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Radio Advertising: What Are They Really Selling?
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Radio Advertising: What Are They Really Selling?

There used to be a time when radio sales jobs were hard to come by. In the fifties, sixties and seventies sales reps working at top stations drove new Cadillacs, wore expensive suits, used a healthy dollop of BrylCreem in their hair and sold most of their station's inventory at the very beginning of the year. The rest of the time going on an appointment meant a three martini client lunch and counting commissions. There also weren't many women in the business. And all revenue came from straight spot sales, ie:, from selling air time.

Times have changed. First came the down economy 1989. Businesses by and large were cutting back on their advertising budgets in general. In order to compensate, radio stations put a huge emphasis on requiring reps to get new business on the air. This meant find accounts that had never used radio before and poaching clients from other radio stations. The days of the sloppy three martini lunches were long gone.

Around 2000 the internet came online and was obviously here to stay. Radio stations quickly saw selling banners as a new stream of revenue. So, they all built web sites. Some even formed special internet sales forces. Clients wanted to be online because they heard the internet was going to be big and thought a banner on their radio station's web site was crucial to their success. Most businesses did not even have their own web sites yet. Nobody was looking at metrics. To radio stations it was an "if we build it, they will come" atmosphere.

For a while that internet strategy worked. A lot of it was fueled by the Dot Com boom. These well funded but poorly managed disasters would buy anything, and lots of it. But when venture capitalists woke up to find they were funding Romper Rooms for inexperienced ego-maniac twenty-somethings, they pulled back their money. And that's when banner advertisers got nervous and canceled their contracts with radio station web sites.

Having tasted the wine, stations still tried to sell stand alone banners to no avail. So sales managers started requiring a banner be sold with every air time sale. In the industry it was called asking a client "if they want fries with their burger?" Nobody did. Banners frequently became added value as part of a radio deal. Management was beside themselves. Corporate shelled out a lot to build these web sites and all were making the same big sucking sound.

Mid-decade radio stations started looking to events to offset their lofty financial goals. Events were great because stations could sell all kinds of on site signage, sampling and display space along with a symbolic radio schedule packaged in. Even if a radio station had a lot of shortcomings, a good event with enough people could make the sale. So stations stepped up the amount of events they did per year. Again, radio was getting away from itself.

The problem was to do a good event took months of planning, up front costs and no guarantee the station will at least break even. So many radio stations moved further away from selling air time and began promoting other people's seminars.

For instance; an author would come to town with a motivational book wanting to do a seminar promoting his methods, thus selling his books, CD's and life size blow-up dolls of himself at the event. The radio station became an agent advertising the seminar at no charge and taking a percentage of gate, books, CD's or whatever the arrangement. Radio station reps were now responsible for putting rear ends in seats at hotel conference centers instead of advertising in peoples ears.

The events were profitable and most important turn-key. Many stations would milk the same goat several times a year. However they still had not tamed the internet beast and their web sites were there to stay. The bottom line is most radio station web sites do not do huge traffic numbers. They are local and really don't do much except tell you what song is playing and who's on the air. News station sites are a little more functional.

Furthermore, digital media buyers would not buy a banner for three-thousand dollars on their favorite station's web site anymore. The industry had grown up. Now they wanted a two-dollar cost per thousand, which meant the station would have to sell a banner for something like three-hundred dollars. Ever want to see a Station General Manager cry? They couldn't make money on the web at these rates.

Some savvy individuals in digital media saw this and started talking to radio station general managers. They explained how banners are bought via a network so they get low CPMs, an obscene amount of views and a good click-through ratio. They convinced radio stations to put clients who want internet advertising into "their" advertising network and split some of the revenue. Thus the client makes a "real" banner buy even though it has nothing to do with the radio station. Now many radio stations can and do go after straight web business. It's is like a TV station deciding to sell someone else's radio network for extra revenue.

Are we as consumers losing out because radio stations are basically running around in the pool with their eyes closed yelling "Marco Polo?" Not mortally wounded. But I think listeners can tell when a station is overtly pushing a seminar or event making sounding like they have sold their souls. And personally, I would not want to buy my internet from radio reps. Especially when most of their web sites have such low traffic they can't even qualify as part of the buy!

The thing that bothers me most is my sentimentality toward radio as a medium. I love radio for what it is. It's a versatile mobile media with a rich history. Instead of abandoning it, I wish the industry would look to program directors, promotions directors and talent to make their stations into places where people want to be and advertisers see value. I fear if they keep blurring the lines between radio and other media, stations will continue to devalue their medium. If stations keep focusing on deriving revenue from other non-related sources which they are not experts, they will eventually not be selling advertising as much as they will be selling themselves.


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