knows it) is less likely to abandon you during tough times. Yet our often short-sighted approach is to reward new customers while ignoring those we have worked with for years.

Everyone appreciates a reward—think back to your last pay increase or promotion—and advertisers are no different. Don’t give them a reason to go elsewhere with their business.

The “We’ll Tell You What To Listen To” Doctrine

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As the drumbeat grows for re-instatement of the “Fairness” Doctrine, it is becoming ever more obvious that most of the lawmakers in Washington have a great deal of ignorance about the free market. In the legislators’ opinion, talk Radio listeners must be required to listen to certain programs — whether they want to listen or not.

The free market has done a pretty good job for the last 89 years in helping Radio serve the public. If a broadcaster airs a program that people don’t listen to, that program soon goes away. Without listeners, there are no advertisers. Without advertisers, there is no revenue. Without revenue, there is no station. One would think that anyone with a brain would be able to grasp this concept.

Apparently, this reality escapes quite a number of our senators and representatives. But then, a lack of intelligence has never been a bar to public service.

So if we’re going to be “fair”, let’s do it right. Let’s have legislation requiring equal time for all formats on all stations. For every hour of rock, lets have an hour of polkas. For every hour of jazz, an hour of rap.

It’s only fair.

Okay, it’s not fair. Because despite the tyranny of lawmakers, listeners will vote with their Radio dials. Or vote with the “off” switch. But perhaps legislators have an answer for that, as well: forced listening.

Are we turning into a dictatorship? My fear is the answer could be “yes”. And certainly, re-enactment of the “Fairness” Doctrine is a first giant step in that direction.