THINGS TO LOOK OUT FOR IN 2010

2009 might go down in the record books as one we’d all prefer to forget. The economy tanked, revenue was down and lots of great people lost their jobs. There were casualties in small, medium, and large broadcasting operations, but hopefully we have all learned valuable lessons and are now better positioned to function in this new economy.  The indicators are turning positive as we begin a new decade. This is the time of year when we all think about the future and do a little crystal-ball-gazing. Here are a few things that might warrant your attention in 2010.

Revenue: Generating local dollars will be more important than ever. National dollars have declined in many markets over the past two quarters because of the economy, along with the shifting of dollars to larger and other medium markets. With that in mind, here are five areas you might want to look at to be successful in 2010 when it comes to generating local revenue.

  • Continuous Training: Radio as an industry needs to offer our sales executives better training and I believe we need to come together and set up some industry standards. Radio experiences a high attrition rate, not because our sales people have not been trained to sell, but because they have not been trained for the 75% of selling that occurs after the order is signed. We need to invest more in training our account executives in how to create and manage results and less on closing ‘deals’. Sean Luce says “People are your greatest asset? Wrong! Well trained people are your greatest asset. In tough times, it’s hard to imagine your training doesn’t get more in-depth and intense. Imagine any military trying to win a war, saying, we’re not going to train the troops we’re sending into the field this time. Believe me, they would all be cannon fodder. You should expect as a rule of thumb, a 30-1 return on your training dollar as long as you stick with it and follow up as a sales manager. And oh yes, whenever you send someone to training—you as the manager better be there with them. Otherwise, how do you know what they are coming back with? This is where there is no accountability for training as many managers think they don’t have to attend the sales training seminar. Guess what? You as their sales manager better be there leading your troops or you will be shot first in the field.”

  • Media Education: We must continue to educate advertising clients and prospects about the benefits of reaching and influencing local consumers. Most product purchases are made by consumers who drive less than 30 kilometres to make that purchase and radio reaches these buyers better than any other medium. Therefore, creating educational seminars, and bringing in experts to talk to advertisers about ways to ensure their available advertising dollars are allocated appropriately based on various advertising options, will help your radio station to be seen as a media partner, instead of someone just trying to sell spots. Wayne Ens of Ens Media talks about the importance of intrusive media and the percentage of a client’s advertising budget that needs to be allocated to this media. In most markets the passive media such as Yellow Pages and newspaper get a disproportionate share of the advertising dollars. “We believe selling is teaching. Most local businesses don’t understand the respective roles of intrusive media and passive media. Intrusive media are those media which reach and influence consumers on the go before they are ready to purchase and while they can still be influenced to prefer one supplier over another. Intrusive media are primarily radio and TV, although some outdoor can be somewhat intrusive if the message is powerful. Passive media are those media for which consumers must stop what they are doing to research and absorb the message. By definition, passive media are only referred to when the consumer is in the market to buy, but has already established certain opinions and preferences created by intrusive media or life’s experiences. Passive media are primarily print and web media. We need to teach advertisers how to use intrusive media first to get prospective buyers into their funnel, and use passive media to close the deal. Once a consumer already has the cheque book out for the Chevy, it’s too late to persuade them the Ford might be a better vehicle. Teaching our local clients the strategic use of intrusive media and passive media in the overall marketing mix is proven to generate more new business, and more renewals.” Sean Luce of the Luce Performance Group says “Advanced education for clients is mandatory! And should be on-going. Imagine if your clients/prospects knew that over 60% of consumers today shop a business or product because they think about it first which is where “top of mind awareness” comes to play such an important role in how businesses allocate their advertising dollar. How many business owners allocate 60% of their advertising dollar to radio? How many understand how important having a great “air force” of radio is to their advertising plans and more importantly, their results? Also, don’t forget about the “buying cycle” of consumers. One of the best things you can teach a business owner is about how long it takes for a consumer who actually starts to think about the product before they actually walk in the door of the business owner. Furniture for example is 3.9 months. And they want to test radio with a 2 week schedule? Imagine that!”

  • Improving the Quality of Your Local Radio Commercials: Consumers will be exposed to 20% more commercial messages this year than in the past. If your local radio commercials are going to break through and clearly communicate the right message, then you might want to look at how to improve the writing and production of the local spots. DJ Williams is a Canadian who spent the past few years looking after Clear Channel’s top advertisers and writing some of the best radio spots you’ll ever hear. For example, he writes the radio spots for Time Warner Cable, Pizza Hut and New Balance. DJ says “All too often, stations try and close the sale based on rate, as opposed to solutions. When you move the focus to the creative message, the percentage of sales increases. When the client loves the creative, the spot rate becomes secondary. ‘Quality’ needs to be defined in terms of the copy being relevant or meaningful to the target audience. In the past, we tried to ‘broadcast’ using gimmicky productions or generic messages to influence ‘everyone’. Today, smart marketers ‘narrow-cast’; creating messages that are more meaningful and relevant to specific target audiences. Sophisticated consumers today are the victims of over-communication and have learned to tune out messages which do not appeal directly to their emotions and their personal situations.

  • Look Beyond the Obvious Categories: Radio sales executives tend to be creatures of habit. They will look at who spent last year and often go where the easy money is. But some of the businesses who advertised last year may not be around or have smaller budgets. Did you know that more than 30% of successful businesses in Canada do not have a storefront location and many do not have a presence in the Yellow Pages? They are small operations often operating out of the home, but they account for over $25 billion in revenue in Canada each year. So encourage your sales executives to look beyond the obvious and develop some categories that are new to your radio station. If every sales executive found one or two new categories that had never been on the air before it would make it that much easier to meet or exceed your sales targets.

  • Generate Revenue from Your Website: Online is now getting more ad dollars than radio. In 2010, internet radio and podcasts will generate $228 million in ad revenue – a 28% growth from last year. eMarketer predicts that over the next two years, internet radio and podcasts will experience a growth of 137% to reach $394 million in ad revenues by 2011. Do you have a plan to generate revenue from your radio station website? If you are not already, then 2010 might be the year to get serious about this. There are lots of resources and people who can help you. The key is to look for local dollars, ensure every proposal going out your door has a web component in it, and mine specific categories that are well-suited to the internet. I am assuming you already have a great website. If not, then you need to fix the product and generate the web traffic before you can hope to generate revenue from it. Now that the SOCAN tariff issue has been settled, there should be nothing holding you back from additional revenue via your website. Think of it as your 13th month!

Identifying Your Benefits: What are the assets of your radio station? Mark Ramsay spoke about this recently and made a powerful argument for the importance of identifying your assets. He says for a brand to be talked about it must be inherently interesting. So ask yourself this question – “What is interesting about your brand?” Once you know what your core assets are, only then can you focus on protecting and promoting them. Perhaps one of your key assets is your morning show, or perhaps it’s your huge coverage or quality of signal. In some cases it may be the station website, or your standing in the community. It is unlikely to be your format position or that you’re #1 all people 25-54. Listeners don’t care and they are becoming increasingly jaded by all the meaningless statements they hear in the media day in and day out. 2010 should be the year that you review and replace all your on air imaging so every image cut has a purpose and it promotes a specific listener benefit.

New Media/Social Media: Many broadcasters are still trying to come to grips with what all this means and how it might apply to their business. Stations have set up a presence on Facebook and Twitter, but in our opinion, few are doing it properly. Social Media is the fastest growing segment on the web and experts predict it will become even bigger over the next 12 months. A recent example of one media outlet using Social Media tools effectively was the Seattle Times. They used Google’s Wave to cover the tragic Saturday morning murder of four police officers in Lakeland, Washington, plus the search for the shooter. It became a live document that allowed folks on the Web to take part in helping to move it forward. It was a snapshot of what became real-time group reporting, and a creative solution for a newspaper. The people from the Outback Steakhouse are also using Social Media tools effectively. They offered a free Bloomin’ Onion to the first 500,000 people who became its fans on Facebook. Their list grew by 125,000 in just 8 days in November.  When it comes to Social Media and how best to utilize and integrate these tools into your broadcast strategy, we have some proven ideas and Dave Charles is happy to talk with you about this.

Personality Development: What happens between the records in 2010 will be more important than ever. So this is the year to look outside the box and find talent who know how to truly communicate with your listeners. The good news is that applications at most of the broadcast schools in Canada are up and the level of interest in radio has never been higher. Jerry Chomyn, Director of Broadcast Media at Humber Institute of Technology and Advanced Learning says “We train our graduates to be compelling storytellers on a number of platforms, rather than just focusing on the audio requirements of radio.  We want people that understand that effective media storytelling involves cross-platform work in audio, video and written script.” Jerry says “Good talent development is good business with concrete dividends.” Jim Car who runs the broadcast program at Seneca in Toronto says “We still have more applications than seats each year. However, the makeup of the applicants has changed, in that the students who apply today have either already been working in traditional radio as volunteers or have hosted their own programs at their high schools, or online web stations. More are walking in the door with some experience and a better understanding of what they want and they are also slightly younger.” Brian Nuttall from Fanshawe College says, “This past September we accepted the largest first year group in the history of the program.  Our experience has shown that there is much interest in the ‘craft of radio’ and Ontario is a desirable destination to further one’s broadcast studies. The industry needs to know that there are some extremely creative young minds at the doorstep.” So, make the effort to reach out to these broadcast colleges and look for talent. Also, give some thought to how your station will upgrade the skills of your on-air talent. Ensure they are exposed to new ideas, know how to seek out and deliver compelling content, and become more interactive with their audience. This will help with staff retention, and what comes out of the speakers will be so much better.

How People Consume and Use Radio Will Continue To Change In 2010: There will be several  technological developments in this next year that are likely to impact terrestrial radio both positively and negatively. For example, city-wide WiFi coverage will become a reality in more urban areas across North America. Sprint is now rolling out their 4G network and is selling “MiFi”, which offers a personal Wi-Fi bubble that allows consumers to enjoy broadband access over a large geographical area for a monthly fee. Nearly one in three people surveyed in the States said they were interested in listening to online radio in-car, and most industry experts agree that the increasing popularity of online radio – driven by expanding WiFi and mobile devices that can stream stations – is just what radio needs. As the popularity of online radio increases, more and more advertisers are coming around to it, spelling great revenue growth for stations. Broadcasters that stream online are poised to take advantage of the continual growth in online radio dollars over the next several years. This will allow mobile consumers to listen to and consume more digital media than ever before. Tuning to online audio streams will continue to increase as smartphones make it easier than ever to listen to audio streams. According to the recent Arbitron report, more people are listening to News/Talk radio via streaming on their computer or wireless device. Perhaps that is one of the reasons why News/Talk/Information is still the #1 format in the US with 12.6% share of listeners over the age of 12. Bridge Ratings projects mobile phone radio audiences to reach 40 million by 2015, and based on current converging trends internet radio will have 180 million listeners by 2020. However, Bridge Ratings goes on to say that terrestrial radio will still have 250 million listeners. Another technical change that will benefit radio in 2010 may see Apple unlock the radio tuners rumoured to be built into the Apple iPhone, but are inactive at this point. The Nano already has this feature, and other cell phones such as the Samsung P2 and Nokia’s E72 come with FM tuners enabled. I am told that the delay from Apple is because they want the software to automatically identify the songs heard on the radio and then make it easy for the user to link directly to iTunes for purchase. But no matter how technology changes, I believe that if radio remains local and immediate, listeners will consume it and advertisers will need it.

Ad-Supported Music: Price Waterhouse Coopers released a report in June indicating that CD sales will fall at a 2.5 percent annual rate over the next five years as non-physical formats overtake them. Revenue from music distributed online will surpass physical sales by 2012 as consumers switch to online or wireless formats, including downloads, internet radio and ring tones. Advertising-supported services such as Vevo and iTunes will drive the increase in non-physical sales. So the way consumers enjoy their personal music will continue to change and I think this creates an opportunity for radio. Chart shows and countdowns will become more relevant than ever. I believe there is also a revenue opportunity for radio with the possible demise of record stores, since stations can easily display the songs they play on their website and allow listeners to download the music. Radio will be providing a service to listeners and also generating a commission on each sale.

Content: I think the goal of every on air performer should be to make every break count in 2010. It is the quality of the content that brings listeners back or keeps them listening longer. This means putting the effort into finding the best material, and 75% of it or more should be focused on local. Also, take the time to review the music log and build creative teases to hook people forward and then spend the time while you’re on the air crafting each and every break. Off the air make time to listen to other stations online to hear what others in your daypart are doing and you’ll be sure to pick up some tricks. To get you started, here are a few stations offshore covering multiple time zones: Check out 106.2 Heart in London, England, 96.9 Nova in Sydney,  Australia, 94.2 Jackaranda FM in Johannesburg, South Africa or More FM in Auckland, New Zealand. These are all very successful stations, and one of the things they have in common is personalities who really know how to prepare, create and deliver compelling, local content in order to make a real connection with their listeners.

Conclusion: I believe more people will consume radio in 2010 than ever before. Radio listening is up with the average of five radios in each home, radio remains the dominate medium in the car, and 2010 will see more streaming and FM tuners in mobile devices. This means we will have more opportunity than ever to make the local connection, entertain, inform, serve our communities, and make some money as well. Have a great year!