The Most Broken Medium Of Them All
I love music and hate the radio.
How did those driving the medium let this happen? Save your breath blowing numbers announcing radio is fine. The cleaner a break, the easier to see -- and radio has suffered a clear compound fracture.
The issue is not radio's content format. There is a certain charm to hearing a familiar voice between songs of someone you can't recognize, and a heightened sense of excitement not knowing what will be played next. The break between radio and its listeners, however, has been caused by the ads.
Noncommercial listening options have opened the lid on Pandora's box for music-loving consumers. So while they may still be tuning into traditional radio, they now listen with a bad taste in their mouths. How long can that last?
The bitterness comes not just from having to endure ads -- but rather, from hearing really bad ones. Radio spots are the worst creative in advertising. Local in nature and situated lowest on the totem pole of creative directors, radio ads are so bad they are literally hard to listen to.
Combine this with the aforementioned commercial-free options, and radio has an obvious problem. The more ads that get sold, the more listeners leave the station. Further contributing to their own demise, radio stations continue to run these intolerable ads consecutively, as if to hold the door open for the stragglers who forget to bolt after hearing the first commercial.
This whole problem can be fixed, however, if radio continued to sell advertising, but stopped selling ads. Those driving radio into the ground need to abandon their current inventory model immediately and take a cue from the media around them to find their solution.
The medium that consistently hums through good times and suffers, but doesn't break, through bad times, is good old out-of-home. I am talking about the billboard guys. They figured out a long time ago it's easier to make more money by selling less inventory at higher prices. A billboard in a great location is only available for sale 12 months in a year. So as traffic estimates increase for that location in conjunction with advertiser demand, prices go up.
For all the technological ingenuity of online, Yahoo and the like make hundreds of millions of dollars a year by adopting this exact out-of-home model for their home pages. Sites have condensed billions of impressions of premium home page inventory into just 365 days a year. As demand for these "exclusive" daylong buyouts increase in conjunction with increases in "traffic" -- prices go up.
This is exactly what radio should do. Create daily exclusive sponsorship packages that creatively and tactfully weave one single advertiser into that day's program. Forget drive time versus prime time; just sell time exclusive to one advertiser by the day. Next, expand the content programming to cover the time vacated by eliminating traditional ads. Radio content folks will be ecstatic over this assignment and will likely deliver gems of innovation listeners will surely benefit from -- and voilà, time spent listening will increase.
Now it just becomes a question of what an integrated sponsorship looks like (or rather, sounds like) and what to charge for this daily buyout. Ratings of course factor into that, but so will the creative thinking of a radio station's marketing and sales force. Multiply this daily sponsorship cost by 365, see what the revenue capacity becomes at 100% sell-through, and start handing out quotas based on days sold.
Radio sales reps will initially balk at how this new cost has priced out the local car dealerships, fitness studios and hair clubs for men, which is what radio needs to do. Instead, radio sales reps need to head out into the market to drum up demand from a more premium crop of advertisers, relying on the allure of "exclusivity" powered by creative integration and "limited availability." As advertising demand increases alongside ratings for a much-improved listening experience, prices for these exclusive daily buyouts will go up -- and radio is back in business.
Is anyone aboard this sinking ship listening?