Ad Buyers Want Numbers from Radio

(Publisher's Note: The following appeared at Audio Graphics on December 29, 2009.)

In 2009 we saw two big moves for delivering accountability in radio advertising online: Ando Media went for MRC accreditation, and TargetSpot announced its post-exposure metric. Both moves were done under the guise of improving accountability to advertisers, and each does. Offline we saw the spread of PPM technology with little discussion on its impact to advertisers, but a lot of words on how it's changed the face of the radio industry.

In this final page of the year I will suggest reassessing what radio is doing for advertisers. There seems to be little to no talk about this topic, other than repeating how radio reaches 93% of Americans each week.

"How many people responded to my ad?" is no longer rhetorical."

2010 may turn out worse than 2009; it really depends on how much energy is wasted pursuing the wrong objective(s). What began as a decade of internet apathy has turned into a run for the finish line, yet radio is still having trouble understanding which direction to go.

I say the above because the radio industry shows no sign of delivering hard numbers of response to advertisers. Instead it seems to be saying, "The recession is nearly over. Things will get back to normal soon."

So we read about social networking and how radio stations need to start including it in its web sites. Due to the cost in creating this community, I think not. Other articles speak of crowd sourcing, defined as getting others to do your programming. It's the wrong use of a radio station's internet real estate, and it won't draw large enough local crowds to sell.

Caring for a web site is an expensive, time-consuming task that the radio industry has not accomplished with any degree of success. There's a simple reason for this. A radio station web site should either be used to expand total audience or deliver to your broadcast audience ancillary elements of over-the-air programming. Too often a station web site tries to do both, and fails.

It's a well-understood fact in online advertising that cost-per-thousand pricing is often delivered for a buck or less. If you convert a cost-per-action pricing to CPM, it will come in at much less. You won't have much success competing on this level unless you start delivering to advertisers more than just the number of people in your audience and how many times they saw/heard an ad.

Here's where I see problems for the radio industry in 2010 - it will have nothing to hand media buyers when they say "show me the results."

Numbers. "How many people responded to my ad?" is no longer rhetorical.

Operating offline and online is radio's new universe. The radio industry has the ability to tie what happens on-air with the response at its web site using technology, i.e., third-party measurement, a time stamp at the advertiser's web site, or coupon campaigns - anything that allows the media buyer to say "This sale came from this ad campaign." It's what advertisers want. (At the least, a bump in revenue must be connected to the expense of the media.)

The ad buyer will want more numbers in 2010 because it's finally clear that simple math will show them if an advertising budget is worth spending. Now that we appear to be picking up economic steam, those who sell a simple impression will hear this statement more often: "Let me look around to see what media buys the most response for my money."

Some industry analysts are forecasting a flat or 1% rise in 2010. I think that if the radio industry still can't answer the response question by this time next year, we'll be reading about a radio industry revenue drop of 3-4%.

Publisher's Note: Having first appeared here on January 12, 2009, it's important to post these words again. "Radio is faced with a forecasted 13% drop in 2009 revenue. My bet is you can increase that to 17%, easily, and possibly hit 20% if some changes aren't made immediately."

On December 12, 2007 came this: "In a few short years, however, radio sales teams will also need to talk performance, because that's what today's smart media buyers are asking about."

I'm hoping this is the year that I'm wrong.

Quotes from Ken. Year, 2009: