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.

Dealing With the Devil

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Have you ever agreed to a long-term, low-rate schedule and later come to regret it? It has happened to many of us. The allure of a large gain in total revenue can blind us to the long-term consequences.

A wise Radio mentor educated me long ago that each ad on your station is worth exactly…what you can get for it. Each decision to purchase by the advertiser (or agency) boils down to answering this question: “Is the benefit of airing my message on this station worth more to me than the money?” If the answer is “yes”, the sale is made. Conversely, the Radio representative wants to obtain the maximum payment for his station’s time, while answering this question: “If I don’t sell this time to this advertiser, will anyone buy it—or will it go unsold?” The fear that we will be unable to sell the time drives us to weaken our position and accept a lower rate.

After instituting a yield management system at our stations, our entire concept of rate was altered. When an advertiser resisted paying a higher rate, we were in a position to determine if we could “give” on the rate, or should stand firm. To our initial surprise, we found that standing firm more often than not resulted in making the sale anyway, and at the higher rate. The advantage of having the law of supply and demand working for us allowed our stations to increase rates by an order of magnitude within two years. It made the difference between being marginally profitable and substantially profitable. I don’t know about you, but I’d go for “substantially profitable” every time.

Advertisers (and even agencies) aren’t devils, despite how you might feel in the middle of any negotiation. In the months ahead, the loss of marginal advertisers who go out of business and pressure from big accounts to reduce expenses will tend to increase your unsold inventory and push your average ad rate lower. Don’t panic and make a deal on rates you can’t live with over the long term. Eventually, business will improve and you’ll be stuck with low ball ads eating up your time—and your profitability.

Negotiations must be a win-win for the relationship to prosper. Even when dealing with the devil.

What’s in A Name?

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Why is it that Radio and TV sales people sell “spots” and newspaper people sell “ads”?

Does what you call a thing make a difference? A lot of people on Madison Avenue certainly think so.

It’s my position that one Radio ad is equal to one newspaper ad. We demean our product by referring to a Radio ad as a “spot”, and inadvertently elevate the product of one of our competitors.

Here’s a belated New Year’s resolution for 2009: ban the term “spot” from your vocabulary (unless you’re talking about removing something from your clothing). Let your advertisers know they’re purchasing a quality product, not a blemish on their wardrobe.

Less is…Less

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Clear Channel’s recent layoffs are merely the latest in a continuing series of employment cutbacks in Radio, and certainly more reductions are coming in the days ahead. However, the elimination of sales positions is a double-edged sword.

One very successful market manager I know believed in hiring as many salespeople as possible. He felt a larger staff put more pressure on the stations inventories, driving demand and higher rates. He was willing to suffer a few poor performers—for a time—in order to achieve his sales goals.

Another successful manager demanded performance from every rep and marginal players had 90 days to become producers. Failure to achieve earned them a brief “exit interview” and a final escort to the door.

Which approach is better? My personal experience has been that the larger sales staff works best. There’s no doubt that a smaller sales staff means fewer bodies on the street and less pressure on the inventory. And in tough economic times, I would certainly monitor everyone’s performance closely. But isn’t that something we should be doing regardless of the economy?

There’s no good answer, and I would be interested in hearing about what’s working or not working in your market. Your comments are welcome.

A World Insane

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The United States Congress has placed an admitted tax cheat in charge of the Internal Revenue Service. Some of the very people responsible for the housing crisis—that led directly to our current economic problems—are in charge of getting us out of the very same crisis. What’s next? Osama bin Laden in charge of Homeland Security? He certainly is “knowledgeable” about potential terrorist attacks and that—according to congress—makes him qualified for the position.

While I make every effort to stay away from diving into the sewer we call “politics”, this series of events makes me think the U.S. has gone nuts.

But let’s shrug that off for the moment. I mean, how much damage could one dishonest man do to the tax system that touches the lives of every man, woman, and child in the country? Instead, I want to focus on another aspect of insanity: the media.

Today, I saw a newsletter from Ari Galper in which he takes the media to task for bombarding us with a steady stream of negative news. As I pointed out in a recent post, this depressing barrage of discouraging stories only serves to further erode our confidence in the system that has brought us the highest standard of living in the history of man.

The first step Ari recommends in fending off this continuous attack of negativity is to shut out as much of the “news” as you can! I wholeheartedly second this motion, but in so doing it made me think about the form of slow suicide the major news media are in the process of inflicting on themselves.

Think about it. The newspapers and TV (and to a lesser extent Radio) focus on the bad economy, job losses, businesses moving offshore, the threat of inflation, and today, the murder-suicide of a family of eight in California. News, yes…but what is the result? Does such reporting motivate you about the inherent strength of our economy, or does it prompt you to hold back, to save money for even rougher times that may be ahead? And when you don’t take the family out to eat, or out to a movie, are more jobs lost or gained? Are advertisers more likely or less likely to advertise in those same newspapers or on those shrill TV networks?

In their eagerness to report on how dismal the times, some media outlets are digging their own graves.

This condition cannot continue indefinitely; the economy will either quickly recover—despite the ham-handed efforts of government—or it will plunge into the abyss. With either outcome major newspapers, many of which are already on their deathbeds, and the hysterical television networks will have lost much more than revenue. They will have lost readers/viewers, yes. But they have also lost credibility, and that is much, much more difficult to restore.

Only in an insane world would an organization assist in its own demise.

Welcome to planet Earth.

Negotiator or Hostage?

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You’ve seen this scenario dozens of times in the movies and on TV: the bad guys (robbers, terrorists, etc.) are inside a building with hostages. Outside, police SWAT teams surround the location, and a negotiator communicates with the hostage-takers.

The bad guys have demands: food, transportation, release of prisoners, whatever. The police respond by offering to meet some of the demands in return for the release of some of the hostages. And so it goes, until the hero or heroes take some action to save the day.

Now think about the last time you “negotiated” a schedule with a client. Were you really the negotiator…or were you the hostage?

Negotiators get something in return for giving something. The client says: “Your rates are too high.” If you lower the rate without getting a concession in return, you’re a hostage. Instead of responding: “Maybe we can do a little better on the rate”, you instead say: “I can reduce the rate by this much if you agree to extend the schedule an extra two weeks.” That’s a negotiator speaking.

One of the benefits of a well-founded yield management system is that it gives you the leverage needed to get the most out of client negotiations. You know where your peak demand is as well as days and hours of lesser demand. By adding some lower-demand, lower-priced ads into the schedule, the client gets a better rate, and you sell more time while leaving more of the peak demand ads available for sale to other advertisers.

The economy is going to be rough for the foreseeable future. Improve your negotiation skills now and refuse to be held hostage to unreasonable demands for reduced prices. Then, you’ll be the hero that saves the day.