I’ve solved the flat radio revenue puzzle!

For some time now I’ve been pondering why major market radio is crying the blues, but many small and medium sized markets are doing just fine, thank you.

Of course, soft major market revenues have a huge statistical impact on total radio revenues across the country, creating the impression the entire industry is hurting.

And this perception can actually cause complacency in the smaller markets that begin to believe that modest increases are a win when compared to flat national averages.

At the risk of offending some, I can tell you one of the reasons major market revenue growth pales compared to many small and medium sized markets.

For years, major market stations have been selling against radio. You know that’s true. Available major market radio budgets were so lucrative, that stations were content just selling against other stations…fighting for share of available radio dollars rather than generating new radio dollars or bigger radio budgets.

Some even measured their success by share of radio budget, rather than share of larger marketing budgets.

Now those same stations are opting to increase their sales by fighting for share of growing digital budgets. However fighting for share inevitably puts downward pressure on rates, and does not contribute to the health of our industry.

Small and medium sized markets have had no huge radio budgets from which to divvy up share. They’ve had to sell radio to advertisers who had no radio budgets and had no intention of using radio.

Imagine that, selling radio against other media instead of selling against radio. What a concept!

For those not yet ready to sell more radio, and who are content to pick up some left-over crumbs from digital budgets, I have a warning. My friends in digital media pure-plays are discovering, particularly in the last 3 to 6 months, that the digital media platform has become so crowded and confusing they are beginning to experience extreme downward pressure on rates, causing profits to sink faster than the Titanic.

Don’t misunderstand me. I think it makes perfect sense to capitalize on the relationships we have with radio advertisers to skim a share of their digital budgets as well.

Ultimately, we need more radio advertisers from which to leverage those relationships in order to sell more digital, more special events and sponsorships.

If your stations are eager to sell more radio, we should talk.

Reply to this ENS on Sales email and we’ll make an appointment to discuss how we can help you sell more radio.

Over 60% found designing a social media strategy, and making social media data actionable, to be challenging as well.

And these are the full time professionals!

Think how difficult it is for your local business owners to understand and use social media part time amidst renewing their leases, ordering their Spring merchandise, hiring and training staff, and fighting with the tax man.

In today’s media world, you can be a genius, literally. Alfred Einstein defined genius as “Making the complicated look simple.”

Radio account executives can offer simple turnkey solutions to local advertiser’s problems. All the advertiser has to do is say “yes”, and you do the rest.

You analyse the advertiser’s situation with your CNA (customer needs analysis), you create a strategy based upon that analysis, and implement tactics from creating effective schedules within the advertiser’s budget, to creating and producing messages to increase their sales.

So there you have it, genius. In the knowledge economy, knowledge is currency, and you are perfectly positioned to help your clients solve their advertising problems with simple turnkey solutions.

Never under-estimate the value of the solutions you deliver.

Click here to arrange a no obligation demo of how we can help you be a genius in your market in 2015 and beyond

How popular would Santa be without his smile and his Ho…Ho…Ho?

And how famous would the Mona Lisa be had she been painted with a frown instead of that knowing smile?

Studies in neuroscience, anthropology, and psychology all confirm the powerful of influence of smiles.

Telephone solicitors know that their closing ratios actually improve if they smile during their pitch even though the person on the other end of the conversation can’t see their smile. If you can make your customers smile, you are actually more likely to make a sale.

British researchers found that one smile can generate the same level of brain stimulation as up to 2,000 bars of chocolate.  And, unlike lots of chocolate, lots of smiling can actually make you healthier. Smiling can help reduce the level of stress-enhancing hormones like cortisol, adrenaline and dopamine, increase the level of mood-enhancing hormones like endorphin and reduce overall blood pressure.

And if that’s not enough, smiling can actually make you look good in the eyes of others. A recent study at Penn State University found that when you smile, you don’t only appear to be more likable and courteous, but you actually appear to be more competent.

Radio is the smile media. From uplifting music, to fun on-air contests and the humorous voice of personalities, we make your customer’s smile every day. What a great environment in which your advertisers can tell their story!

Do you smile for both of your customer groups? Your external customers,  i.e., your advertisers, and your internal customers….the people you have to work with at the station to get the job done.?

Why do so many radio ‘package’ offerings default to discounting their spot rates?

Smart packagers create premium packages as a way of taking the focus off of their base product pricing.

Take BMW, for example. When BMW offers their ‘sport package’, customers do not question the basic BMW price, and are left to negotiate on the much more profitable ‘options’ portion of the sport package.

Each option, like sport wheels, spoilers, tuned suspension, sport seats, steering wheel and low profile tires, by themselves cost a fortune.  But as a ‘package’, you get all of them at a discount while paying full pop for the base automobile.

In radio, our station promos, digital properties, sponsor credits, on-air contests and other elements of our programming should actually be priced with huge margins because they are not perceived as ‘commercials’ or programming interruptions by the listening audience.

When you ‘package’ this high-margin inventory at a discount rate, you can take the focus off of discounting the spot rates in your ‘package’.

The packaging guidelines we use at all of the stations we consult include;

1.) All packages should be priced at a minimum of ten percent over your average invoice price. The amount of your average invoice tells you what your clients, the market and most importantly, your sales people think your station is worth.

Why go to all of the trouble of creating a special package if it can’t give you a lift to that value?

2.) All packages include brand sell commercials for the advertiser at full rate, with only the added value being discounted.

It’s well known that you do establish your image, in part, with your pricing policy. Of course the quality of any product, the service the seller delivers, and the convenience of the buying process all play a role in the image, but pricing is a key player in the marketing mix.

Is there really twice as much time and material invested in building a Mercedes versus a Hyundai, or does premium pricing play a role in the image of Mercedes?

And more importantly, which car do you think has the highest profit margins?

Maybe it is time radio started creating premium packages?