As traditional radio faces a potential major issue with new Internet streaming royalty rates, the industry should do its best to fight the good fight because there are new companies launching business models every day, it seems, that will help traditional radio get technologically cool.
I'm referring, of course, to some of the new portable digital radio businesses that allow consumers to use their cell phones for more than just phone calls and email. Audio entertainment is rushing headlong to your hand-held phone devices and traditional radio as well as the consumer is the beneficiary.
Imagine being able to stream a customized radio station you create right to your cell phone and listen on high-quality ear plugs or headphones. I've tried it and you'd be amazed at how good it sounds. Now there is an option for consumers who love their MP3 players while jogging, for example, but want a different blend of music or, based on what you program, a completely new vehicle for music discovery, one of traditional radio's new-found strengths.
Imagine being able to time-shift your favorite air personality! I can't count the number of times I've been driving to an early morning appointment only to arrive at my destination right in the middle of a great talk radio segment or a funny-as-heck bit on the Kevin & Bean show on LA's KROQ! I'd love to sit in the car and listen through, but just can't. So, just like a TIVO device for radio, I can go back to that show later and pick up where I left off! Ain't technology grand? We certainly do live in an amazing time.
And there are more applications being introduced all the time. The key here is that traditional radio, even with all the recent woes that seem to crop up in misguided newspaper articles, is being served a glorious plethora of opportunities that can extend its life - even enhance its reach - and make it cool again. Just what the doctor ordered.
If you're running a radio group or know someone who is, make sure you're aware of all the ala carte opportunities that are being placed before you. Don't hesitate. Get on track to adopt these new technologies and take advantage of the genius that is out there thinking faster and smarter than you are.
After all, you never know what they'll think of next and you want to be out in front of it - whatever it is!
Wednesday, March 14, 2007
Wednesday, February 28, 2007
Open Letter to Radio CEO's
Are you working for or running a financially oriented organization? If so, you may be headed for trouble. Finance provides the capital to fund business development and tracks the results of operations, but it doesn't have that much to do with what comes in between. The bottom line is on the bottom for the simple reason that it is the result of operations, not the cause. Yet many managers focus on bottom-line financial results and thereby fail to manage the things that drive those results.
How do you know if you or your organization is overly financial in orientation? The most obvious clue is that everybody is held to "the numbers". That's how managers are evaluated, that's what the boss always wants to talk about, and that's what everybody manages for. If you find that you or your people are obsessed with "making their numbers", then you know you have a financial orientation. And while financial management needs to be a core activity in the organization, it cannot be permitted to displace other forms of management.
People and organizations that manage by the bottom line never perform as well in the long run as those that focus on the causes of bottom-line performance. An orientation toward your employees, customers, technologies, and business processes is much more likely to produce good bottom-line results.
Let's look at a real-life example. Radio group "X" hires a new GM for its major market cluster of 5 stations. This person is tough. That's why he was hired. This person insists that his sales managers make their numbers, even though the sales goals they were given were unrealistic. And so, these sales managers - constantly pressured to make their numbers did so - by "loading the trade" or unrealistically overselling the commercial unit limits, under pricing, throwing in "value-added" promotions that the programming department could not live up to and using other aggressive sales methods. The numbers that were seen by this new market manager looked great and subsequently they were passed on up the food chain to corporate. Confidence was high. Then it hit the fan.
Commercial inventory was so oversold and there were not enough cancellations 30% of the projected revenue evaporated. The lower priced spots that were sold and did get on in high-revenue day parts like morning drive did not enable the station to achieve budgets. So much for rubbing people's noses in the bottom line. It just doesn't produce long-term results.
Financial statements offer one of many possible views into the inner workings and end results of a highly complex business process that is itself a small part of a complex economic and social system. If you focus only on the bottom line results in your financial statements, you will be managing in the dark because you won't seek out and understand the variables that drive your systems.
How do you know if you or your organization is overly financial in orientation? The most obvious clue is that everybody is held to "the numbers". That's how managers are evaluated, that's what the boss always wants to talk about, and that's what everybody manages for. If you find that you or your people are obsessed with "making their numbers", then you know you have a financial orientation. And while financial management needs to be a core activity in the organization, it cannot be permitted to displace other forms of management.
People and organizations that manage by the bottom line never perform as well in the long run as those that focus on the causes of bottom-line performance. An orientation toward your employees, customers, technologies, and business processes is much more likely to produce good bottom-line results.
Let's look at a real-life example. Radio group "X" hires a new GM for its major market cluster of 5 stations. This person is tough. That's why he was hired. This person insists that his sales managers make their numbers, even though the sales goals they were given were unrealistic. And so, these sales managers - constantly pressured to make their numbers did so - by "loading the trade" or unrealistically overselling the commercial unit limits, under pricing, throwing in "value-added" promotions that the programming department could not live up to and using other aggressive sales methods. The numbers that were seen by this new market manager looked great and subsequently they were passed on up the food chain to corporate. Confidence was high. Then it hit the fan.
Commercial inventory was so oversold and there were not enough cancellations 30% of the projected revenue evaporated. The lower priced spots that were sold and did get on in high-revenue day parts like morning drive did not enable the station to achieve budgets. So much for rubbing people's noses in the bottom line. It just doesn't produce long-term results.
Financial statements offer one of many possible views into the inner workings and end results of a highly complex business process that is itself a small part of a complex economic and social system. If you focus only on the bottom line results in your financial statements, you will be managing in the dark because you won't seek out and understand the variables that drive your systems.
Friday, February 23, 2007
The Truism of Knowing Your Audience
It's becoming more and more difficult to target consumers with advertising. Just ask former and current clients of traditional media. The concept of cohorts, defined as a group of subjects - most often humans from a given generation - defined by experiencing an event - typically birth - in particular time span, is one of the reasons. The splintering of audience and the scattering of their media consumption is at the heart of the advertising challenge.
Bridge Ratings has spent considerable time and money studying one of these cohorts - Gen-Y - over the past five years and have what we believe to be a fairly honest and eye-opening understanding of this group's media interests and needs and the best way for advertisers and content producers to reach them. (Gen-Y typically refers to those born between 1981 and 1999).
We've also been one of the few research organizations to dissect the podcast universe. After a rocky start and terrestrial radio's quick acceptance of the medium, podcasting is gaining ground as a viable manner to extend its reach, solidify its brand and improve its distribution. While there are certain roadblocks to the medium's expansion to a significant percentage of the masses, podcasting - or netcasting - is becoming one of the advertising solutions in reaching the hard-to-reach Gen-Y.
Fellow research firm eMarketer estimates that advertisers will spend $400 million on podcast advertising by 2011 - up from $80 million last year. And there have been numerous articles written about advertising solutions to reach Gen-Y on MySpace, YouTube and other such media where Gen-Y congregates. Yet, none of the 'experts' in advertising seem to know this audience well enough to make that $80 million or $400 million effective.
Based on what I've learnt when experiencing the advertising on these Gen-Y gathering spots is that commercial content, production and length seem generally not to be customized to the tastes of those that are trying to be reached. We understand through out Bridge Ratings work that 'commercials' of virtually any kind are potentially a turn-off to this hard-to-reach cohort and they will even give up or use less their beloved MySpace or YouTube if commercialization gets in the way of their experience. But there are ways to make it work - ways that have been suggested by the Gen-Y peers we study.
The point here is that billions are spent on advertising to try to reach Gen-Y and there is a growing interest in podcasting as a platform for such things. But all of it will be so much dust in the wind, ineffective audio or video, if clients, agencies and producers don't take the time to know this audience.
Through the years, understanding the consumer has always been at the forefront of marketing. Today, however, more than ever, knowing your audience is a critical component to being effective with advertising - even to the point of having your target audience fully embrace the product and its benefits.
Bridge Ratings has spent considerable time and money studying one of these cohorts - Gen-Y - over the past five years and have what we believe to be a fairly honest and eye-opening understanding of this group's media interests and needs and the best way for advertisers and content producers to reach them. (Gen-Y typically refers to those born between 1981 and 1999).
We've also been one of the few research organizations to dissect the podcast universe. After a rocky start and terrestrial radio's quick acceptance of the medium, podcasting is gaining ground as a viable manner to extend its reach, solidify its brand and improve its distribution. While there are certain roadblocks to the medium's expansion to a significant percentage of the masses, podcasting - or netcasting - is becoming one of the advertising solutions in reaching the hard-to-reach Gen-Y.
Fellow research firm eMarketer estimates that advertisers will spend $400 million on podcast advertising by 2011 - up from $80 million last year. And there have been numerous articles written about advertising solutions to reach Gen-Y on MySpace, YouTube and other such media where Gen-Y congregates. Yet, none of the 'experts' in advertising seem to know this audience well enough to make that $80 million or $400 million effective.
Based on what I've learnt when experiencing the advertising on these Gen-Y gathering spots is that commercial content, production and length seem generally not to be customized to the tastes of those that are trying to be reached. We understand through out Bridge Ratings work that 'commercials' of virtually any kind are potentially a turn-off to this hard-to-reach cohort and they will even give up or use less their beloved MySpace or YouTube if commercialization gets in the way of their experience. But there are ways to make it work - ways that have been suggested by the Gen-Y peers we study.
The point here is that billions are spent on advertising to try to reach Gen-Y and there is a growing interest in podcasting as a platform for such things. But all of it will be so much dust in the wind, ineffective audio or video, if clients, agencies and producers don't take the time to know this audience.
Through the years, understanding the consumer has always been at the forefront of marketing. Today, however, more than ever, knowing your audience is a critical component to being effective with advertising - even to the point of having your target audience fully embrace the product and its benefits.
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