Groupon - An Internet Fad or a Real Competitor?

The buzz on Groupon is pretty strong.  If it hasn't hit your market yet it looks like they will, or something very close will pop up.  Radio has also tried to package itself to meet Groupon 'at the pass' in many markets.

Yes, right now this is a 'hot topic.'  But, is Groupon poised to last?

On the 'Tech Crunch' website Rocky Agrawal, an entrepreneur and contributor to Tech Crunch, makes a very convincing case that Groupon will start to struggle as the hype wears off rather quickly.  As Rocky goes through the economics of the Groupon business model he pretty much ends up with a sophisticated Ponzi scheme.  He makes a very interesting argument that your sales team and probably a number of your clients should read.  Are all his facts straight?  I'm sure some holes can be found, but what he says as he digs into their business model is very interesting.  Check out Rocky's analysis here.


While Rocky digs deep into the mechanics of their sales pitch and business plan at Groupon what he doesn't cover is the ability to compete with Groupon.  Many of the local sales teams in Radio, TV and Newspaper are quick to counter with coupon plans of their own.  Other web competitors like Resturant.com and Living Social also have been quick to hit with their deals.  


We do need to take Groupon seriously on the sales side, their pitch right now looks very interesting to a lot of local merchants and national brands.  Radio does have a ton of advantages and can integrate some of the good sides of offers like Groupon.  Couple that coupon with the power to reach a ton of cume in the market quickly and you clearly have a winner.    

The New Reality of The Demos

You've probably either seen the Census crew or filled out a form by now here in the U.S. as we review our House Districts and population characteristics.  This count will bring out some realities in marketing and demographics that will likely change a lot of the strategies many products have been using for the last 30 years.

While the final results won't be out for another 6 months or so we can see what the likely picture will be from the 2009 estimates.  

Look at the 3 circled groups that roughly represent the Older Boomers born before 1964 with 63.6 million, Generation X  born from 65 to 79 with 61.4 million in the middle and the new Millennial Generation born between 1980 and 1994 at 64.8 million on the younger side.


The real key here is that now we have hit a time when the new Millennial's actually outnumber the Baby Boomers.   Much of the entire product strategy and marketing targets for most products has been built around  the Boomers since they first came of age in the 60s.   That's why we still place so much importance on the 25-54 demos even though you can see that now that audience is mostly built from the Generation X group with the lowest population numbers of the 3 groups.


We can already see the shift in many products in what they are selling and how they are using media to market their wares.  Obviously the younger Millennial's are much more adapted to all the new media options.  They also have vastly different desires and needs when it comes to products.  Look at the car industry, which seems more interested in the compact and even sub-compact models like the Ford Fiesta or the Kia Soul than keeping the Mercury brand name alive.


The problem we face in radio - we've been obsessed with 25-54 for the last 20+ years and haven't worked a lot on the younger demos.  Now that the Millennial's are centered in their 20s they are a huge marketing target and with the revelation in the upcoming Census news that now they outnumber the old champion demo of the Boomers radio has a lot of catching up to do.

12 Rules of Advertising and Marketing

Ran across 12 Rules of Advertising from

Bill Bernbach – Creator of the old VW – Think Small campaign in the late 60s/early 70s. Even though they come from the pre-digital age these rules still rule. Might be something to forward to your sales teams as they hit the street to help their clients.

1) The most powerful element in advertising is the truth.

2) Word of mouth is the best medium of all.

3) It is insight into human nature that is the key to the communicator's skill. For whereas the writer is concerned with what he puts into his writings, the communicator is concerned with what the reader gets out of it. He therefore becomes a student of how people read or listen.

4) Nobody counts the number of ads you run; they just remember the impression you make.

5) You can say the right thing about a product and nobody will listen. You've got to say it in such a way that people will feel it in their gut. Because if they don't feel it, nothing will happen.

6) Forget words like 'hard sell' and 'soft sell.' That will only confuse you. Just be sure your advertising is saying something with substance, something that will inform and serve the consumer, and be sure you're saying it like it's never been said before.

7) Just because your ad looks good is no insurance that it will get looked at. How many people do you know who are impeccably groomed... but dull?

8) No matter how skillful you are, you can't invent a product advantage that doesn't exist. And if you do, and it's just a gimmick, it's going to fall apart anyway.

9) Our job is to sell our clients' merchandise... not ourselves. Our job is to kill the cleverness that makes us shine instead of the product. Our job is to simplify, to tear away the unrelated, to pluck out the weeds that are smothering the product message.

10) Advertising doesn't create a product advantage. It can only convey it.

11) Advertising is fundamentally persuasion and persuasion happens to be not a science, but an art.

12) Properly practiced creativity must result in greater sales more economically achieved. Properly practiced creativity can lift your claims out of the swamp of sameness and make them accepted, believed, persuasive, urgent.

Playing it COOL

Projecting a Cool image is one of the toughest skills to pull off in marketing, branding, and creating the product/station/personality. It's a tight balance point of being noticed and making an impression without overstating or overdoing it.

Watching a Biography channel piece on Letterman he said that he wanted to get into late night talk because he watched Carson and 'he made it look SO easy that I figured I could do it.' The reality Letterman found when he started his late night show and his CBS show was that the job was anything but easy. Carson pulled it off with an style that looked effortless and COOL.

Even though Carson was probably way off the cutting edge in guests, humor or show style from 1975 on he still had enough Cool in his style to pull it off.

Cool can also be way over done. Being too cool for the room is a common phrase and for a reason.

Swing too hard and you will miss the ball a lot of the time. The same swing principle applies to your Cool on the air and in the produce. One of the 'coolest' icons in movies was probably James Dean in the 50s, but look at his movies - often his lines for a 2 hour flick would have fit on 1 page. It was his look, his eyes, his silence, and a careful pause in the timing that built his coolness.

How are you handling your cool factor? Is it in that delicate balance or is it overcooked or coming up rare?

Using Imaging to SELL Not Just Identify

I always look forward to monitoring stations. When you hit the road and spend a few days immersed in a market or even just breaking down a station with an on-line monitor the area that seems to fall short is in the imaging.

All too often we work hard at just keeping it short - so it says nothing and just repeats the calls, name/frequency, and maybe some positioning.

We also tend to make such grand positioning statements. THE best rock!!, All the Hits not just some of them, Today's Hit Music, -- we throw around statements like these and expect the audience to believe them and embrace them mostly because we make sure to say them 14 times every hour.

Of course there is also the BIG production packed with sound effects, movie drops, TV clips, Music hooks, and anything else we can find to layer into the 10 second sweeper. Often these are so packed you can only hear the copy in a production room with the processing set 'just right'.

When you actually break down the message much of the time it's about recycling personalities, selling feature shows, hyping contests, promoting events, and selling that we have more music than others. It's ok to push all these important parts of the station, but does it really SELL THE STATION? Does this really build up any images in the audience's head? Or does it just try and push them around the dayparts? If it's not recycling it's usually making claims that set off the BS meter in much of the audience as quickly as humanly possible.

Think of it like a billboard for a minute. A billboard that just says McDonalds Next Exit will make the sale if I'm hungry on I-75. But, a billboard with a clever phrase or an eye catching picture that leaves a lasting image about McDonalds even if I'm not hungry goes a much longer way to building McDonalds into a real brand.

We don't just need listeners right now. We need them to have great images and feelings for our brand as much as possible to win. You won't get those great images if you don't project them on the air.

The best way is to think in campaigns. Brand building advertising works in series of well crafted messages that communicate the facets of the brand with a creative presentation that catches your ears and eyes. If you approach your imaging this way - with a clear message in mind and stick with it you will be building a real brand.

Now that's worth putting between the songs.

The Old Fashioned Consultant Sell

As radio really came of age in the 80s one of the keys many sales teams used was 'the Consultant Sell.' The concept was built around the sales people taking more of a role as a marketing advisor than just being a person who sold 60 second spots. Learn as much as you can about the business you are selling to and apply all your marketing knowledge and resources to help them make a name for themselves or ring the cash register. The goal was to become their trusted advisor, on the inside of their marketing plans which would obviously mean more sales for you and the station.

It was really a great idea and when it was well done by a sales person it did move the needle on the sales budget and also worked well for many clients who now had a trusted advisor at a media outlet that reached the whole market at a reasonable cost.

We don't hear much about the 'Consultant Sell' anymore. In fact you don't hear much about this style of selling in any industry anymore. One would think that this is a basic building block of selling anything - learning as much about your customer as possible and then try to fill their needs. The sales person who could fill this role should be in the drivers seat.

I see a couple of reasons the Consultant Sell could have fallen off in Radio:

1. Too many Corporate mandates. Who has time to hang with the local Auto Supply store or Insurance Agent to find ways to help them build their business. You have 2 sales meetings, a mandated call sheet, a budget session, 5 spots to write/produce and 3 pitch presentations due today.
2. Not much support. When you have to do all the research, presentations, write your spots, and work with an overstressed promotion department you have to wonder what resources you really have to offer as a marketing consultant to the local business person.

While these reasons may be factors at some stations I suspect the real reason the Consultant Sell isn't used is because it doesn't work anymore. In today's world anyone who can use Google can network on their own to find out all about new marketing techniques and theories. They can stop in on any number of web sites to learn how to use databases, the web, viral video, search engines, ebay, and many more options.

No doubt the web has replaced the sales person in many industries as an expert on their wares. Here in radio we do still have the sales teams - but do they have a role in today's world to relate to the business owners and potential advertisers? Maybe it's time to take the old idea and rebuild it for the New Realities of the digital and new media world.

Pumping Up RADIO

As we watch another exciting plunge in the stock market and more reports on radio's economic picture for 08 and the first months of 09 - the news looks worse every day.   Here are a couple of thoughts that might help:  

A Message for ALL:

Here's a thought - think of all the commercials we ran for HD radio. In the Nielsen most played commercials 'charts' the HD campaign was in the top 3 for much of 08.   How about launching a new campaign across all formats and stations that goes like this:   

Hi this is your radio.  Yes I've been around a long time with music, news, sports, weather, traffic and witty comments here and there.  But if you look deeper you'll learn that radio can really help this economy and our community get out of these tough times.  Radio gets advertising messages out to 94% of our community and the whole nation every week.  The retailers of our area can get the word out on their products and get this economy moving again for very reasonable costs.   Radio is also easy to use - a few creative words and your good to go.  The message efficiently reaches our market area.   Radio - a part of your community, living here, working here, playing here and striving to make our area a better place.  

Of course a professional copy creator could probably do a better job, but our industry could turn this tough economy into a turning point for Terrestrial Radio with a well crafted message like this.  I know we didn't do a great job of selling HD radio, but this is a basic message we could sell to our audience and clients.  And the good news - it's true.   

Bright Spots in the Economy Dust Storm: 

There are some business and retail segments that are growing in this downtrend.  I gathered these from a bunch of stories from USA Today, CNN, CNBC, Yahoo and MSNBC:  

Movies:  The box office for 08 was off around 5% but for the first 2 months of 09 it's up 15%.  Just like in the depression when the  movie industry became a big industry.  Escaping the reality is worth a price.  

Fast Food:  Just about everyone is improving - especially McDonalds and Subway.  

Wal-Mart - Discount Stores: We're looking for bargains. 

Cell Phones - There's still growth left and lots of 'turf wars' over subscribers.  Give up your land line?  Why Not.   Turn in your Cell Phone?  Are you crazy? 

Used Cars - January was a strong showing for Used Car sales.  Maybe we can't go for the new cars, but that 05 Mustang looks pretty good.  Car dealers often make as much or more on their used inventory.  

Financial Services - From Tax prep firms, to credit assistance, to bankruptcy assistance.   It's a time for these services to grow.  

College and Trade Schools:  Plenty of people who could use new skills and now with college tax credits, more loans and some layoff packages offering re-training the local colleges are running at full throttle.  

Home Style Cookin:  Restaurants that are off the beaten path and offer 'comfort food' are gaining more customers.   Good news these are often local advertisers.   

Bars, Beer and liquor stores:  Biz is up here - we can guess why.  

Video Games:  Activision and EA games had record profits in 08 and were some of the best gaining stocks in January.  Game Stop is opening 300 or more stores this year!!!

Little Luxuries:  Flowers.com did a huge number this Valentines day.  So did Pajama Gram and Vermont Teddy Bears, with a lot of it from their radio campaigns.  Many higher end restaurants also did well.  We'll spend the money for love. 

Banks: They need to restore their trust in the community and get funds flowing into them.  They need to market.    

You can bet there are more business segments that will gain in this down time.  If you have any stories pass them on.   

Rebuilding Radio's Advertising Potential

After signing up for a daily Ad Age newsletter I started getting the weekly Ad Age magazine for some promotional reason.  Was roaming through it over breakfast this morning for their Super Bowl wrap up coverage, which was very interesting.   

One thing stood out - Full Page ads for both Val Pak and Newspapers posted above (sorry they didn't all scan in, but you get the picture here).   

We have 2 older type advertising media here.  The Cox owned Val Pak direct mail service, which Cox is trying to sell along with a few newspapers.  And one from the Newspaper Project, an industry alliance to help their cause.   

2 media that are way behind radio in reaching the masses.   While Val Pak is in many markets they don't have full coverage and still rely on the mail box - a tough delivery system.  Newspapers are falling in their reach and while they claim 100 million readers here - radio reaches over 230 million people 12 plus in a week according to the latest Arbitron estimates (mostly done with diaries - imagine what it will be with PPM in the top 30 markets). 

Looking at a number of Ad Age issues I only caught 3 radio ads or campaigns in the last 6 months.   1 came from SBS - Spanish Broadcasting - with a small ad in a special Hispanic section Ad Age did.   Another came from Entercom who ran a very nice full page ad that explained their properties and reach.  The only RAB ad was for their 'radio coverage' of the Ad Week convention last September.  It didn't talk about radio or any of our advantages, just that they had some kind of radio system set up to deliver podcasts and to broadcast live updates at the convention.  Gee - that really helps sell the media, we can talk about the latest Google marketing system or maybe cover the conference on the latest way to reach people on the web. 

While Ad Age may not be the best vehicle to promote our potential to market stuff to our huge audience what kind of effort are we really making here?   It's one thing to offer lots of sales training and come up with a few buttons that say Radio Heard Here.   It's another to rebuild the image of Radio as a media that reaches nearly the whole country on a local level with very affordable programs.  

We need to 'fly the flag' a lot more for our industry.  If you look through Ad Age's articles only one showed up on some form of radio - Did Mel Pay Too Much For Howard.   Even Ad Age seems to have forgotten all about our Cinderella story.   Maybe it's time to hitch up the pumpkin coach, get all dressed up and hit the ball.   I bet if we spent just 1/2 of the money spent in Washington trying to push for more consolidation on some public relations and selling our advantages we could have weathered this storm a lot better.    Radio could have the image as an efficient, huge reach, and economical way to market products.   Just the tool to un-freeze the customer without killing your budget.   

Opportunity #4 - Sales Make Over

While there are a lot of opportunities for product rebirth in the past 3 pieces of this series I sense that seeking out new opportunities in sales may have the most potential. Having said that I'm not a sales department expert. Yes, I've worked with some talented sales people and managers and seen both success and disappointment. I've also been in on many a budget session as the sales leadership laid out their plans and reviewed that past year.

From my 'outside the box' perspective I see a lot of potential for the sales teams to really ramp it up and improve.

1. Radio HAS reach: Just this past week Arbitron released their Radar report showing that Radio reaches 234 Million people 12+ and older in the average week. That's up from 232 last year. In the younger cells - teens radio reaches 90% and with 18-34s it's 92%. Can you find a web site (outside of Google - maybe) that reaches that many people? If you want to get your message or product in front of 92% of the population at a reasonable cost you just can't beat radio. More and more big products are figuring it out - Walmart has finally recognized it, Geico, a bunch more. Hershey recently admitted that it's strong 3rd quarter came from using radio more in their marketing. You see people jumping over web sites that have 100,000 people hitting them in a week - so what, when you compare that to radio its peashooter territory.
2. Radio IS Local: For the retailers and services in your area Radio reaches them better than any other media.
3. Radio is a bargain: When you look at the prices we have for the reach it can't be beat.
4. Radio is proven: If we look at all the success radio has brought in the post WWII marketing period there's no doubt the media works.

These are just the top 4 reasons, but do the sales teams of today really understand these clear and simple advantages? Or are they caught up in endless data crunching for CPMs, rankings, and market shares? Are they watching other weaker and less reaching media walk in and steal away business with products and web gimmicks that are clearly not proven?

I often wonder if the sales teams of today know who the competition is? Do they understand Google Ad Words and how they are used? Do they see opportunities in spreading clients media to both the web site and the station? Do they know what the web metrics are and what are the most popular sites selling space in your area? I can remember the sales teams of the past having 3 day sessions on selling against the Yellow Pages or Newspapers in the 80s? Do we have anyone helping build the case for radio over the web today?

Radio could hold the KEY for many business' to getting out of this recession. Face it much of the problem we have with the economy is that the consumer is spooked. The crash of housing, credit/banking/investment, and the market damage from all that has everyone frozen. Discretionary income has just about dried up all over the country - if we don't need it we aren't going to buy it till we see some signs that the storm is over. It's going to take marketing for most of the business' to get the motor going again and we have great advantages with our huge reach, lower costs, quickness in creativity, and local market coverage.

Now is the time to train and build the sales troops for the opportunity ahead. The storm we are in will pass and it's a golden time for radio to come out roaring again. Hopefully we'll have enough creativity left on the product team, but we're also counting on having a sales team that's ready to play in the new world of media and marketing. If you're a manager or sales leader it can be your time to hit the weight room and train for the new season ahead - this could be your year. Great teams are made in the offseason and shine in the real season - this is clearly the off season.

It would help if our industry would ban together and really make the story for radio. Yes we have the Radio - It's On campaign. Forget the slogans - how about getting out the FACTS. Maybe a campaign in Advertising Age, maybe using the web ourselves to market ourselves. How about dropping all those HD radio spots (for the wasteland it is) and just spend the time and effort talking about radio and the power of it's audience? The RAB and the NAB need to step it up NOW. There's a lot more to do than hang around Washington and lobby.

Next week I'll conclude the Opportunities Ahead segment - looking forward to the holidays and hope your's are happy ones.

Sales Solves All Problems?

In the 80s as a programmer I heard the claim in a station strategy/budget session that 'SALES SOLVES ALL PROBLEMS.' In that case we had a solid product and really the sales effort was doing well but the potential to grow was clearly there and the team responded. While the revenue gains didn't really solve ALL problems it did exceed the budget and on paper we had won.

At that time we all bought in as the extra sales effort meant more resources to keep the product competitive and ahead. That statement has popped up a number of times and in many ways it became the mantra of business strategy for many station and group strategies for our industry.

Clearly sales generates the revenue and that is the lifeblood of any business. But, you still need a product to sell. In our case we still need a strong and healthy audience.

Does the business plan of your station or group still living in a world where you expect sales to solve ALL problems? It's obvious that we need content and product to sell. With all the new media in the advertising holding and building an audience has never been more challenging. Are you investing enough to get the job done? It's a simple question, but one that we are obviously not asking enough as we watch new media invading on our shares of the market more and more every day.

Building a product that draws both audience and advertisers is a careful balance. Throwing money at the product or making it all product and slighting the sales side doesn't work but, making it all sales and ignoring the product doesn't work either. It's all about balance - are you balancing your resources?

Radio's Real Advantages Go Ignored

Sometimes in our effort to 'keep up' with all the new technology and the 'cool of new' we forget a lot of the real advantages our media has.

Radio is simple to operate. For the most part you turn it on, simply adjust the volume and select the station from your favorites already punched in. No need to download anything, remember complicated web addresses, or try typing words on the numeric keyboard.

It's portable. You can take it anywhere and get solid reception for the most part. The radios are as small as I Pods or big as a wall - take your pick.

Quality. Compared to the small speakers in a laptop or always using earbuds the quality is really much better than most streams and reception is really more reliable.

We know the technology. A 5 year old can work the average car radio with little instruction. Even the 60 year old computer novice can easily get the radio to work.

There's a long ways to go to get WiFi everywhere and reliable. Look at cell phones where they have been trying to get a reliable network up for over 20 years. They still struggle, as we've all experienced, and still have one of their big advertising points around reception. What do you think it will take to WiFi the world? It could go even slower. We don't have the frequency bandwidth to auction off that we used to.

In the end perhaps radio's problem with the image we have now with the younger audience and with clients of not being 'cutting edge', or 'hip' lies in our presentation both on the air and on the streets.

On the air we haven't really evolved much - the same tactics, formats, and imaging styles have been around for decades. The look of the new radios isn't much to marvel at either - this is one of the big keys in the failure of HD radio to catch on. You don't see much new in radios, like more display screens for the RDS data. How about a system to send pictures and more data on the RDS system - just having a few text lines is very limited. While we can't push the set makers much we can work with the on-air sound and start exploring new imaging, formatics, music rotations, personalities, and promotion tactics.

On the client side radio seems to be trying to do some Internet integration into the packages and maybe a few new power point tricks in the presentations, but is that our real advantage? No doubt we need to integrate the power of our brand into the Internet, but it might be more important to sell our real advantage. That is the large reach we still have. Radio reaches over 90% of the market and it covers a specific territory. A local business or location can rely on radio to deliver an audience that is within the reach of the store or stores. Not in Russia. Is there a great website that reaches that much of the market where you can advertise on? Maybe the Google start page, but the only thing on it is their logo and the blank box to search with.

It's also a big audience. PPM has pretty much proven that you can take your CUME audience and double it for a conservative estimate of the real reach of your station. For most that's a big number. Perhaps we need a new number here - instead of the CPP or CPM how about CPC (Cost Per Cume). Take a market like Madison WI where the top cuming station is around 90,000 in Arbitron without PPM - the number in PPM is probably closer to 200,000. That's nearly half of the 1/2 million that live in the metro. Even at $200 a spot the cost per Cumer is $.00125. Now that's pretty cheap - probably less than any Google Adword that hits that many people in your market.

I know selling with CUME is probably harder than doing our pitches in Latin, but CUME will be evolving to the be the new advantage of radio and perhaps the new currency of selling tactics. It's going to take re-trainng the buyers, clients, and most importantly the sales teams. Cume is going to be our new friend and we need to learn how to use it in sales.

We have a lot going for us in this new era, but we need to get our confidence back and make the most of our positive points as we also explore ways to work with the new media opportunities. Right now our industry looks like we are surrendering and whining towards depression. Let's get our head out of the sand and realize that we're still above ground. Let's vow to make radio about the future not the past.

How Radio and TV Are Better Than Google

It seems like Radio ad sales strategy has been trying to find a way to compete with the Google adwords and click through models and for the most part coming up with few if any answers.

The system of just paying for the 'click through' to your site from other sites where your 'Google little bitty Ad' might show up has some advantages. The biggest is that you only pay for the exposure that actually causes someone to visit your site or on-line store. The other vehicle is bidding on adwords that might pop up in a search so you are placed higher, or first, in the search and gain the click through.

While it's great that you only pay for the advertising that works or that you pay to gain a leg up on your 'world wide' competition. Does it really boost your business? Does it create any demand for your product or service? Does it build your brand or craft an image for a business? Surely people have built a business with these tools, but is it that they were first? Did they go after a niche that suddenly hit? I bet if you took a few thousand and invested in all the tools and did one of those 'drop ship items from China' business models we see all over the internet you'd probably just be out a few thousand.

Radio has been building demand for products, building brands and crafting images for clients for many years. It's been proven year after year for many different clients and businesses as long as they get enough exposure to 'crack the ice' and that they have enough creativity in their message to get into the audience's head they can build demand and awareness for product or service.

Just getting someone to notice you is not enough - you have to have a message and that takes more than placement on a search with 1 million sites returned in 2.4 seconds. It takes more than a few sentences in little black type on the side column of the ever busy web pages we see. It takes more than a few banner ads that are flashing away or the pop up that everyone figured out how to block a long time ago.

You have to really establish communication with the audience. Radio can do it. TV can also do it, but at what cost and how high is the creativity bar set when you have to produce a mini-movie to stand out in the media? Radio can be very creative, efficient, and powerful in developing brands and demand. You just have to learn how to use it.

Has radio really carried this message home in the light of all the new media competition? Based on most of the feedback from many sources from Wall Street to the quarterly sale projections it doesn't look like it.

On to another topic - Jim Cramer's Mad Money rants on radio recently have been rather interesting. I catch a show here and there and sometimes in my 'random sample' he takes calls that include advice on the Satellite Stocks. He's usually pulling out the BULL and hitting the big horn when they call. He's put himself on the line here. We've also seen the merger issues with XM and Sirius seem to take forever as they passed the 1 year anniversary in their request. Many, including Creamer accuse the NAB, Congress and the Election year and perhaps some of it may be true - who knows what goes on in Washington off the floor these days.

But, you have to wonder if Cramer also has something at stake here - his reputation. If the merger goes through the stocks will go up for both Satellite casters and his predictions and reputation will improve. Even if he doesn't have anything invested here - his reputation is somewhat of an investment given the higher profile he seems to be striving for every day. Watch the Today show - Cramer is there a lot. He's got books, the show, - he's probably jealous of TV star rocket ride that Rachael Ray is pulling off. It's more than just being an investment guru for Cramer - it's chasing Oprah.

Recission - Visiting an Old Blog Entry

With all the talk this week of a recession and the stock market becoming a weird thrill ride most days I dusted off a piece I wrote here back in mid-November about the recession we are clearly in. While everyone (the Fed, White House and many in Congress) seem to be dancing here and not seeing the reality of a banking industry gone amuck, too much spending and the damage the high oil prices have on everything.

Surely CNBC will have bigger ratings as economic issues are clearly taking the spotlight. Rising Oil, the mortgage lending mess, the weaker dollar and the high cost of the war are starting to all combine and head us close to or into a
recession.

Retailers are already expecting a weaker holiday spending session and
we've already seen the auto industry struggle for most of the past year. It's
also affecting radio as the results from 3rd quarter in radio are disappointing
and in some groups it's more about 'just getting 07 over with' at this point.

So let's say we go into an official recession which would probably be declared
after more than a few months of a significant decline of economic activity,
according to the National Bureau of Economic Research. According to the NBER
we've been chugging along for the last 7 years without a recession - look at the
history of 'official' recessions for the last 60 years:

July 1953-May 1954 10 months

Aug. 1957-April 1958 8 months

April 1960-Feb. 1961 10 months

Dec. 1969-Nov.1970 11 months

Nov. 1973-March 1975 16 months

Jan. 1980-July 1980 6 months

July 1981-Nov. 1982 16 months

July 1990-March 1991 8 months

March 2001-Nov. 2001 8 months

They are usually not that long and over the last 20 years we've only 2 of
them lasting a total of 16 months.

I bring this up not out of a desire to give up radio programming for economics, but perhaps to help your team as you plan for 08 just ahead. We shouldn't let the 'R' word worry us even though there will be lots of 'hype' around it.

We also shouldn't let the 'R' word spook our advertisers and the teams inside the stations. Remember we sell advertising and there are always products and services looking to brand themselves regardless of the economic conditions. Actually a recession is the perfect time to build a brand. You will likely see less competition, less clutter around your message, and remember the audience is STILL THERE. Just because they may be holding their wallets a little tighter they are still looking for entertainment and we offer it for free every day.

Selling CUME

One of the BIG CHANGES we face in selling with the new PPM Ratings system is the sudden advantages we have in Cume. On the other side of those advantages is the news that the AQH numbers are not as large as they have been with the old diary system.

In Arbitron's analysis of the Houston and Philly PPM data so far we are seeing HUGE Cume numbers that are a lot higher than we are used to seeing. Just look at the comparisons from Fall 06 comparing it to the diary Cume of Summer of 06 in Houston.

For years we've sold radio a lot more on frequency than we have on reach. The focus has been on how many people will hear my spot when it runs. In working with Cume the focus is really more on how many people will MY CAMPAIGN (the whole schedule) reach.

Getting the advertisers to understand that they are reaching a ton more than they imagined is a challenge. Look at the numbers here - the Cume for every station is DOUBLE what we see in the diaries and for many stations the Cume is close to TRIPLE.

The advantage here is that radio is really a MASS MEDIA. It reaches over 90% of the market and when you look at individual stations they all reach over 450,000 in Houston. In today's crowded media landscape is there any other outlet that you can go to and reach this many people? Not many if any outside of TV and when you consider that most have over 100 channels to pick from on the cable/satellite you have to buy a lot of stations to reach the levels radio delivers.

The news here really does make RADIO a great vehicle. But, we have to change the habits of the media buying community which is pretty point/AQH driven.

Why not start selling more with Cume numbers in all your presentations now???

Even if PPM won't hit your market for a couple of years you still have a lot more diary cume than you have AQH numbers. The more you start to use the Cume numbers the more the buyers and advertisers will begin to get used to them. Explain that these Cume numbers are way under estimated and reality is a lot bigger. Add a bullet point on the Cume - even if they typically 'don't care.' The more they see it, the more they will get their arms around it when PPM is in place.

Not in a PPM market? It's still important.

As buyers in regional and national spheres begin to work with PPM they will be shifting their focus to the Cume numbers for radio. Arbitron is doing it's part by mostly publishing the Cume figures in the monthly releases to the press.

How will the buyers work with 2 different systems - PPM and Diary? Will they have one set of parameters or expectations in PPM markets and different settings for the Diary markets? Maybe, but we will probably see 1 set of standards emerge here and the bigger markets will take the lead.

The sooner we start to 'prime the pump' for selling Cume the better off we will all be. Maybe including CUME in your presentations should be your New Year's Resolution in 08.

Entertaining The Audience

Making your radio station shine and deliver bigger audience's in today's world means more than having 'the 400 best songs from the 80s, 90s with 51 minutes of back to back music every hour.'

I can get that on my I pod, a billion Internet stations, and many other sources.

While traditional radio may offer it for 'free' (not counting the commercials) it's not enough to earn a P1 in today's media landscape.


We have to go out and actively ENTERTAIN the audience. All it takes is 3 basic ingredients to pull it off:

Ideas - They don't have to all be amazing - ground breaking - knock you off your feet ideas. But, you have to have a reasonable collection of on-air features, local events, audience participation vehicles, web attractions, and even sales tie ins.

Talent - A creative approach to the ideas. Sometimes that means the air staff executing it on air, other times it means producing it, and other times it comes from the creative juices in the promotion department. Brainstorm with your team every week and if you don't have a big team (maybe no team at all) collect some people from sales, production, or even the other stations in the cluster.

Organization - Having a promotion calendar is a start, but it's just scratching the surface. You need a much bigger view than planning a Valentines Day Date night at a bar. You need to look at everything from the music to the TV shows to the web sites to the community and more. If it's on the audience's radar you need to take a look at how to team up with it and even if it isn't you may want to work with it and put it on their radar. There are also lots of sales tie in oppotrunites with lots of the events and ideas, but you have to give the sales team time to circulate the idea, make sure to have your calendar set up months in advance for the ideas that have sales potential.

We have a lot going on right now with elections on the way, winter weather in may cities, big football weekends/games ahead, spring hopefully on the way, TV shows, movies, and lots of music news/releases to get involved with right now. What are your plans for St. Pats Day, Cinco de Mayo, the first day of Spring?

If you don't have anything going on this week MAKE SOMETHING UP. Maybe it's Pet Picture Day where everyone posts pics of their pets, the coolest leather - where people post their leather jackets on your site - or maybe a Commando Friday (the hell with casual days - let's go Commando). None of these ideas takes money but all of them could be entertaining with a little production and air staff magic. Integrate your web site, use the audience on the phone, - give the listeners something to talk about and have some fun with.

Often when we work on the entertainment factor with stations the issue of limited staff and budget comes up, often putting out the fire. It needn't be that way - you can do a lot with a small team, a simple idea, and a little radio magic.

The key is filling you your dance card with lots of ideas and making every day or week special. Let's go out and have some fun and entertain. If you're just pressing F10 on Selector and thinking the station is fine. Quit worrying about what you don't have and work with what you DO have.

Recession

Surely CNBC will have bigger ratings as economic issues are clearly taking the spotlight. Rising Oil, the mortgage lending mess, the weaker dollar and the high cost of the war are starting to all combine and head us close to or into a recession. Retailers are already expecting a weaker holiday spending session and we've already seen the auto industry struggle for most of the past year. It's also affecting radio as the results from 3rd quarter in radio are disappointing and in some groups it's more about 'just getting 07 over with' at this point.

So let's say we go into an official recession which would probably be declared after more than a few months of a significant decline of economic activity, according to the National Bureau of Economic Research. According to the NBER we've been chugging along for the last 7 years without a recession - look at the history of 'official' recessions for the last 60 years:

July 1953-May 1954 10 months
Aug. 1957-April 1958 8 months
April 1960-Feb. 1961 10 months
Dec. 1969-Nov. 1970 11 months
Nov. 1973-March 1975 16 months
Jan. 1980-July 1980 6 months
July 1981-Nov. 1982 16 months
July 1990-March 1991 8 months
March 2001-Nov. 2001 8 months

They are usually not that long and over the last 20 years we've only 2 of them lasting a total of 16 months.

I bring this up not out of a desire to give up radio programming for economics, but perhaps to help your team as you plan for 08 just ahead. We shouldn't let the 'R' word worry us even though there will be lots of 'hype' around it. We also shouldn't let the 'R' word spook our advertisers and the teams inside the stations.

Remember we sell advertising and there are always products and services looking to brand themselves regardless of the economic conditions. Actually a recession is the perfect time to build a brand. You will likely see less competition, less clutter around your message, and remember the audience is STILL THERE. Just because they may be holding their wallets a little tighter they are still looking for entertainment and we offer it for free every day.

Promoting With Sales - Good? or Bad?

We all know the scenario here. Programming doesn't have any big money for a book promotion and puts together an idea to give away a big prize. For this example let's say it's a motorcycle. So the sales team goes out and tries to cut a deal for a bike. Often we see the dealer, who was going to spend 15K over the Spring months on the station, decides 'let's just give them a bike and I've got tons of exposure' (probably more than 15K) and since the dealer only paid 10K for the bike he's got a real deal. So he cancels the 15K order and shines up the bike for the promotion.

Meanwhile the station loses the 15K he would have spent in spots and probably the sales team loses a pile of the commission on the deal. From the sales and revenue picture this doesn't look like a good deal at all and the Sales Manager, who wants to help the station, has to draw the line when he misses the budget and watches his sales people working on this deal instead of spending time on 'real revenue' potentials.

There is a way to make this a deal for the motorcycle shop, the sales team, the revenue line and the programming side, but you have to look at all sides and build a promotion that has bigger potential and can involve more than just the motorcycle shop. Every market and sales scenario will be different here, but look at this example of a promotion outline and the revenue potential:

1. Motorcycle - Walk in 4K from the promotion budget and INVEST it in the prize. Put together a package for 12K with the bike dealer and you will pay him 4K for the bike as well as do the promotion with at least 10K of advertising exposure for him from sweepers, remotes, liners etc. Now sales gets 12K in revenue, still 3K less than they hoped for but at least they get 80% of the deal and there's commission for the team.

2. Remote Package - Put together a remote package with a big send off for the bike at a big bar and then sell packages with lots of promos, a schedule and a remote. You can price it over the usual remote since you have lots of extra excitement in the promotion. If you have a launch promotion for 2K and 8 smaller remotes at bars, retail stores, etc priced at 1.5K now you have 14K in revenue over the month.

Sales gains by having extra value added incentives to pass on without giving away inventory from the spot logs. Sales also gains by having a potential of 14K more in revenue for the month. The Sales manager is now looking at the potential of taking that 15K order from the bike shop and turning it into 24K of revenue even after we pay 4k for the bike in cash. Programming can have an exciting promotion that's all over the community and still have that book promotion.

It takes more planning and advance thought and it's not as simple as filling out the order, but both sides (sales and programming) end up with revenue potential and on-air excitement that hopefully will drive some ratings boost.

I know that every deal may not work like the example in your market, but I think you see the concept. Also many of you already do this, but you've learned that advance planning, organization, and being careful with the details. I've also seen examples that reflect more of the beginning of this story - where everyone has just tossed in the towel.

It works best when the programming team and the sales team commit to working together and laying out a solid plan WELL IN ADVANCE. Now is the time to start thinking for Spring 08. You probably know the budgets at the station level and if you lay the foundation before the holidays you have just enough time to pull it off by April.

Does the Audience HATE Advertising/Marketing?

We often ask this question in various forms as we do perceptual research and it usually comes up - THEY HATE IT. It's also a big point as we compete with Satellite and Internet stations that have no commercials or very few in the mix. But, marketing and commercials are everywhere. You can't even walk through supermarket and stare at the floor without seeing billboards for all kinds of products. Signage is everywhere, commercials pop up all the time on you computer, they are tucked into movies, and of course they are on our radio stations. Hopefully enough of them to pay the bills and make a decent buck in the end.

I recently ran across a local article on a couple of Notre Dame professors who have been tracking the public's sentiments towards marketing for around 25 years - since the late 80s. They devised a questionnaire and have been polling around 1,500 consumers by mail and tracking their sentiments towards all the marketing. The report is called the Index of Consumer Sentiment of Marketing - ICSM. Professors John Gaski and Michael Etzel have published the survey every year. It's sort of like the University of Michigan's Economic Consumer Index which is watched closely by Wall Street and the Government to track how positive or negative we feel about the economy - only this survey tracks only marketing.

Over the years the survey actually points to a 20% improvement in positive sentiments towards marketing. There have been some ups and downs. In the late 80s as Regan cut taxes the sentiment improved, but fell in the famous Black Friday in 88. Over the 1st Gulf War the sentiments declined a little, but as we got into the dot com boom the feelings towards marketing improved. The fear after 9/11 pulled up the negative side, but as we recovered it's been slowly growing more positive over the last few years. When we feel secure with our wallets marketing takes less of a negative spin.

What really pushes the negative button in their surveys are false claims, too many disclaimers, bad service whey you buy the product, and truly annoying content. While we are receiving more marketing messages from every direction the negatives come more from the content and delivery on the promises made than it does on the frequency.

In the end what really drives negatives in marketing is bad commercials.

You can read more about the ICSM here.

5 Realities From PPM That Apply to EVERYONE

We are learning more and more about PPM and the audience's actual behavior, rather than their recall of what they did, with the early data from Houston and Philly. While PPM may be a long ways from impacting your market, or it may never come, but there are some 'real world' lessons to learn. This week I'll take a look at 5 Realities From PPM - covering 1 each day.

#1 - You Reach A lot More Than You Thought: We've see nearly everyone's cume jump a lot in comparing the diary numbers to the PPM realities in both Houston and Philly. Cume numbers are twice as big in PPM and in some cases nearly 3 times the size. Your station reaches a lot more of the market's audience then we ever thought. Holding on to that listening and turning that cume into P1s is the ultimate challenge for programmers.

One thought for everyone - PPM market or stuck with Diaries forever: You're on air marketing, imaging, and promotions reaches a lot more of the market than you thought. How many times have we all felt that we didn't have enough outside marketing to grow the station? No billboards, TV or direct marketing for long stretches.

Do you really need to use other media to grow your audience? Looking at the high cume numbers we see in the PPM data suggest that you probably already reach a lot more than you thought. Look at the cume for The Buzz or Arrow (the Alternative and Classic Rock in Houston) - the Buzz is over 1 million and Arrow is close to 900,000 in most montly reports. This is in a market of just under 5 million. These stations already reach 20% of the whole market. When you consider that they are targeted stations that are not designed to reach everyone they already reach a lot more 'real potential target listeners' for their music mix and stationality than you could probably get from a billboard on the interstate. How many people will 'cume' the billboard that are very unlikely to become P1 or P2 listeners? Probably not a lot and when you consider how much the board costs!!!

The answer for programmers here is to MARKET TO YOUR CUME ON YOUR AIR. Use your imaging, personalities, and promotions to keep the excitement up. Stay top of mind more often with your cume and more may become P1s or P2s. Crank it up on the air and make it memorable or actionable with the audience. Don't just go for 'small ball' all the time - hit it out of the park and do it as much as possible. "If we only had some marketing dollars" - shouldn't be the issue. Did we capitalize on the potential between the music and with our personalities? You probably don't need to spend lots of money to reach an audience you are already talking to, unless you are a brand new product or have made improvements that are so dramatic that a whole new audience needs to tune in and hear them.

Yes exposing the product all over the place can help - but the first steps to gaining more audience is to charge up the audience you have. Entertain them and keep them excited and entertained every quarter hour.

Internet Radio Listening UP 150%!!!!

This week we see in a release from JP Morgan that weekly listening to Internet Radio Stations or streams is up 150% growing from 20 Million weekly listeners at the start of 2006 to a new estimate of 30 Million. Revenue from streaming and the web sites that go along with the streaming stations is also up to 500 Million.

That's very impressive growth and likely to continue as more and more people find out how easy it is to tune in on the lap top or desktop. When you compare this media to all the talk and noise we have from the Satellite Radio camps you can see why there is talk of a merger of XM and Sirius. Right now the best estimates place satellite radio subscribers at 14 Million and the goal is to deliver 20-30 Million by 2010. Internet Radio has been quietly growing and is already past their 2010 goal. At this rate by 2010 Internet Radio would pass 80 million - well over double the Satellite Radio audience.

Now we add the news that the technology is available to turn your car into a WIFI hot spot and be able to full access the web as you drive down I-75 and we can easily imagine being able to tune into the whole spectrum.

Stop moaning! You're great radio brand already has a web site and you can (with a little work) stream if you are not already doing it. The audience is growing and streaming technology is getting easier to deal with every day. Just the other day I was listening to the Score in Chicago and they noted that over 4,000 were listening on the stream that morning.

We DO need to work out a settlement with Arbitron on getting credit for streams even if the commercial content is different due to the voice over compensation. Sooner or later the VO talent has to realize that their 'fight' over this will hinder the whole terrestrial radio industry and that they are being very selfish and endangering their whole lively hood. The ad agencies also need to see this writing on the wall.