Commentary

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.

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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?

28 comments about "The Most Broken Medium Of Them All ".
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  1. David Koretz from Adventive, Inc., April 1, 2010 at 2:06 p.m.

    @Ari,

    Fantastic article, and some really interesting ideas.

    I hope this gets the response it deserves.

    DK

  2. Greg Mitchell from BGC, April 1, 2010 at 2:10 p.m.

    This type of day and daypart solo sponsorship was tried in the Dallas Market, and lasted less than a year. It's a throwback to radio's golden-age and has a lot of merit, but so few could afford. Yes radio needs to be fixed, but in at least one top 10 market, this was not it.

  3. Nancy Shaver from experian, April 1, 2010 at 2:16 p.m.

    LOL-- I believe the author might have heard NPR??? But didn't notice that a large part of the revenues come from memberships rather than ads.... Remember, at the end of the day the revenue equation has to work.

  4. Matthew Mcnulty from Early, April 1, 2010 at 2:33 p.m.

    ok... everything up to now was suppose to kill radio... but nothing has... ads maybe bad but terrestrial radio is still here and sirius/xm is hanging on by a thread... predict that

  5. Jon Levy from Hype Circle, April 1, 2010 at 2:44 p.m.

    Great idea in theory. And I think that radio would be way better if it worked like that. But radio stations don't have the luxury of changing the rules for their advertisers. They often operate in highly competitive markets- dealing with a 100 year-old agency buying infrastructure that is not likely to embrace change.

    If one station (or even one conglomerate of stations like CBS etc.) tried it, no doubt the short term loss of business would be catastrophic.

    To bad, but then again, sometimes it takes a catastrophe to force great change.

  6. Mark Lewis from Lewis Media Solutions , April 1, 2010 at 2:44 p.m.

    The way you did business yesterday is certainly not how business should be done today and will not be how business is done tomorrow. Yes, radio has a problem right now. Poor creative messages often followed by unimaginative and predictable content. Radio will survive but the "game plan" requires change. The commercials need to be stories that provoke imagination. Never mind the tired "Sales Manager is in Las Vegas and we need to sell 40 vehicles this weekend". Is this really believable? I thought not. Radio is local and has a following. Strive to make local radio interesting and a medium local listeners can trust and rely on. Or if decreasing sales is what you'll accept....do nothing. Don't invest in your radio product and people. Just continue to conduct your radio business the way you did yesterday.

  7. Dawn Pepka from Entercom, April 1, 2010 at 2:46 p.m.

    Ari,
    Working in radio you may consider my opinion bias, however at KDFC in the Bay Area I work with a very talented and highly creative team which takes pride in the production effort for every client. Secondly, although I believe your article asks an interesting question, it lacks research, i.e. Dallas and you may want to review Jim Cramer's recent thoughts on radio at http://www.cnbc.com/id/36020397.

  8. Walter Sabo from HitViews, April 1, 2010 at 2:53 p.m.

    Good article because it is getting good response. You would be a good talk show host.

    Radio creative is no better or worse than 10-15! unit spot clusters on cable. Yes, 15 units on cable in a cluster, count em. And those local spots are horrible too.

    How about the graphics in most newspaper ads?
    And banners flashing that say they "You're the 1 millionth person..."

  9. Ari Rosenberg from Performance Pricing Holdings, LLC, April 1, 2010 at 2:53 p.m.

    Matthew, that's my point -- Sirius/XM should be selling exclusive daily sponsorships too! -- radio may linger but NO ONE is listening to the very ads being sold today.

    Why do you feel compelled to defend radio's current ad sales format when it is clearly bleeding consumer attention?

    Greg, that's interesting -- my bet is that they bailed too early on the right solution and ran back to what they knew best -- selling low cost advertising to poorly created ads -- no one wins in that scenario except those working there who hold onto their jobs a little longer...

  10. Joshua Chasin from comScore, April 1, 2010 at 3 p.m.

    I also love music and hate radio.

    I'm not sure I draw the same conclusions abour radio's problems though.

    If you ask 100 radio people what the biggest benefit and selling point of radio is, I'd guess 95 of them would list localism in their top-3 responses.

    But radio has no localism at all. In fact they have boiled everything regionally distinct OUT of radio-- including using the exact same formats and (limited) playlists in every market, having the same generic on-air talent doing multiple markets at the same time, etc. The one thing I can tell you as a consumer is that radio sounds exactly the same no matter where in the US you listen to it. Sure, in NY and LA you'll hear more Spanish language; in the bible belt, more country. But while format distribution might vary by market type, across markets within format radio sounds exactly the same.

    Can anyone really point to something new and creative that happened in terrestrial radio content over the last 15 years? It's wall to wall junk food for the ear, the media equivilent of a burger in a box. By speaking to the lowest common denominator, radio now speaks to no one. Look at listening trends since 1990 for teens and 18-24 year-olds; young people just don't listen anymore. And if you don't listen to the radio by the time you're 24, lelt's not kid ourselves-- you never will. Like the newspaper, radio's audience is dying, and each year a new wave of babies is born who will never listen. Radio is a goo 20 years into this death spiral.

    Right now, I would suggest that terrestrial radio is a medium for old people and poor people to listen to in cars. Thanks to the Internet there's no reason to listen anywhere else, and the young and/or affluent know how to plug their iPods into the car stereo (or subscribe to satellite.)

    If the medium is to have a future, radio has to figure out what its value proposition is to the consumer, today and going forward, and then find ways to deliver compelling content to its audience that delivers on that proposition. (Is that proposition localism? If so, then for heavens sake create localized content. If it's something else, find and execute on that thing.) Otherwise, radio has even less going for it than the newspaper (with which, at least, you can wrap fish and line bird cages.)

  11. Ari Rosenberg from Performance Pricing Holdings, LLC, April 1, 2010 at 3 p.m.

    Walter -- you missed one critical point -- the prevalence of NON commercial options are greater when it comes to listening to music versus watching television or reading the newspaper.

    Jon -- you get it and I know this is a BIG ask but it's the right call -- what company has the guts to make this change becomes the question and my sense is the answer is none of them....

    Dawn -- your opinion matters greatly and I will give that a read -- thanks for sharing -- but I am not gonna back down from my conviction here -- NO ONE listens to radio ads -- how much longer can that last????

  12. Kelly Maher from CBS Radio, April 1, 2010 at 4 p.m.

    As a 30 year radio vetean that loves the medium (and it's revenue extensions such as event sponsorships and digital) as much today as I did 30 years ago... I have to say that I agree that there is still much radio commercial creative that leaves a lot to be desired. However, Ari, your solution is by no means customer-focused or problem-solving in nature. And THAT is the reason that radio is still successful and viable. Those annoying commercials DO work. We generate results for clients by listening to what their needs are and designing both an effective radio schedule and compelling creative.

  13. Ari Rosenberg from Performance Pricing Holdings, LLC, April 1, 2010 at 4:23 p.m.

    Kelly,

    How can you say my solution is not customer focused -- and by customer I know what you mean -- the ADVERTISER-- in my suggested approach, you give your advertisers 100% share of the listeners attention -- NO other advertiser to compete with on that day -- that opens the door for folks like yourself to creatively weave an ad message in and around the content that does serve the client's best interest -- right now you are selling them on a dream that people listen to these awful ads and they just don't.

    "Annoying ads are working" which is why "radio is viable"?

    Defending a current practice instead of exploring the obvious need for a new one is why radio will continue to slip slide away -- have you seen the recent revenue numbers reported here on MediaPost?

  14. Caswell Forrest from Pinpointadvertising, LLC, April 1, 2010 at 4:31 p.m.

    Ari,

    I have heard this tired argument since 1984. Production people at TV and radio stations have their bias about "good creatives. etc....." but I work in direct response, the most despised industry in the eyes of station program directors.

    Bottom line ads work, they cause CONSUMER action and results for the advertisers, which in turn creates revenue that pays for the airtime. We can talk all day about how destructive ads are compared to continuous music but until you can prove betterment by numbers- this is ALL talk.

    The model you suggest is almost the same as product placement in the movies or TV. That could be more annoying to consumers that the honest "upfront" approach: I am an ad and BUY my product!

    Cheers-Caswell Forrest

  15. Fraser Elliott from Opinions expressed herein are solely my own, April 1, 2010 at 6:17 p.m.

    The challenges of radio go way beyond the dreck that serves as much of its creative. Station ownership as a whole has made decisions in the name of cost instead of value, and what you get is the same playlists generated by the same few programming directors listening to the same few focus groups. Differentiation and localization are going away, and listeners can feel it.

    Then, yes...the creative. How many apoplectic, shouting ads for car dealers and mortgage companies can a listener stand before he says "screw this" and plugs in his ipod or just turns the thing off?

    The patient is far from dead, but the caretakers sure are trying their best to harvest the organs instead of prescribing a recovery.

  16. Cece Forrester from tbd, April 1, 2010 at 7:05 p.m.

    I'm not sure this is the solution, but there doesn't mean there isn't a problem.

    Like many things in economics, those who say "these ads work" can see one side of the equation. Call it a blue-sky metrics dream, but if stations had perfectly granular data on how many people dive for the off button or switch stations when the obnoxiousness starts in and they can't take it one more time, the situation would change in a hurry. The yelling...the intelligence-insulting snake-oil pitches...the synthetic voices and artificial splicing...the pseudo-governmental "public announcements" and fake instructions for when to call...the extended fast-mumbling disclaimers...phone numbers repeated too many times with no words in between...you could prove these things chase away listeners. Wouldn't it be great if the commercial pricing model factored in compensation for audience erosion by the particular advertiser? Orkin-quality creative (like the cleverly satirical spots for a bank that I could listen to all day) would probably earn a discount.

    The reason the bad spots on cable don't do the same kind of damage is because we have TiVo for that.

  17. Paula Lynn from Who Else Unlimited, April 1, 2010 at 8:54 p.m.

    Hey guys! Talk radio and sports talk radio (2 dif really) is still radio whether you like the format or not. What happened here? And most of all of what you are saying is all right, except for the entire sponsorship route. That completely locks out the smaller local advertiser chasing them to DM or local papers which is in their budgets. As for creative, no doubt there are some great stuff, but for the most part, in the last 10 years dribble has been drabbling from the entitlement on line arena of 20-30 somethings.

  18. Fred Leo from Ad Giants, April 1, 2010 at 11:34 p.m.

    The day sponsorship is an interesting thought for big brands or big local fish, but it could be a problem (too expensive) for advertisers trying to build awareness through the week for specific events. Beyond that, I think it's entirely possible listeners would tire of one advertiser all day, no matter how good the spots are, and actually tune out over time. Great radio spots, few and far between as they are, will eventually lose their magic when rotated relentlessly. Still, as an occasional option, maybe once a week for a test, there might be something there. It would certainly inspire the advertiser to generate better radio spots since he knows the spots are center stage. It's sad that so many radio spots are so awful. They're affordable, and the playground is the entire theater of the mind. One would think it would be one of the best mediums creatively, but instead that very affordability seems to encourage advertisers to hold radio in low esteem. Beyond that, there is some blame in the programming. One shouldn't be able to listen for an hour or less and know you've basically heard the entire day.

  19. Jerry Foster from Energraphics, April 2, 2010 at 3:08 a.m.

    Great article. But the hokie aspect of radio is what I always loved about it. It brings me back to Earth to hear ads for local restaurants with hokie jingles.

    In fact, the best memories of my childhood have those hokie jingles attached to them, such as being on the beach and hearing them on a tinny transistor.

    I remember the local drive-in advertising the most on the radio as a kid. It was so amateurish. I miss it a lot.

  20. Kelly Maher from CBS Radio, April 2, 2010 at 9:37 a.m.

    Ari - your approach is focused on only ONE customer per day. How can we truly position ourselves as helping advertisers grow their business when I tell a struggling car dealer that he can't advertise on my airwaves on a Friday because one of the other 200+ dealers in Atlanta has locked out all Fridays. How can I say the same to a nightclub promoting their Saturday night that they can't have Saturdays because someone else grabbed them first? I would be sending a huge portion of my advertisers to my competition... in radio AND other mediums! Not to mention the tune-out factor of listeners hearing creative for the same advertiser all day long?
    I agree that we all need to focus on demanding better creative. But your approach is way too radical.

  21. Ari Rosenberg from Performance Pricing Holdings, LLC, April 2, 2010 at 10:59 a.m.

    Kelly, that's the exact pain point you want to bring to the market -- it will actually cause your advertisers to reserve days in advance so they don't get "shut out" and it will give you immense leverage to charge a premium price for these exclusive sponsorships -- as for "creative wear out" -- I am not suggesting the advertiser who owns the day runs twenty of the exact same :30 spots -- but rather, is tactfully presented as that day's sponsor -- which can include multiple creative touch points that will increase brand awareness and not cause creative wear out -- hell yes this is a radical approach -- which is what radio needs but as Fred Leo suggests, you could start by offering "every Friday" for example as an exclusive buy out and as demand goes up for that -- you extend to other days -- appreciate your thoughtful response Kelly even if we disagree :) --

  22. Tony Anderson from Incline Video, April 2, 2010 at 2:45 p.m.

    Good one Ari!

    Reminds me of the chorus in a song I've heard one or twice:

    The Ravyns - Raised on the Radio:

    "I was raised on the radio
    Yeah I was raised on the radio
    Just like an all-american boy
    I've got my favorite toy!"

    TonyJAnderson@Gmail.com

  23. Paula Lynn from Who Else Unlimited, April 2, 2010 at 7:02 p.m.

    Ari, someone should throw you a phone book in a territory to call on small businesses being income dependent on this system. You'll learn rather quickly how insane a one client per day is.

  24. Ari Rosenberg from Performance Pricing Holdings, LLC, April 3, 2010 at 9:32 a.m.

    Paula and the others who would prefer to defend radio's current approach and attack my solution -- thank you -- that's how we get somewhere -- but let's all agree with the underlying thesis:

    Radio ads are generally bad -- and bad ads that appear consecutively in a pod must be causing more harm now than before ipods, iphones, pandora, and other options permeated the listening ears of consumers. You can't convince me the radio listening audience is sticking around for the ads at all -- and this disappearance isn't always reflected in ratings or audience research is it?

    My idea/solution is radical -- I get that. But a station can start with a modified approach -- offering every Monday, Friday and the Weekend in this exclusive manner, and if an advertiser cant afford a day to themselves, they can buy ads Tuesday through Thursday just as they do now -- but the second a Mercedes dealership buys up a bunch of Fridays and Weekends, you can bet the Lexus dealership will be calling.

    Thanks for "throwing the phone book" Paula -- I am sure if we met you would hand it to me instead :)

  25. Ronald Stack from Zavee LLC, April 3, 2010 at 11:27 a.m.

    I have been considering radio as part of our consumer launch in South Florida and this post reminds me why I am so reluctant. I look at my fellow commuters on I-95 and I want to imagine them listening to terrestrial radio and not changing stations when the ads come on, but I don't really believe it. I know that I could buy the talk formats but the demographics (to say nothing of the price) aren't quite right and I still don't believe the audience isn't tuning away from the ads - I do. I guess I could buy midday inexpensively and pick up consumers listening in stores and offices, but I don't think that audience is very large anymore.

    Ari's buyout idea would price me out but what about sponsored content? Sports broadcasts do this, sometimes to extremes, but it's a model I'd consider. ESPN Radio has Subway as a national sponsor of its call-in line for guests (the "fresh take hotline" - oy). Something like that on a local level, where the brand message isn't such a stretch? Maybe.

    But buying drivetime on local stations with my spot surrounded by horrible creative that no one listens to anyway? I just don't see it.

  26. Caswell Forrest from Pinpointadvertising, LLC, April 5, 2010 at 1:18 p.m.

    Do any of you track the results of your advertisements? All I read here is the creative is BAD, but results are GOOD right? So what is your bias, something that appeals to your taste, or something that sells? Statistics show that 75% of radio listeners are in their auto when they listen-they are trapped and many of them are busy driving, not switching a TIVO channel. These "bad ads" are playing and heard-people are buying the products and services. Do you have an objection to brainwashing? What are jingles? What are repeated ads no matter how tasteful or woven into a one-client continuous music format? It is ALL the same, just different degrees of approach. The radio audience is shrinking because of media fragmentation-more choices of what to do while driving. Don't worry about radio until we come up with another way to get from one place to another.

  27. Fraser Elliott from Opinions expressed herein are solely my own, April 5, 2010 at 6:33 p.m.

    So tell us, Caswell...how many hours a week do you spend listening to terrestrial radio? Tell us with a straight face that you don't have Sirius/XM or an ipod plugged in when you're in your car, and keep that poker face going when you tell us you that when Ray Vinson's mortgage company ad comes on again, you practically have to pull over just to catch every detail, because you love it so.

    You got it right...the radio audience is being affected by fragmentation and by choice. But the choice being made is to not listen to dreck. If there were less dreck, there would be less temptation to seek alternatives, and there would be more listeners.

    Notice I'm not arguing with the success metrics of dreck as far as its producers and promulgators are concerned. I'm sure you're laughing all the way to the bank...but at what cost to the medium?

  28. Caswell Forrest from Pinpointadvertising, LLC, April 6, 2010 at 1:43 p.m.

    I don't listen to the radio while I drive. I do not have an IPOD podding, and I am not wasting my money on Sirus radio. But these are my preferences, plus I choose to pay attention while I drive both visually and audibly. It does not matter what I choose to do....I am one speck of media-sand on the large beach of media listeners. And the listeners listen, they respond, and keep the radio station doors open. My objection to allot of what is said here is many comments are by media people who have sophisticated tastes and trained ears PLUS knowledge of the medium. These comments are insightful but not always in touch with the MASS or large fragments of listeners. When I see the numbers/results that speaks to me not only in dollars but in marketing sense. So go ahead and weave one sponsor into uninterrupted music, subtly place messages that ultimately will pay-off for the sponsor and increase listener-ship, if this produces revenue and WORKS then I am your greatest cheerleader!

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