Inside Music MediaJerry Del Colliano

It’s a losing battle.

Big companies like CBS Radio take 50% off of their rate card in some major markets and then everyone else goes down with them.

iHeart does it.

Cumulus does it.

Today’s radio revenue model is sell at the cheapest rate and run as many units as possible hoping to tread water.

Lots of good stations are getting burned because they are pitted against giants who are willing to bonus and cut their way to an order.

And digital is their tool for cutting rates – just throw some digital content in, lower spot prices by effectively bonusing the rate down.

There has to be a better way to stop competitors from dragging down your station’s rates.

And there is.

1. Create more premium content that gets ratings – invest in the morning show and make it a must buy. Be willing to sit on the ratings until buyers understand that if they want the top morning show, they will pay your rates.
2. Then force buyers to buy other dayparts to get into the morning show once you have improved the ratings and created the demand. This is where you want to spend your money – on talent, promotion, etc.  Remind me to share what the former head of American Airlines advice on pressuring radio inventory.
3. Every station’s morning show should represent a minimum of 50% of their annual revenue at premium prices not subject to discounting or competitors that have to drop their rates in the best daypart to sell ads.
4. Hire a “concierge” rep to work with all the local advertisers who make up the 50% of station revenue derived from mornings.  You’ll like this idea and we will talk about it. It generates lots of revenue in medicine.
5. Offer a performance guarantee for exceeding expectations. There are a number of ways to do this and there is increasing evidence that good advertisers will support it. Tie in an increased spend for meeting goals. Add spots for missing them.
6. Master this one technique that will improve ad performance – best part is, it’s free to you.
7. Strategize how to allow your competitors to own their rate dropping reputation while your station counters with fair rate/high performance. Hints on doing this without badmouthing the competition or radio.

The fact is, with programmatic buying on the way lazy, cheap big groups are in effect begging advertisers to bid down radio rates at the worst possible time.

You’ll want to earn a reputation for doing the opposite or revenue will dive even on stations that deserve more.

Big issue – I’ve added it to the agenda at my upcoming media conference in Philly March 18^th.

Other topics:

• What You Need To Know About Reimagining Radio – Changing the way the programming is delivered. The end of the quarter hour mentality that ironically will win more quarter hours. Great opportunities for music and spoken word formats.
• Mastering Digital – What Works, What’s in the Pipeline – Separating digital from on-air to get the best results.          
• Protect Your Station Against Competitors Who Drop Their Rates – The way to put a stop to competitors dragging down your station’s rates.
• Latest Breakthroughs For Attracting Money Demos – No risk ways to make radio cool again to younger listeners who are turned off by lots of commercials and too much repetition of music.
• Changing the Way We Talk To Audiences – 5 things you can do right now to make your station sound more authentic to younger listeners.
• Key Strategies To Protect Your Radio Station – Digital, podcasting, streaming music services and the digital dashboard are four challenges that we will answer.
• New Content Businesses Ripe For Radio – Startups content providers can start either as part of a radio station’s business or as an independent company.
• Salvation for AM Stations – Format ideas that are so much more attractive that even young people will find how to turn on an AM station.
• FM Protection Against Streaming Music Services – How to hamstring popular services like Spotify, Pandora and YouTube so that they cannot compete with your local radio station.
• The Trick To Real and Lasting Success For News/Talk/Spoken Word – The bad news is doing talk and news the way it is now being done is a death sentence. The good news as you will hear is that young listeners love the spoken word – they just don’t like radio’s way of doing it. Here’s the alternative.
• Dire Warning About Podcasting – I get that everyone is enamored of podcasting, but it is not broadcasting and there are these serious repercussions for radio stations who fall for it.
• The Best New Radio Format No One Is Doing – This alone is worth the price of admission. A radio format that Millennials will eat up – for innovative stations only because you’re going to have to have an open mind.
• Expanded Group Questions & Answers – An entire segment devoted to your questions.
  

 

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