So what if they’ve never sold radio before – or even know much about it? What’s there to know? We have time and we have to sell it. Details get in the way.
Maybe that explains what I heard the week before Christmas on a Clear Channel-owned classic rock station in a nearby market during afternoon drive.
Every spot in the set I heard – minus one – was for a strip club. Sleazeball strip joints. The one exception? A bar promoting a wet T-shirt night.
For the station’s sake, I hope the business was cash up-front.
I pity the poor sales guy. He probably blew his meager commission on lap dances.
The annual Executive Summary from Borrell Associates show 2008 local on-line advertising up by 48 percent, putting it at $12.6 billion with much of it coming from local search and on-line video spots.
The report also says 2008 will present a challenge for old media - radio, TV and cable to newspapers –most which have their time-buy sales staffs also pitching non-traditional revenue on-line ads.
Radio is a business that terminates relationships with its top ratings and revenue air personalities in favor of non-local syndication or voice-tracking.
Yesterday, Radio Daily News.com readers voted “the fired and laid-off employees of Clear Channel, CBS Radio, Citadel, Emmis, Cumulus and other large, medium and small market radio stations who have devoted their immense talents to broadcasting,” its 2008 Radio Persons of the Year award.
Immediately following Radio Daily News publisher Larry Shannon’s announcement word came down from Clear Channel that Valerie Smaldone, the top-rated and best-known air personality at WLTW-FM was off the station after twenty-four year run.
She couldn’t come to terms with a new multi-year contract offered by Clear Channel.
Translation: she wouldn’t take a pay cut.
Valarie’s the third full-time veteran WLTW announcer to vacate the premises in the past six months. Do you detect a pattern here?
WLTW slipped from first to third in the New York Arbitron. Where do you think they’ll place a year from today?
Who said Clear Channel discarded its “less is more” campaign. They have far less employees today than they did six months ago.
You’re a better man than I, Gunga Din. Too bad you rhyme with has been.
Some companies worry about a brain drain while Clear Channel routinely practices brain dumping.
Let’s do a reality check.
These broadcast chains lost over 50% of their value in one year.
Citadel - Jan. 2, 2007 - $9.96; Dec. 31, 2007 - $2.06. (Wall St. viewed it as a positive that Disney unloaded ABC Radio – not the other way around. The same week Disney dumped radio, it bought Pixar from – there’s that name again - Steve Jobs.)
Emmis – Jan. 2 - $8.24; Dec. 31 - $3.85.
Entercom - Jan. 2 - $28.18; Dec. 31 - $13.69.
Radio One - Jan. 2 - $6.75; Dec. 31 - $2.34.
Spanish Broadcasting System - Jan. 2 - $4.11; Dec. 31 - $1.85.
Westwood One - Jan. 2 - $7.06; Dec. 31 - $1.99.
Salem just missed the 50% loss club by a prayer: Jan. 2 - $11.95; Dec. 31 - $6.59.
CBS fell $31.18 to $27.25. (True, there’s writer’s strike and the Katy Couric gaffe – but putting one in Joel Hollander’s back may have effectively tackled, at least temporarily, the downward spiral at the radio division.)
Clear Channel, which wanted to privatize by year end – but couldn’t - is down $35.54 to $34.52 – a price artificially inflated by the $39.90 offering price by BainCapital and Thomas H. Lee. There’s a deal that’s close to turning into a cut and run. If Bain and Lee cut their losses and back out of that deal – Clear Channel will be in free fall.
Theirs isn’t the only deal that could implode. The Merrill Lynch bull, already gelded by the credit and mortgage collapse, is taking a second look at the privatization deal they concocted with Cumulus. When they announced it in July, Cumulus was at $11.75. Last night it closed at $7.25.
Pump it and dump it? Radio’s been pumped and dumped to death. It forgot how to draw listeners and sell products for its clients.
Radio can’t just impugn the economy. Sales were bad when the economy was healthier. I know of many long-time radio clients that stopped advertising because they were not getting response from being 10th place in an endless spot set.
Then there’s production – where creative producers that could craft masterpieces for local clients – were fired and replaced by automatons that delivered tonnage and nothing more.
A few years from now we’ll look back at this time as radio’s golden age for rampant buffoonery.
I read an article in the Wall Street Journal’s weekend edition on Facebook. Here’s the condensed version: Three years ago Paul Thiel invested in an unknown social networking site, Facebook. Thiel’s venture capital company put a half million – that’s next-to-nothing in their world. Later, he invested a bit more. Its creators retained autonomy. Today, the value of Facebook increased over fifty times and the site now has over 59 million users.
Think about it. A radio chain could’ve made that very same $500,000+ investment for its future.
Math test: It takes roughly that amount to upgrade how many terrestrial stations to HD Radio? And there’s no future in that con where a dollar chases a dime.
Realize this. Radio was the original social network. Its diversity of formats brought like-minded people together and has been doing so since its inception. Whether it was sports, talk, or requests and dedications, radio was a provider of convergence. It could’ve easily built upon its inimitable position with the Internet.
With few exceptions radio was divided into two camps.
One assumed the Internet to be “the CB Radio of the nineties” (an exact quote from a top ten market manager in response to an observation I made regarding the emergent value of the web).
The other viewed the Internet as competition and felt it was radio’s duty to snuff it out.
There were several discussions I had seven, eight years ago with prominent radio people that couldn’t buy a clue regarding web-based social networking. When I suggested partnering with one, I was met with polite nods and smiles while their eyes glazed over.
Where would radio be today had it actively - not passively - utilized the Internet seven, eight, nine years ago?
The current radio-driven propaganda about the industry learning how to generate added revenue from the Internet is just that.
There are moves that must be made now to insure radio’s future. One is apparent: Invest in and marry the Internet. That doesn’t mean getting bailed out by Google or other on-line services for ad revenue. The Internet can be radio’s best friend for years to come. If ignored or used passively, it will be radio’s worst enemy. It’s that black and white.
Radio also has to learn – or relearn - how to program, market, and sell time in this brave new world. Marketing basics start with customer satisfaction, customer retention, knowing segmentation, building on brand loyalty, and providing clients with ROI.
Show me a naysayer and I’ll show you someone who fears change.
Radio deals aren’t in collapse solely because of the credit crunch. Once the fire sales begin, appraisals will become pragmatic – and when that occurs they’ll be smart money investing in radio, knowing that the medium can be revitalized. That will, in turn, draw the creative and innovative staff to revise the medium.
Maybe it will take Paul Thiel or others like him.
One thing is certain. You’ll be able to spot the real broadcasters. They’ll be the ones not wearing the clown noses.