Investing In Revenue

“As opposed to trying to attract millions of eyeballs and monetize them with ads, branded social networks are less about profitability and more about creating loyal and engaged customers that will ultimately create revenue in more conventional ways.” – Adam Ostrow


The conversation around radio stations eventually seems to wind up in a discussion of how to monitize digital media.  The answer eludes most radio people, because the idea of building loyalty and creating engagement, and then earning from that, doesn’t make sense.  Interesting, since that’s how radio was designed to be “monitized.”

Some time ago most of our efforts were to not only get people to listen, but to be as loyal as possible.  We wanted to build fans, not just listenership.  Over time, especially after the joys of consolidation, it became a battle for “ears” instead of a battle for hearts and minds.  Instead of being a way to more effectively reach people on a personal level, digital media is in danger of becomming another way to sell things to people.

This isn’t one of those, “why can’t it be like the old days” rants.  Instead, it’s a call to arms for those who still understand that the battle lies far beyond the ear.  Digital and social media don’t need to be a replacement for radio, they can actually be integrated into our plans as a compliment to radio, part of the larger media pallet we all need.  But it requires alternate thinking.

First, we have to understand that both radio and digital media are built on fans, not just listeners.  PPM results show the same thing, with the majority of listenership coming from P1’s instead of listeners.  I know there’s a school of thought that radio is simply cume based, but a radio station of a large base of listeners, without any fans, is useless when it comes to making money.  Success lies in the careful relationship between cume and P1, not just one or the other.

I’m going to step out here and suggest that, just as revenue used to be (and probably still is) a by-product of compelling programming, digital media income will be a by-product of compelling digital media.

There’s no empirical research to show this yet, but I’m willing to bet it’s the hardcore fans of a radio station that move product for the clients.  Occasional listeners, especially those we find spending one hour or less with the station, aren’t helping much at all.

A Cold Harsh Reality For Radio

“When you can’tchange the direction of the wind – adjust your sails.” – H. Jackson Brown, Jr.


The radio world is buzzing about my friend Eric Rhoads email “A Cold, Harsh Reality for Radio” at the session at Convergence discussing the future of the digital, converged dash. The comment was made that, “AM and FM are being eliminated from the dash of two car companies within two years and will be eliminated from the dash of all cars within five years.”

Eric loves to shock people and tell them their life as they know it is over. Five years ago at a staff meeting in Rocklin he made a speech saying there wouldn’t be radio in five years. He does that because he has been trying to get people to pay attention to what was ahead for at least 10 years, but mostly people didn’t want to hear it. He’s become much more blunt as we kept moving down the line to the moment of change. I think he’s finally gotten people’s attention. And his case is being proven.

Yes, the “radio” in the car is changing. Showing my age again, I remember when there was only AM radio in the car. Then car manufacturers added FM. No one believed the sky was falling, instead they just began creating content for the new reality of FM.

The turnover cycle for automobile is several years…something Eric once told me ahh…several years ago. What that means is it takes years for sell enough cars to replace technology. Some of the low cost deals and specials from the auto industry may have accelerated that.

As we saw at the December Arbitron conference, there is an organization working with auto manfacturers to design the digital dashboard. Sirius, iHeart and Pandora are all represented in the digital dash, because they have made it a priority and actually done something other than play Chicken Little. Many of us chose not to be a part of that dialogue.

Here are some other things to consider:

* For the majority of people, streaming radio is available right now through a mobile device. I don’t think that will change, because my mobile device will always be more customized to me and my likes than anything in a car.
* Radios will not be eliminated from all cars in five years. At worst what’s now called a radio won’t be in NEW cars in five years.
* As often happens, I’m not sure anyone has really taken the time to find out what the consumer thinks of radio disappearing from the dash. Not having something I’ve always used may not be met with as much excitement as the manufacturers seem to think.
* While everyone is focused on the absence of radio from the digital dashboard, the auto companies are also working on putting unwired Internet in the car. That will allow any station that streams to gain entry. Still think the cost of streaming is too high

Like Eric, I’ve been talking about the future for years. I’m sure my clients thought I was obsessed. Now it’s happening, the comfortable radio business we’ve known for 50 years is changing. Change can be hard, but like the wind it’s neither good or bad. It’s our response to this than makes it good or bad. It’s our choice to either give up and accept what happens, or change how we see radio today in favor of what radio will look like in the future. It’s different, but only impossible if we sit and do nothing. Even if some auto manufacturers do eliminate radio from the dash in two years, it will be several years before we are seriously impacted. We have time to plan and act.

Which takes me to what Mark Ramsey talked about last week. Simply, the conversation shouldn’t be about what platform we’re on, it should be about how compelling our content is. Not how good it is, but how compelling it is. And that’s where the true failure will be, understanding the difference between between creating and copying. . The difference between differentiated and sound-alike. The difference between compelling and good enough. I’m not sure there’s enough commitment to those principles. Many of us are more likely to just keep on doing what we’re doing on other platforms, as if that will make the difference.

None of us will escape the results of what was discussed at Convergence, but we can adjust our sails to the wind.



A friend sent me this link to look at how Pandora used micro-targeting to deliver a marriage proposal via their advertising. It’s a nice story, but to me it’s more about their ability to deliver such highly specific messages. While Pandora is using it to attack local radio, it points out a couple of important things:

1. Pandora lives in the new tech world, so they’re pushing out new boundaries to become more local. We live in the radio world, and are trying to find out how to use social media, another personalization tool, to get people to listen to radio. Which do you think will win the technology battle for personalization in their content?

2. We radio people are more creative than Pandora when it comes to relating to the target and being personal. Or at least some of us are. The question is, are we developing new distribution channels that will help us be more relevant and personal? Are we embracing technology toward the totality of media with the same effort Pandora is in finding ways to be relevant and personal?

I love radio, and believe in its long term sustainability, as long as we’re not blind to the innovation around us. But if we continue to be inwardly focused, looking for ways to use technology and social media to drive people to radio, without understanding that the model has been shifting to being outwardly focused, toward the listener/consumer, we’ll eventually lose. We know that, but we’re so used to doing things the radio way, and seem to believe we have all kinds of time before we need to change.

If we’re not careful we’re going to wind up being those old people complaining about the new fangled things the kids are doing, not understanding why they’re doing it. We’ll be reading old timers magazines about the good old days of radio, just like our parents and grandparents have now.

And that would’ve a shame.

The Medium Is Still The Message

“Platforms will change & shift. What goes in them are stories. Invest in great storytelling.” Wendy Clark, Marketer


There’s a lot of talk in the industry right now, but I’m not sure we’re all singing the same song. What I hear revolves around supporting radio, and that may be missing the
point. Let’s be clear: I love radio. It’s given me a career that I would have never had otherwise. But things actually do change, whether we like it or not. You can’t fight change – if you do you will fail. The future is about all media, not just radio. It matters less what you’re doing now than it does what you’ll be doing in the future.

As I look at today’s successful radio, and the changes and needs in real people (as opposed to radio people), it’s clear we can have a future if we want. We just can’t have yesterday’s future. That’s really a rough statement, because the people in charge of radio fight change. It messes with what we’re been familiar with, and what we’ve built our success on.

Here’s the deal. People will not stop consuming media. But the media they consume will change. If that’s not true AM radio and 8 track would still be king. Our conversation should be less about radio, and more about the future. Instead of clinging to a media that is popular now, but on the cusp of waning, let’s focus on what will be coming in the future. We all love the Wayne Gretzky quote skating to where the puck is going, until it relates to us.

Am I being redundant? If so, it’s just to help us understand that future media will be about the story, not the media. Do any of us say, ” I’m a move fan so I go to see all kinds of moves?” Or do we enjoy movies with a great story? When a great listener calls in, is it to make a point, or to tell a story? Are our best bits about facts, or are they about stories. When a radio listener tells you about something you did on-air, is it about a contests, or a story you told?

Do you think people talked about the theory behind electricity, or that they saw light? Does the story about you favorite car have to do with mpg or the story of how it made you feel?

Great media, be it the movie ET or the wreck at Daytona, has to do with the story. And if the story is the difference, the media is secondary. I’ll bet whatever narrative your station has is more important than the media, and that the story can be told on many different media. It’s the story that counts. not the medium.

If you look at media as the medium for the message, then the message becomes more important than the media, and you’ve made the leap from radio to media.

The Future Is Yours To Write

“There’s something happening here, what it is ain’t exactly clear.” – For What it’s Worth, Buffalo Springfield


As I sit in my hotel room in Mexico,watching the waves come in I find myself pondering radios future…because it’s my future too. But as Buffalo Springfield says, it ain’t exactly clear. My friend Mark Ramsey blogged about that every thing recently, and thinks there are two stories running in radio broadcasters heads.

The first story is “one where radio reacts reflexively to claims that “nobody cares about radio anymore” with evidence to the contrary. It’s one where broadcasters illustrate radio usage as being as great or greater than ever despite the huge number of distractions consumers have today that never existed before. It’s a story where we attack the new competitors as being “outside” our category or being “less than” radio in one way or another. As the attention and interest surrounding radio alternatives rises, we go for the jugular. We recognize that advertisers are attracted by these shiny baubles and fear the notion that they will take their dollars, previously earmarked for us, and devote them to these new ideas.”

This is a story of “if I close my eyes no one will see me.”. That worked when we were kids worried about monsters in the room at night, but it’s pretty delusional for adults of today. Even if it’s not exactly clear, there is something happening here.

The second story is one where radio welcomes new competitors because in the cold, harsh light of day those competitors may earn a seat at the table, but it’s still the kids’ table. And smart broadcasters know that these competitors will simply make their industry better, because that’s what competitors do.

This is the story where radio acknowledges that while reach is still awesome, folks are not listening to radio as much as they used to and that’s okay. Why? Because it’s not radio’s fault – it’s not because radio’s “bad.” It’s the “fault” of the zillions of alternative ways people spend their time nowadays and it’s why NO mass medium has the same intensity of usage it had 20 years ago. So get over that. The listenership is not going to iPods or Pandora or wherever. In fact, it may not be listenership that’s going anywhere. It’s time that’s going places. And time will follow whatever fun and entertaining things can fill that time, whether those things are audio-only or not.

Being a change agent, I chose the second story. In the 70’s it was pretty much radio only…if fact AM radio only. We were in control and could do what we want. Then came FM, and later on Al Gore invented the internet. Oh yes, then Steve Jobs put music on the telephone. A whole new playground. There are now hundreds times more attention grabbers than there were in the 70’s. And…wait for it…things aren’t going to get any less distracting. People aren’t going to drop other media to return to their one true love, radio.

Let’s forget about radio for a minute and think about people instead. We all know there are people who only want the music, and nothing else. Focusing intently on the music and paying scant attention to everything else will only hasten our demise. Others, like Pandora, have an on ramp for those people because it is only music… we don’t. Those people are going to go to any media that gives them their music without talk. We aren’t going to change that. Then we have the attention deficit disorder generation who actually are going to chase after the newest thing. We can’t change that either.

So what can we do to continue success? Forget the past and focus on a future rooted in the reality of today. Stay focused on people, the listeners who are loyal, and what they want. No, really, what they want. The reasons they listen to you beyond the music. The actual essence of the brand. You need to figure out how to be magnetic enough to draw listeners away from other sources, to you.

One answer goes to people, and by that I mean your people, the ones at the station. If listeners can get your music elsewhere, the number two success element of the station is who is on-air and who backs them up. That’s another blog for another time, but the answer to writing your future starts with forgetting the good old days and paying attention to the realities of today. Music is the foundation, the stage everyone else performs on, the start of your brand. But it’s not the only part of your brand.