JacoBlog - Jacobs Media's Blog

Follow the Money

Today we have a guest post from Paul Jacobs who offers his insight on how radio needs to invest in solutions to reach younger consumers:

A recent article in The Detroit News about how the automotive industry is rapidly moving away from traditional media toward digital solutions to reach younger consumers, who they place a high value on, generated the following quotes:

"We are always looking for digital extension or a live event to complement our advertising." - General Motors spokesperson

"Buzz is created when people are talking about an event, or a message gets spread all over YouTube." - Michigan State University advertising professor

"Digital marketing opens up new possibilities for building ongoing customer relationships." - Chrysler's marketing chief

If that wasn't enough, they showed this chart:

It's time to stop all of the hand-wringing about PPM, declining revenue, satellite radio, and all of the other excuses.  Sure, these are problems, but the solutions are right in front of our faces.  Who does event marketing better than radio?  And what medium lends itself best to digital solutions?

It's time to invest in solutions.  Follow the money.  It hasn't disappeared, it's just moved.  And radio needs to move along with it.  Quickly.

Women Are From Venus, Men Watch YouTube

As we learn more about streaming video, an interesting demographic schism is forming.  18-34 year-old women have a stronger tendency to watch video on network TV sites.  Clearly, this is strongly connected to their attachment to popular network offerings, such as Grey's Anatomy.  Younger men, on the other hand, are more likely to stream video on CGM websites, such as YouTube, MySpace or Break.com.

And that's not all.  Nielsen reports that as a result of these streaming video trends, a new definition of prime time may be forming.  For visitors of network TV sites, it's the noon hour that shows strong activity, bolstered by online voting and other program-centric web content.  But for the CGM sites, it's the overnight hours when viewing heats up.

Once again, this represents opportunity for radio - especially the stations that have already recognized this huge video streaming trend.  Smart stations and savvy personalities have experienced the power of video, as an added component to traditional programming content.  Stations that include video - say of "Rock Girl" promotions, station events, and morning show stunts - are benefiting from this added content dimension, as well as the viral power that video has.

Video is the next great vista for radio, but stations need to start identifying videographers in their midsts.  It may be an intern, a promotion assistant, or a talented jock.  But a little skill with video editing software can open up a whole new content silo for radio.  With great brands and habit-forming personalities, video is a natural next place to go.

Still Bloggin'

This month marks the third anniversary of the JacoBLOG.  We've written more than 800 postings to date, and as I've come to learn, there's no shortage of issues and topics to blog about.

During this time, there have been a lot of changes the radio industry has faced - many predictable, but a few curve balls as well.  We've tried to keep you up-to-date with these zigs and zags, while providing (hopefully) on-point commentary on the key trends that impact our business.  In the process, we've also attempted to keep the postings mixed, ranging from the serious to the critical to the whimsical.  Along the way, we have tried to inform, and even cajole, but never to lecture or become shrill.  Instead, our goal has been to motivate, inspire, and provide a dialogue for those in the corporate wings, those on the air in the studio, and even those on the outside looking in.

We've met some fascinating people along the way.  This blog is read by a myriad of people, clients, non-clients, and friends alike.  I am always amazed by how many comments we anecdotally receive about our musings, oftentimes from people we just wouldn't expect to be readers.

Your comments over the years have been important, and we encourage more of them.  Realizing that many have to be discrete about opining about the big issues of the day, we hope to hear from more of you in the weeks and months ahead.  It is indeed a strange journey, negotiating the fast-changing media climate.  We hope to continue to provide clarity and sanity along the way. 

Thanks for reading it.

For Sale

At the recent RAB convention, the group heads panel produced some telling quotes about the state of radio sales in 2008 (as told by Tom Taylor of Radio-Info)

Lew Dickey: "I'm frankly surprised radio's done as well as it has (because of staff and budget cutbacks)."

Peter Smyth, noting the paucity of sales training:  "I'd rather have smart people (selling), because if you put dumb people out on the streets, you're gonna have 100 people selling spots for $5."

Both these observations sadly tell an accurate story about why radio continues to fall short in the sales arena.  I cannot tell you how many times in the past 12-18 months, a GM or CEO has said something like this to me:  "Fred, it's not the ratings.  They're fine.  We just can't sell them."

And this applies to all the Rock formats we work in, and many highly successful, iconic personalities.  And in conversations I have with other broadcasters, sales problems are rampant in all formats, and in all market sizes.  Rates are cratering.   Sponsorships of signature events go unsold.  Webcams that are generating page views that are off the charts are unsponsored.  Clearly, there is failure for the transactional side of our business, and it's crippling the industry's ability to keep putting out a competitive product.

Sales training is either non-existent, or it's ineffective.  Many stations, clusters, and companies have multi-layered sales management teams, but strategy, innovation, and new initiatives are few and far between.

Twelve years after the Telecom Act of '96, and companies are still struggling to figure out successful sales models.  We continue to watch clusters "experiment" with different configurations - each station having its own staff, one staff for all five stations, sell the Rock stations together, etc.  And more often than not, a strategy is scrapped after a year only to be replaced by another failing concept.

As the industry now races toward digital products and content, how do we expect to sell and market these new offerings when we continue to falter with the tried-and-true :30 and :60 spots?  If we're not careful, there's going to be a lot of $5 units out there before long.

New Tricks

Contrary to what you may read, there's a lot of music being sold these days.  But much of it is not being sold in traditional ways.  As record labels lose their grip on the musicians and bands that used to be their bread and butter, music is being consumed in very non-traditional ways.

Of course, there's iTunes, but consider how much music is now being sold via TV shows.  Or songs that are purchased as a result of playing video games like Guitar Hero or Rock Band.  Or even the way that Radiohead is creating a new model by giving away their album, and letting consumers set the price.

Or the way that Eagles' manager Irving Azoff only offered Long Road Out of Eden at Wal-Mart.  Azoff understood Wal-Mart's great reach, not to mention how many shoppers buy products online.  Like Amazon, it's easy to buy CDs on Wal-Mart's website.  In a recent New York Post article, Azoff was asked what he was thinking when he put together the Wal-Mart deal, considering the chain has no New York City stores.  He mentioned the website sales, of course, but also pointed out that Virgin stores in NYC simply bought copies of Long Road Out Of Eden at Wal-Mart, and marked up the CDs to make their margins.

Again, in a rapidly changing entertainment world, this is more proof that non-traditional models can be effective.  Radio could benefit from these marketing "experiments" whether it's in the way we package, market, and build out advertising models for clients.  The days of simply pointing to a ratings book, and quoting a rate for spots are coming to an end.  Like Azoff proved with the Eagles, using a strong brand to sell products in non-traditional venues can be done.

It takes creativity, a sense of risk, and an understanding of the market.

Coincidence?

We think not.

(As seen in New York City.  Photo credit:  Greg Strassell.  Thanks to Bob Harper for noticing.)

It's All A Game

The momentum for Guitar Hero and now Rock Band continues to point to the exploding popularity of video games that take the player beyond the typical controller.  With one part air guitar, one part "School of Rock," and another part Reality TV, these games give fans a chance to play along.  So far, Activision reports that Guitar Hero has generated $1 billion in sales... in North America alone.  And beyond that, these games sell music.  Nielsen's SoundScan reports that 11 of the 12 songs featured in Guitar Hero II showed huge sales increases (Cheap Trick's "Surrender" nearly tripled its numbers).  MTV has tracked 2.5 million downloads for Rock Band, while Guitar Hero 3 has broken the 5 million mark.  At a time when there's very little good news in the music business, these games are bucking the trend.

Now Aerosmith is starting a new trend with their own signature version of Guitar Hero, due to be released in June.  It is hard not to imagine similar projects for iconic bands like Zeppelin, the Stones, the Foo Fighters, and the Chili Peppers as the world loves to play along.  And for radio, there continue to be opportunities to socially network this trend into live and local events, contests, and tournaments.  At a time when Rock struggles for attention on the Grammys and in music sales, Guitar Hero and Rock Band represent a hot new wave of activity and interest.  Smart stations will jump on this bandwagon, and take it to another level.

Less Is... Less

As Clear Channel moves from the public arena to private ownership, how should we evaluate "Less Is More" as a strategic initiative to change the radio advertising model?  In a recent Wall Street Journal article, CEO John Hogan indicated that three years after the debut of "Less Is More," that program is "yesterday's news."

Claiming success with "LIM," Hogan noted higher ratings and new customers.  Many media buyers and other broadcasters don't share his view.  Clearly, the program didn't change the game.  In fact, many advertisers were able to buy :30s cheaper, allowing them to either spend dollars in other media (think Internet) or pocket the difference.

But the real target audience for "Less Is More" was Wall Street.  And we can clearly see how impressed the markets have been with radio stocks.  There's little doubt that flash and trash tactics won't move stocks anymore.

That's why you have to hand it to an operator like Cox's Bob Neil.  With little fanfare, his stations have systematically cut back on the numbers of minutes they run, and the result is a more seamless, less annoying listening environment.

No gimmicks, no games.  Just giving listeners what they want.

Marketing Integration

Perhaps I'll get the collective "Duh" when this blog is posted, but the aftermath of all the expensive Super Bowl TV spots is the difference in web traffic that advertisers garnered.  The big Internet winners were Hyundai, Paramount, and GoDaddy.com.

And how did they do it?  It was driven primarily by adding a URL to these spots in order to stimulate web visitation.

The GoDaddy.com spot (the one that teased Danica Patrick) is at the top of the list. It was not well-rated in the popularity polls (#48 out of 55), but web traffic on their site was up more than 500%.

True ROI for advertising and marketing must now include multi-platform efforts.  And this is another area where radio can benefit, too.  When we actually get some marketing dollars, think about billboard and TV spots that aren't simply inert messages that hope to make an impression or stimulate tune-in.  Adding a URL - perhaps even a microsite that is connected to the main site - can motivate everything from voting to finding out more about the station.  And if the right content is on the site, it can actually generate buzz.

We are seeing great indicators of how great web content can have a life of its own.  The Obama "Yes We Can" video that was making the rounds last week is a case in point (I received it more than five times).  On YouTube alone, I counted more than 7 million views for a video that didn't cost the candidate a cent.

While the Obama video is very viral, radio can generate its own buzz by repurposing content, and getting it out to its databases.  A case in point was an email I received from NPR called "Rebuilding The Beatles."  It contained a link to a Morning Edition story about the Fab Four that I hadn't heard in "real time."  By giving me the chance to hear it for the first time online, they created a great integrated marketing effort that marries their programming with their website, powered by their listener database.  Total cost?  $0.

Anyone can do this.  Duh.

Ultimate Noise

Jacobs Media’s Bill Jacobs shares a client promotion that has garnered national attention:

Stations are constantly on the lookout for ways to garner attention and make some noise in their markets.  If you take enough shots, every once in a while something breaks through in such a big way that it takes on a life of its own.  And usually it does so in a way that couldn’t possibly have been predicted beforehand.

Case in point is our client station WKLC, in Charleston, West Virginia.  Like many stations, they were looking for an impactful promotion for Valentine’s Day, and they came up with the concept of giving away a free divorce to one “lucky” listener.  It’s hardly a new concept, but with some planning (and a little luck), this seemingly small and basic promotion exploded to levels we’ve rarely seen (and they received around 2000 entries).

It started with the local newspaper, The Charleston Gazette, picking up the story and giving it some attention.  And you know the old adage:  “The harder I work, the luckier I get.”  Turns out that the Gazette's reporter is a stringer for the Associated Press, and the decision was made to put it up on the wire.  And from there, it took off.

While this doesn’t encompass everything that’s happened over the last several days, Program Director Jay Nunley has, among other things:

• Been interviewed by over 30 radio stations
• Been on the front page of the Gazette (along with GM Steve Z)
• Made it into USA Today
• Been contacted by Dr. Phil’s people for a possible future appearance
• Made it into newspapers in Asia, Africa, Europe and Australia
• Been interviewed live on Fox News by Sheperd Smith

This is a great reminder that it’s not about the size of the budget or the size of the market.  You don't even need a local morning show (Jay's the afternoon drive jock).  But a little imagination, some effort, a local contact, and some luck can move the needle in a huge way.  It's also another great story for local radio's ability to still be the big story - even in a world of iPods, Facebook, and XM.  Congratulations to Jay and Steve for helping turn “just another promotion” into the kind of breakthrough event that every station dreams about.