A crossroads for radio marketers

Follow along with me for a minute:

  1. A radio station reduces the number of spots it offers every hour.
  2. The amount and quality of overall programming improves.
  3. Listener satisfaction goes up.
  4. The number of listeners goes way up.
  5. The station increases its advertising rates commensurate with its greater audience.
  6. The station generates equal or greater revenue from fewer spots at higher rates.
  7. Everybody is happy.

Simple, right? We’ve been monitoring Inside Radio’s recent coverage of “The EntercomSeattle Experiment,” noting that the station’s strategy to cut spot loads in half for several months is at a crossroads now that 2015 advertising budgets are being formulated. Our scenario above describes how, in a perfect world, the strategy can work successfully so that the station, its listeners and its advertisers all win. Of course, there’s always the option of going cold turkey up front—that is, simply decide to cut spots per hour; have faith that enough advertisers, with the promise of more exclusivity and less clutter, will pay the higher freight before listenership increases; and then cross your fingers. What’s happening right now is a little of both.

According to Inside Radio, the station, “107.7 The End” (KNDD), had its share rise from 3.7 in Fall 2013 to 6.0 in Summer 2014 – a significant jump if correct — and some 20 clients over the past 90 days have bought campaigns at much higher rates than in the past.

Many advertising agencies and brands contacted by Inside Radio applauded 107.7’s “Two-Minute Promise” in June to limit commercials to spot breaks of two minutes each, for a total of six minutes per hour. Even so, some wondered whether the opportunity, at least at the outset, was compelling enough and worth paying more for, even before a hoped-for increase in ratings would then warrant a higher rate.

Entercom’s reduced-advertising strategy cuts to the heart of what has been one of the biggest criticisms of terrestrial radio: too many commercials affecting programming, disenchanting audiences, and helping to further shape a downward spiral. To its credit, Entercom has put its foot on the pedal where others have either tried to justify the status quo or merely complain about it. Take what you’d like from a 2011 study by Nielsen, Media Monitors and Coleman that suggested radio holds more than 92 percent of its lead-in audience during commercial breaks. As we noted in our own research earlier this year on radio messaging and what gets consumers to buy, Nielsen does not measure whether its survey participants are actively listening, passively listening, mentally tuning out altogether, or recalling later what they heard.

Regardless of what might have been tuned in at a particular time in the Nielsen data, close to 70 percent of respondents to the CRN survey—real listeners stating real opinions—indicated they were tuning out by the second spot in the series, suggesting a difference between recorded behavior and reported behavior.

So, yes, we are supportive of the Entercom experiment. It is why and how CRN has devoted its business for decades to the proposition that there is a more effective way to achieve brand marketing objectives on radio than delivering advertising in the most traditionally accepted (and typically cluttered) radio space. However, there’s also the issue of using radio advertising as a primary or sole marketing ploy. Consumers say in the CRN survey they don’t pay much attention to ads and are not heavily influenced by them. So will shortening the stop set change any of this?

To be sure, advertising has its place in the radio marketing toolkit. But it shouldn’t be your only tool. Successful radio marketing, as the respondents indicated and we concur, incorporates original content tied to audience needs and interests, testimonials from trusted personalities and real people like the listeners themselves, contests, sweepstakes, and live events—all focused solely on the client objective.

To help ease the heavier price tag, Entercom was said to be extending advertiser messages through other station assets such as websites, social media, email blasts and events. This value-add approach, while a noble one, has become an expectation of any radio buy, and often involves advertisers being tacked onto something that may or may not directly address their specific target audience and marketing objectives.

It seems like Entercom is getting some traction from reducing the number of hourly advertisements. For the good of radio, and for the good of the brands that believe in it, we are not shy to confess our rooting interest in the concept and our support to do what we can to help deliver the goods for marketers when they turn to this effective medium—inside and outside the stop set.