Online Revenue & Sales Strategy for Hyper Local Media
Can Radio beat Newspaper in the online news space?
Here’s part 1 of last week’s webinar we did for a group of Radio executives. Merlin Media and Genesis Communications are featured in this session. We focus on the issues affecting Radio’s ability to build sustainable, online business models.
The new, local online competition; more than just the other newspaper or TV station across the street. Outsiders like Patch, Reach Local, Groupon and Pandora are hell-bent on siphoning ad dollars in local markets. Even independent, hyperlocal sites are grabbing bigger shares of small business marketing budgets.
In 2007, WYSP Radio in Philadelphia, a CBS station, sent the mid-day team of Matt and Huggy.. packin’.
Instead of hitting the beach, this radio duo took their show to the web. The loyal fan base downloaded their podcast, and packed nightclubs with their live streaming events.
Click above to watch the short, 5 minute video we produced to show how this worked, and how successful it was.
Watch for other “out of work” DJ’s to adopt these online tactics.
Today, Huggy is on the air at WTKK, Boston Talks Radio.
To help Broadcasters get the most out of the NAB RAB 2010 Radio Show, our team gathered a list of issues devoted to digital business models. This collection isn’t focused on the usual topics of brand extension, FM on cell phones, HD, streaming, mobile apps and social. Rather, it’s a fact-based list of debilitating, online revenue challenges still confronting the industry today.
Hard to believe, but some owners still operate their digital assets like it’s 1999: build content, get traffic, sell ads around traffic by leveraging advertiser relationships. This contributes to why Radio only gets 2% of local web dollars. Compare this to Patch, Reach Local & Google that collectively get over 50% (and growing) of web budgets.
All is not lost. Even though competitors are multiplying like rabbits, Radio can still get back in game and significantly grow its web and overall revenue share.
Step #1: Radio should study the moves of DESERET MEDIA in Salt Lake City. CEO; Clark Gilbert, has dramatically restructured his portfolio of Broadcast (KSL) , Print and Web units into a digital first powerhouse that dominates reach & revenue.
Step #2: Address and remedy the most common, interactive choke points. The following list identifies what our team refers to as the ’800 lb. gorillas in the room’.
1. Top management & owners need specialized web training. How can you manage what you don’t fully understand? Dependence on expensive research and intellectual consultant/vendor babble only burns through cash and puts your stations deeper in the hole. Radio doesn’t need more data & analysis, it needs action in the field and updated management & compensation structure. Ex: If you delegate sales strategy to a content & tech focused VP of Interactive, you’ll just get well-trafficked sites with a ton of unsold inventory. Conclusion: Relying on VP Interactive or the Internet/marketing manager is a recipe for disaster without knowledgeable oversight from the very top. CEO’s: Get a closed door, WEB BUSINESS MODEL training session asap.
2. Director of Interactive qualified? Staff properly motivated? Too few Interactive VP’s or web managers are qualified to implement a realistic revenue strategy. While building slick sites and driving eyeballs have value, these skills do not always equal revenue & profit. Suggestion: hire a corporate VP of Interactive Revenue that reports directly to the CEO. Bonus all applicable staff based on web profit, not web traffic. Install mandatory web budgets and non-financial objectives that includes both financial incentives and penalties…for reps and management.
3. Dangerous thinking: ‘selling web cannibalizes Radio sales’. Are these words are still being uttered by some? Yes, but not in public. If those in charge would prefer to focus on their core Radio product, that’s fine. If these managers believe that “web revenue is small, so let’s not put too much time into it”….that’s fine too. But at the end of the day, if you’re not going run your web assets like a profit-first business…then why even have a digital initiative in the first place? It’s a fact. Advertisers are moving more ad dollars to online. They’ll buy digital marketing from their Radio rep, or someone else. While web revenue is still relatively small, it is the fastest growing revenue stream. At the very least, Radio should focus on growing its overall revenue share, by smartly leveraging its digital assets.
4. Limited web training of sales reps. How can they sell new products without seasoned direction & regular training? Is your staff taught by qualified web-sales trainers, or by a Radio ‘web-geek’? Is your staff forced to endure theory & classroom lecture, or are they getting real world training by being taught in the field? Radio needs to look outside of the industry for fresh and seasoned perspective on Web sales. Be wary of training from those who do not have recent local/direct, web sales experience.
5. Management structure conflicts. Conflict #1: Web managers typically report to a Broadcast manager. The Broadcast manager has a compensation package that substantially encourages spot or total sales. This may be one of the most critical choke-points of growing online revenue. Where do you think Broadcast managers will place most of their efforts? Conflict #2: Programming departments are primary operators of most websites, including where and how content & advertising is placed. If we would never allow the PD to determine the on-air spot load, why do we allow them to determine online ad units and placements on the website? Just like your Radio station, the website must be ultimately run by those with ‘web profit & revenue first’ goals.
6. Poor attention to fast changing, online environment. Radio execs typically follow other Radio execs for determining digital plans. Some harshly suggest it’s the blind leading the blind. If Radio barely gets 2% of local online revenue, it might be best to also look outside the industry for best practices in web sales. New competitors like Patch, Reach local and Groupon are ramping up their local staffs, and are going after the budgets in your own backyard. Is your team familiar with these new players and their sales plan? How do you keep up? Do you have a plan to thwart these new competitors? One way to win is to provide Web 101 workshops to local advertisers. By taking an educational approach with clients, they’re more likely to rely on you for all of their marketing needs, and not some outsider.
7. Setting web budgets too low. This little sleight of hand allows sales staff to quickly hit web goals. Once hit, they push web sales down to lower priority. In this situation, money is left on the table and gives corporate management the false impression of successful, local web selling. Making matters worse, this (by default) allows remaining local web budgets to be redirected to online-only companies. The only thing worse? The foolish trick of reps converting spot costs to web, thereby teaching clients that web should always be viewed as a value-add. And please, don’t flaunt web revenue increases based on percentages, when you’re coming off a very low comparable. Better: grow top line, non-Radio business via web and increase overall advertiser count. Make sure every rep knows client’s digital strategy, and grow that share. WARNING: CEO’s & investors will blow a gasket when they find out some hid behind lame % increases and hit wimpy numbers, while your local advertiser base keeps spending more with digital competitors.
8. In-effective inventory & yield management. Nothing says poor web-sales management than seeing a lame Google AD Sense or network ad on your home page. Geez, you can’t sell your most valuable, most powerful ad unit to a local sponsor? That’s like placing per inquiry or PSA’s in your 7:20 stop set on a Monday morning. If more than 20% of your available web inventory is sold to 3rd party ad networks…your local sales strategy needs to undergo a crisis intervention…now.
9. Confusing media kits, sales packages & pricing. Local business owners prefer simple offers, delivered using retailer-friendly vocabulary. They’re not sure of the value of 1 or even 10 million page-views. Most can’t even spell the word: CPM. Excel spreadsheets with ad units, cpm’s and other confusing data only frustrates the advertiser. It also freaks out the sales rep who’s trying to clearly explain the features & benefits of a cross-platform marketing program. Remember: Small business doesn’t care about your cool site chock full of marketing & programming BS. Instead, they want to see OTHER local advertisers looking and performing great using your site. They want case studies with definitive ROI. Do this, and they’ll line up to buy your cross platform and web-only packages all day long.
10. Over-reliance on vendors & research for sales strategy. This goofy analogy says it all: just because I sold you a beautiful kitchen & gave you the best cookbooks, doesn’t mean that you’re now on the way to becoming a master chef !
TV, Radio and Newspaper will need to address these issues, if they want to succeed in the new digital economy.
TV gets 10% of local online ad spends. Radio gets less than 2%. Newspaper shares are in decline. Compare these lowly numbers to online-only companies like Patch, Reach Local, and Google that are now getting over 50% of local ad budgets. Anybody in local media think that’s a problem that needs a little fixing? For sure, we bet the investment folks at Angelo Gordon and Oaktree Capital are getting a little un-easy about this issue.
All is not lost. Even though the local competition continues to grow stronger, Broadcasters and Newspaper can still get back in the game, and significantly grow their web & overall revenue share.
The solution is simple and indisputable: address and remedy the common web sales errors committed by most local media properties. The list below captures and identifies what we refer to as: the 800 lb. gorilla in the room.
1. Top management & owners need specialized web training. How can you manage what you don’t fully understand? Expensive research and consultants are not enough. Delegating sales strategy to a content & tech focused VP of Interactive or Internet manager is risky without knowledgeable oversight.
2. Dangerous thinking: ‘selling web cannibalizes traditional sales’. It’s crazy to think that these words are still being uttered. If those in charge would prefer to focus on their core product, that’s fine. If these managers believe that “web revenue is small, so let’s ignore it”….that’s fine too. But at the end of the day, if you’re not going run your web assets like a profit-first business…then why even have a digital initiative in the first place? Advertisers are moving more ad dollars to online. They can buy web from your reps, or someone else. While web revenue is still relatively small, it is the fastest growing revenue stream. At the very least, local media should focus on growing its overall revenue share, by smartly leveraging its digital assets.
3. Limited web training of sales reps. How can they sell new products without seasoned direction & regular training? Is your staff taught by qualified web-sales trainers, or by a ‘web-geek’? Is your staff forced to endure theory & classroom lecture, or are they getting real world training by being taught in the field? Local media needs to look outside of the industry for fresh and seasoned perspective on web sales. Be wary of training from those who do not have recent local/direct, web sales experience.
4. Management structure conflicts. Conflict #1: Web managers report to traditional managers whose compensation package favors spot or total sales. This may be one of the most critical choke-points of growing online revenue. Where do you think traditional managers will place most of their efforts? Conflict #2: Programming/editorial departments are primary operators of most websites, including where and how advertising is placed. If you would never allow the PD or editor determine your on-air spot load or ad volume, why do you allow them to determine online units and placements on the website? Just like your Radio station or Newspaper, the website must be ultimately run by those with ‘web profit & revenue first’ goals.
5. Poor attention to fast changing, online environment. Traditional media execs typically follow other traditional media execs for determining digital plans. Some harshly suggest it’s the blind leading the blind. with slipping shares of local online revenue, it might be best to also look outside the industry for best practices in web sales. New competitors like Patch, Reach Local and Groupon are ramping up their local staffs, and are going after the budgets in your own backyard. Is your team familiar with these new players and their sales plan? How do you keep up? Do you have a plan to thwart these new competitors? One way to win is to provide Web 101 workshops to local advertisers. By taking an educational approach with clients, they’re more likely to rely on you for all of their marketing needs, and not some outsider.
6. Setting web budgets too low. This little sleight of hand allows your sales staff to quickly hit web goals. Once hit, they can push down web sales to a lower priority. In this situation, money is left on the table and gives corporate management the false impression of successful, local web selling. Making matters worse, this encourages the remaining local web budgets to be redirected to online-only companies. The only thing worse than this is the foolish trick of reps converting portions of the traditional buy to web, thereby teaching clients that web should always be viewed as a value-add.
7. In-effective inventory & yield management. Nothing says poor web-sales management than seeing a lame Google AD Sense or network ad on your home page. Geez, you can’t sell your most valuable, most powerful ad unit to a local sponsor? That’s like always placing per inquiry or PSA’s in your 7:20 stop set on a Monday morning. If more than 20% of your available web inventory is sold to 3rd party ad networks…your local sales strategy needs to undergo a crisis intervention…now.
8. Confusing media kits, sales packages & pricing. Local business owners prefer simple offers, delivered using advertiser-friendly vocabulary. They’re usually not sure of the value of 1 or even 10 million page-views. Excel spreadsheets with ad units, cpm’s and other confusing data only frustrates the advertiser. It also freaks out the sales rep who’s trying to clearly explain the features & benefits of a cross-platform marketing program. Simplicity is always best.
9. Director of Interactive; tech & content background only? Too few Interactive VP’s and web managers are qualified to implement a realistic revenue strategy. While building slick sites and driving eyeballs are quite important, these skills do not equal revenue & profit. Suggestion: hire a corporate VP of Interactive Revenue that reports directly to the CEO. Bonus all applicable staff based on web profit, not web traffic.
10. Over-reliance on vendors & research for sales strategy. Just because I sold you a beautiful kitchen & gave you the best cookbooks, doesn’t mean that you’re now a master chef !
Warning: If you have responsibility of managing the station website and you think web sales is un-appealing, or just not worth the time and effort……you may not want the big boss to read this!
Can Radio get into the hyper-local, and online news business? That all depends if they run their online assets as a business, rather than a hobby. Can they move from old school tactics like mascots and remotes, to offering local business owners a portfolio of online solutions they are clamoring for?
What's Better for Radio; Silly Remotes or Web ?
Radio purists, Broadcast vets, Wall Street and even hardcore music geeks agree on one simple fact: without profit to pay the bills, there’s no programming excellence. So when it comes to the Radio station website and the hyper local opportunities it provides, why aren’t they run in the same financially disciplined way?
When a Radio GM wakes up each morning, what’s likely on their mind? What new Lady Gaga song should be added to the playlist? A morning show bit to post on the station site? While these play a role in the overall success of a station, it’s really not the stuff that keeps the GM up at night. Rather, it’s the sales and profitability issue that makes them toss and turn.
For Radio’s digital initiatives to dramatically drive more cash to the bottom line, they simply need to be operated under the same strict financial, programming and operational pressures of their on-air brethren. It’s really that simple, and there’s no two ways about it.
TIP #1: Web-training for upper management: Understanding new competition, compensation/hiring issues, rate card, forecasting/inventory yield management, overcoming common objections, managers lead by example (not from behind desk), leverage web to increase overall Radio share, take share from TV, Newspaper, and direct marketing budgets.
TIP #2: Beware of web sales trainers that haven’t sold web in years. Would you ever hire an overweight, personal trainer to get in shape? Are you following consultants that sound really smart, ‘wow’ you with gee-wiz technology and talk of ‘extending your brand’ online? Ask them to help you craft a pitch, overcome some objections and close a deal. See how they do with that one.
TIP #3: While research, analysis and classroom lecture is helpful, you need to put money on the books NOW. Be wary of those who will have you believe that expensive data & training will lead you to web profits. The smartest ideas & concepts are worthless, until they are successfully implemented in the field.
Internet business 101 for programming & marketing. When PD’s, DJ’s, marketing execs, & webmasters understand basic online sales models, they create more advertiser-friendly digital opportunities, while developing greater loyalty with listeners. Just as sellers are trained, these non-sales departments need to also be well-versed in digital media & online revenue models. Programming knows how we make money with on-air, now they need the same understanding of our online revenue strategy.
Let me tread here cautiously, since as a former on-air and programming guy, I understand that I could ruffle a few feathers with the following. There’s too much, inherent risk when programming and marketing departments have virtual free reign in managing the online effort. Understandably and with all due respect, sales and revenue isn’t the top priority at this point, for Radio’s creative crew. Their job is all about audience, and they execute on this with great skill. That being said……just as a GM wouldn’t allow DJ talent to pick their own music, or allow the PD to push all the stop sets till after midnight, the GM needs to ensure that business-focused web rules and standards are properly set and adhered to.
TIP: Provide non-sellers with relevant background and regular training in how local businesses are spending their web dollars, the emerging online competition to Radio, and what issues the station sales reps are encountering in the field.
Manage your online inventory like on-air Nobody sells your product & audience better than your own team. Like on-air, local and direct selling of web is preferred over allowing outside middlemen to re-sell or commoditize your unsold inventory. [Read more...]
WE ARE SPARTANS !
So goes the battle cry from the movie….. ’300′.
Spartans are a proud people protecting their land and way of life from the incoming Persians. Do I smell a historical analogy coming on ?
The Spartans: Local TV, Radio and Newspaper properties. They’ve had a very nice run for the past 50 to 100 years or so. Profit margins hovering around 50%, huge barriers to entry, powerful lobbying arms, virtual ownership of all local advertising revenues, etc.
They would like to protect this way of life. It is has been good. Real good.
The Persians: Recently created outsiders like Google, online ad networks like Centro, pure-play sites like Patch, Facebook and ReachLocal. They have their eye set on the next massive pot of Internet gold; the local marketplace. They want to infiltrate, take share, and take-over the lion’s share of local ad expenditures. They’re willing to initially cooperate, share the growing riches, and work with the local properties………until they have their hooks in real deep. Then watch out.
King Leonidas; the bearded Spartan general, desperately tries to warn his Greek countrymen that the crafty and be-jeweled Persian King Xerxes, doesn’t just want to ‘partner’ with them, but ultimately wants to make them their slaves.
In the short term the offer seems genuine and generous. Yet, Leonidas knows it would likely be the beginning of the end for their local state, culture and freedom.
And so the 300 fight……to no avail. They’re crushed by the insurmountable forces from afar.
Alas, the mighty Spartans did not get full support and buy-in from their own country’s leaders. They were held back by the politician’s legacy thinking, fear and lack of vision.
If you’ve seen the movie or know about this piece of ancient history, it may provide some insight as to what local media is facing right now.
What needs to be done? Broadcast and Newspaper need to develop and execute an aggressive war-plan NOW, in order to defeat (or at least keep in check) the forces looking to invade their local media turf.
Today’s lesson: Those who ignore history, are doomed to repeat it.
Ever taken a really good look at some Radio station websites? Aside from the layout and content, (some harshly call them a train-wreck) have you ever wondered how Radio can build a hyper-local business, and drive Internet revenue from these efforts?
Radio managers are knee-deep in these issues right now.
The pressure is on. While Radio’s primary revenue stream of selling spots has become much more challenging, there is an upside. Radio has the best of both worlds; on-air and online.
And it’s not just about selling banners and streaming spots. More importantly: Radio has ability to leverage it’s digital assets, to go after more of their client’s overall budgets. THAT’s a key distinction that separates the winners from the losers.
How can Radio seriously get into hyper-local game? First, it must admit that they need more outside help. Today, there are still too few people inside of the industry that have a handle on the fast changing digital landscape. Research, cool aps, and streaming will not be enough to get it done. And just relying on the local sales managers, or the GM’s to develop a strong web plan will only delay the pain of making a serious investment in hiring and re-training. Finding web-sales experts to help Radio will not be easy, but it will be necessary.
Pandora eating Radio’s lunch?
Pandora is the leading online music site with a serious buzz….and major advertiser support from Planters, The History Channel and many others. Recently, Pandora threw a party at a local Philly hot spot. It was sponsored by Budweiser. Yes, the King of Beers re-allocated a nice chunk of their Philly marketing budget, and gave it to Pandora. They even had one of their online personalities (Kevin Seal) host the gig, and give away prizes. Sounds like a Radio appearance….right?
As a former DJ who has done his share of club appearances, I was blown away by the FREE BEER, tons of T-shirts, and other give-aways that Pandora and Budweiser provided. By comparison, more and more Radio club appearances consist of a ‘street team’; low paid interns that put up plastic banners, and hand out a t-shirt or two. Maybe.
Most beer marketing dollars used to go to Radio…..but this club event was solid proof that major sponsors looking to reach 20 somethings, are ramping up their LOCAL online spends. More of these budgets are being targeted to independent music/entertainment sites like Philly2Nite,……not terrestrial Radio.
Can Radio step up and build online platforms that can attract these dollars ? The answer is YES if they take more dramatic steps to hire for, train for, and invest in these types of online efforts. Simply re-purposing content and firing up the sales troops will not be enough. Can Radio managers handle this challenge?
It was an interesting NAB Radio Conference, (National Association of Broadcasters) here in Philadelphia.
I was invited to do a session on Web sales. It was called: How can Radio learn from Newspaper and other Online Revenue Leaders.
As a former Radio guy, it was kinda nice to be speaking in front of my former colleagues as they grapple with monetizing their Web assets. (Got my start as a Regional Sales Director with Clear Channel Interactive in 1999)
Main take-away: learn from the local, online revenue leaders.
Topics I covered: Common Radio Website Mistakes, Online Video for Sales, Rep Compensation, Job Description Overhauls, Overcoming Common Objections, High-Value Inventory, and Integrated Promotions.
NAB Radio and it’s hyper-local web revenue opportunity. Can the Radio Advertising Bureau (RAB) provide direction and motivation? Will Radio make the same mistakes as some TV and Newspapers? We hope Radio will think differently. Below is a recent presentation we gave to a group of Radio broadcasters at the NAB conference in Philadelphia, 2009.
It’s no secret. I’m bullish on the future of Newspapers. Not only in it’s current print form, but it’s future as hyper-local, multi-media news/info organizations.
Reverse publishing strategy, development of PROFITABLE online video/audio applications, and the re-training/re-deployment of sales & editorial staffs are just some of the areas that I am very enthusiastic about. So, I’ve ramped up my efforts in moderating more conferences that focus on these emerging, revenue generating trends.
Whether you’re a Newspaper exec, or you’re competing against them, you’ ll want to attend this important Web-focused conference. It’s called “e-Edge”. It’s part of the upcoming America East Newspaper Conference, starting March 10, in Hershey, Pa.
I’ll be moderating a panel called “Peek under the Hood”. It’s a look at what Radio & TV are doing to attract business to their websites, and how Newspaper is successfully fighting back with innovative video and audio initiatives.
The panel features:
The talk format is exploding online. Some of this growth is due the ‘downsizing’ of on air talent.
Matt and Huggy were shown the door after 11 years on the air at WYSP, Philadelphia.
Instead of just collecting an unemployment check, they took their show online, and started a regular Podcast. On top of that, they continue to do appearances and get paid to record their podcasts on location….. at clubs.
Click video above to see the mini-documentary that I produced in 2007: The Matt and Huggy Podcast
For the upcoming 2012 Mega-Conference in San Antonio, we wanted to prepare attendees with info that’ll help them get the most out of the … [Read More...]
Did this happen at your Newspaper, TV or Radio station? Consultants told you to hire a separate digital sales staff to win online. You were told … [Read More...]
We monitor a variety of local media websites in markets large & small. They’re a mix of Newspaper, TV, Radio, Hyper-local, and other local … [Read More...]
