I allocate many dollars of broadcast money on behalf of ad-agencies, advertisers and marketing departments for professional service businesses. Therefore, a lot of broadcast reps contact me.
I tell my ad clients that they're always gambling their money, though with better odds than Vegas; yet my sales reps often tell me that advertising on their stations will definitely work. Well, if broadcast advertising works so well, how come there is always open ad inventory? The truth is that there are advertisers who can make broadcasting profitable if their margins can justify the thousands of dollars necessary to lay the foundation in their brand name and if they're willing to commit to the costly trial and error to find a campaign that will work-for a while. If this stuff worked even 20 percent of the time, there would not be a revolving door of radio and TV reps beating on doors to "close the deal."
Nobody has a greater love for broadcast than I do, though you may not suspect that after reading my opening paragraphs. Heck, I can even tell you who the announcer was for Leave to Beaver and who the KMOX FM morning man was for six months in 1982 in St. Louis, but at the same time, as an ad man, I must tell clients and prospects that most of the time it takes a lot of trial and error time and money for those advertiser to find a campaign that will reap consistent profits.
Funny story. The very sales reps who call me consistently to try to persuade me to spend my clients' money on their stations often have their own cottage businesses, yet they never buy air time on their own stations for their own businesses. I am still trying to get a former 15 year broadcast salesman to take some free radio time that I secured for him to advertise his new business, but he said that it's not worth his while to even review the ad copy-even though all the air time is free. How's that for confidence in broadcast advertising?
Oh I do know one business owner who consistently eats his own cooking and advertises his own broadcast ad agency business via talk radio, me. Yes, I know firsthand what that professional service business owner is up against when he shells out thousands of dollars of his own money! Perhaps spending my own money on broadcast ads has made me a more effective broadcast ad strategist, and even SpokesVoice, on behalf of my clientele who also utilize broadcast advertising. Yet, even after 20 years, I don't have one client where results come effortlessly. Persuasive ad copy and strategizing take time and effort over a long period. It wasn't easy 20 years ago to generate consistent profits, and it's often more difficult today, especially with so much fragmentation.
www.brucehorlick.com and www.radiostorybooks.com
Wednesday, October 21, 2009
Saturday, October 10, 2009
What is the Future of Broadcast?
I negotiate with broadcast media reps everyday, while bouncing in and out of
voice-over sessions. I have a love for broadcast but I have noticed that it's more difficult for advertisers to generate concrete results. Why? Fragmentation. Take radio. Ten years ago audio books were not a billion dollars plus industry; IPods were not in vogue; satellite radio was not around and there were not as many formats. Some 10 to 29 markets are even supporting two or three sports radio stations (or are they supporting them?)
The good news for advertisers is that most stations have had to lower their ad rates, and thus some advertisers can still justify radio spending... An initial media buy is justified based on data. Then, the advertiser asks if that media buy should continue based on the more important cost per customer, per patient, per case, per client... Often advertisers are diverting broadcast money to interactive media because they're finding their "cost per" is less expensive than in broadcast and print. How can so many stations afford to stay in business (even the ones with low operating costs), especially when their advertising clients must generate real results to continue spending ad dollars?
I wonder when some stations will be forced to go dark. If not now, will stations start going dark when automobiles are equiped with web radio, sites which will be commercial free and cost very little to operate... In other words, will transmitters and towers really be needed? Will business models like www.hulu.com (a true hybrid between TV and interactive) make the most economic sense for advertisers?
I hope that someone will say to me, "Bruce, you're missing one or two important factors and here's why local radio and T.V. stations will prosper." I posed these very concerns to a former radio owner who said that he loved being in the radio business in the 60s, 70s, 80s but he recently told me that he was glad he got out of the business in the mid-90s, and that he agrees with my prediction (unfortunately).
Bottom line? I have a feeling social networks will make narrowcasting
super-narrowcasting and that a number of media hobbyists will make just a little bit of money in their own little highly fragmented worlds. The media money from advertisers overall will stay the same probably but their payments will be delivered to many more vendors in smaller amounts.
www.brucehorlick.com and www.radiostorybooks.com
voice-over sessions. I have a love for broadcast but I have noticed that it's more difficult for advertisers to generate concrete results. Why? Fragmentation. Take radio. Ten years ago audio books were not a billion dollars plus industry; IPods were not in vogue; satellite radio was not around and there were not as many formats. Some 10 to 29 markets are even supporting two or three sports radio stations (or are they supporting them?)
The good news for advertisers is that most stations have had to lower their ad rates, and thus some advertisers can still justify radio spending... An initial media buy is justified based on data. Then, the advertiser asks if that media buy should continue based on the more important cost per customer, per patient, per case, per client... Often advertisers are diverting broadcast money to interactive media because they're finding their "cost per" is less expensive than in broadcast and print. How can so many stations afford to stay in business (even the ones with low operating costs), especially when their advertising clients must generate real results to continue spending ad dollars?
I wonder when some stations will be forced to go dark. If not now, will stations start going dark when automobiles are equiped with web radio, sites which will be commercial free and cost very little to operate... In other words, will transmitters and towers really be needed? Will business models like www.hulu.com (a true hybrid between TV and interactive) make the most economic sense for advertisers?
I hope that someone will say to me, "Bruce, you're missing one or two important factors and here's why local radio and T.V. stations will prosper." I posed these very concerns to a former radio owner who said that he loved being in the radio business in the 60s, 70s, 80s but he recently told me that he was glad he got out of the business in the mid-90s, and that he agrees with my prediction (unfortunately).
Bottom line? I have a feeling social networks will make narrowcasting
super-narrowcasting and that a number of media hobbyists will make just a little bit of money in their own little highly fragmented worlds. The media money from advertisers overall will stay the same probably but their payments will be delivered to many more vendors in smaller amounts.
www.brucehorlick.com and www.radiostorybooks.com
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