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.