Below is an open letter to the radio industry: Published Labor Day 2016
As a radio professional, regardless of your title, market size, level of influence or years left until retirement, this is for you. As the media landscape continues to rapidly evolve, radio’s ongoing vibrancy in a mobile world will be hard fought, just as it has been for every generation dating back to Marconi. The talent, dedication and passion for radio that exists in our industry will serve us well. In fact, together, we represent the proverbial “cavalry.”
With the arrival of another football season, the words of Coach Lou Holtz ring out, “In this world you’re either growing or you’re dying so get in motion and grow.”
Yet, according to PWC’s annual Entertainment & Media Outlook report, radio revenue is projected to grow just .84% per year between 2016 and 2020 ($17.8 billion to $18.4). That level of growth won’t even keep up with inflation.
According to Coach Mike Ditka, “In life, you get what you tolerate.”
Radio must focus on sustainable growth, which means as dollars shift between media each year (more for Facebook, less for print), we need to be winning dollars not from radio stations across the street, but from other media, specifically print, local TV and Pandora.
If the experts are predicting, .84% avg. annual growth, we can do better. Radio’s aim should be $20 billion in annual revenue by 2022 (#20×22), which can’t be achieved by cannibalizing ourselves (avg. annual growth of 2.05%). Some might say this is not ambitious enough, but let’s add the first $2 billion in revenue and grow from there.
In order for this growth target to happen, radio needs to rediscover its swagger. This includes continually telling a compelling story to our own industry, to our listeners who have ever increasing media choices and most importantly to the advertising and financial communities. Right now, in the midst of the key Sept/Oct/Nov PPM ratings and fall diary book, is the perfect time to start.
In fact, this Labor Day provides an opportunity for those of us who work to create and monetize the power of radio to stop and consider the unique competitive advantages of our medium and double down on bringing them to life for advertisers and listeners. At the end of the day, the most important story is the one you tell yourself. Are your beliefs moving radio forward or holding radio back?
Every quarter hour of every day, radio delivers “Can’t Miss Moments” that audiences tune in to hear and advertisers pay to be part of.
(1) Radio has an actively engaged audience, which efficiently generates results for advertisers. You don’t hear it the first time, it’s gone. In a world of 8 second attention spans, radio stands out. Take TV, which is much more passive in part because there’s a digital safety net. Viewers can be less engaged knowing they can pause and rewind to catch anything they missed, not to mention the ability to skip ads altogether. In a similar way, digital platforms freely acknowledge that 50% of impressions never get seen by human eyes. For the other 50% of digital ads, they are viewed in the midst of display and pop up/pre roll clutter.
In addition, the lack of a safety net in radio, works to benefit on-air talent as they broadcast live without a “second take” and always have to be at their best. Unlike TV, which records and edits many shows until they are just right, (Stephen Colbert’s premiere on CBS made headlines because it almost didn’t make it on–air with all of the edits), radio benefits from a more relatable experience as both talent and audience know it’s the broadcast equivalent of a 2 minute drill in football.
(2) This authenticity strengthens radio’s relationship between the audience and the on-air talent. These one to one connections help raise money for well deserving charities and drive response to an advertiser’s call to action. In addition, radio’s core audience is full time employed, which means they have more income to spend with advertisers and are active mobile consumers visiting retailers.
(3) As these relationships drive more tune-ins and avg. daily cume, the ability to increase the size of the audience without adding incremental delivery costs is a tremendous competitive advantage compared to digital platforms. In fact, not being burdened by these variable bandwidth costs helps radio make money and ensure healthy margins, as other ad supported digital audio platforms can’t turn a profit despite significant audience growth.
Radio is the 800 pound gorilla of audio and will continue to lead the industry forward as we deliver “Can’t Miss Moments” on the way to #20×22.
As President and COO of DMR/Interactive, I have the privilege of working with radio groups across markets and formats. Each day we help build and strengthen the relationship between radio and the listeners who matter most.
The passion that listeners have for radio’s “Can’t Miss Moments” can inspire an industry wide conversation that is strategically shared internally and with the advertising and financial communities.
Join the conversation or start one of your own. Use hashtag #20×22 and contribute your thoughts. You can also email firstname.lastname@example.org and together we’ll continue to create a vibrant future.