While the traditional radio ad revenue picture looks bleak, digital radio expenditures actually jumped 13% during Q1 of this year. Of course, that doesn't make up for the 24% decline in total radio ad revenue during the same period, but it says a great deal about changing tides.
As Jeff Haley noted, "Radio's digital platforms are experiencing the greatest growth and are reflective of the dollar shift from media to marketing by many of today's advertisers."
That's great news, as far as advertisers go. But how can radio better develop strategies that work effectively for advertisers and audience - the two constituencies that really matter.
In a recent interview with RBR, Bob Pittman was asked about how and where radio broadcasters should be investing in the digital arena. His response?
"Well, I wouldn't tell anyone to have faith. I would tell them to watch the consumer. To watch the consumer. Ultimately, the consumer is always right, so give the consumers what they want. Two, rethink and challenge the way you operate and do it from ground zero. Okay, we are in a time of technology, enormous technology that didn't exist even 10 years ago, 15 years ago. Rethink how you deliver what you do and how you operate your business. I think they'll find that they have new revenue sources and they have lower costs and they have quicker decisions and more innovation if they'll do that as well."
While the digital opportunity is right in front of our faces, the strategies that made radio a viable business during the past 50 years need to be modified, rethought, recast. Radio needs research and it needs a plan. Continuing to operate the way we have is not going to adequately address listener and client needs, and radio will miss the digital bus and stay at (or below) that lousy 7% line that Mel always complained about.
Radio needs to start intelligently surveying consumers. We continue to spend money researching which songs are burned and which DJs are familiar. But what level of investment is being devoted to truly gaining an understanding of the consumer? Is it that important to find out whether Z93 is the concert station? Or is it more germane to comprehend where the audience is going to satisfy their music, talk, entertainment, and information needs - and how radio can provide a unique, compelling product in this digital landscape.
It's time to go back to school. Read Seth Godin's Meatball Sundae. Invest in research - and it doesn't have to be grandiose. Our Technology Polls, utilizing listener databases, have cost stations $500 each year, and have provided data that radio operators need to see. There's no reason why this model could not be expanded to include hundreds of stations, representing all formats.