Slow Upfronts Good For Radio, Says Interep

by Erik Sass, May 19, 2006, 7:45 AM

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Radio has a good shot at grabbing dollars held in reserve by major advertisers through the upfront season, according to radio ad sales firm Interep--although other media executives were quick to express skepticism about Interep's claim.

George Pine, Interep's chief operating officer, based his hopeful prediction on the radio industry's integration with digital media platforms over the last few years, which he said will allow radio to dip into the stream of ad revenue flowing to "new media" now being diverted from TV. "Radio in particular, in the face of growing mobile entertainment competitors, knew that it must embrace and partner with new technology or face the consequences," Pine recalled, adding: "I do believe that as an industry we're farther along in our integrated technology partnerships than most other traditional media." Interep also touted the easy integration of radio advertising campaigns and hot trends like experiential marketing.

"The fact that advertisers are beginning to reevaluate how they spend their ad dollars and save more money for the next great idea that walks in the door is very good news for radio companies," Pine asserted. "We're going to be pounding on a lot of doors over the next few months--and we have no shortage of great ideas."

But it's unclear what real competitive advantage radio wields over TV in terms of adapting itself to new media, since all the large TV broadcasters have aggressively pursued digital multi-platform strategies as well, including Web portals with video-on-demand and partnerships with mobile TV providers like cell phone companies and Apple's iTunes-iPod franchise.

Lou Schultz, the former CEO of Initiative Worldwide and now a media planning consultant, said: "I just don't see it. I don't think we'd ever see a big swing of dollars from television to radio. Network radio has a specific market, and frankly if it got just a 2-3 percent increase, that would be fantastic." Meanwhile, Schultz pointed to big differences between TV and radio ad sales: "Radio's sold locally, on a market-by-market basis, and that has nothing to do with the upfront. It's conducted year-round, so there's not the same sense of pressure."

Asked where upfront money is actually going, Schultz confided: "Everyone I've talked to is looking at other things--"I want to look at mobile; I want to look at VOD--more branded entertainment, things that can really be tied together." Noting Johnson & Johnson's decision to adopt a calendar-year buying schedule, Schultz explained: "A lot of people who are not spending are doing it for marketing reasons, not because it's too expensive. It's really a deeper change of strategy, not a change in the upfront itself."

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