Radio Hurt By ‘Woeful Lack Of Industry Advocacy’

Entercom’s David Field — mountain climber, M&A man

By Adam R Jacobson

Radio is the best bang for the buck.

Radio has tremendous ROI.

Radio is a medium that consumers stick with.

Is any CMO or brand manager listening?

Entercom President/CEO David Field certainly hopes so, as he assailed Madison Avenue for spending “hundreds of billions of dollars” on media “that reach fewer people for shorter periods of time, charge more and deliver lower ROI.”

In making the comments during Wednesday’s Q4 and Full-Year 2016 conference call with investors, Field also gave a tip of the hat to the nation’s No. 1 radio company by number of stations — iHeartMedia — head of their Feb. 23 Q4 and FY 2016 earnings release.

Speaking about Entercom’s opportunities following the completion of its tax-free merger, via a Morris Reverse Trust-fueled transaction, with CBS Radio, Field said the new Entercom will most notably build in the digital realm.

But, perhaps the biggest opportunity of all, he said, “is the seemingly irrational disconnect between radio’s actual share of total ad spending and a significantly stronger value proposition. The simple fact is that radio has long been highly undervalued and underappreciated by the advertising community. It is extraordinary that radio is an immensely effective medium that is No. 1 in reach, No. 2 in daytime usage, is the least disrupted of any traditional medium and is arguably No. 1 in ‘return on investment,’ yet receives only 7% of ad spending.”

Asking why radio doesn’t get a higher share of ad spending — one that is “more consistent with its compelling attributes” — Field had an easy explanation: Radio is “an incumbent media competing with shinier and sexier alternatives.”

Additionally, he said, “Radio has suffered from inaccurate perceptions … It has also suffered from a woeful lack of industry advocacy that enabled false perceptions to permeate the thinking of advertising leaders. In short, radio has been punching below its weight class.”

This perception has started to change in recent months, however. How? Field cites efforts by iHeartMedia, which became “the first radio broadcaster with the scale and the resources and the desire to address this issue.”

He saluted the company for its work “to elevate their brand and advocate the power of radio to compete more directly with other media.”

The result: iHeart is starting to move the needle “as we have seen in their impressive topline growth in recent quarters.”

With the CBS Radio merger, Entercom will have the scale and resources to compete more effectively with other competitive ad-based media, Field believes.

“With the second major voice advocating the power of radio and presenting customers with the compelling advertising alternative, we will help to enhance radio’s perceptions and cause advertisers to give radio greater consideration for additional advertising and marketing spending,” he said. “This is particularly true as other media continue to wrestle with significant disruptions and other challenges. Making radio a more viable and competitive choice for agencies and customers is a win for everyone … While the theoretical potential is there for radio to grow with 10% share of ad spending or higher, the shift from just 7% to 8% of ad spending would have a tremendous impact in industry growth and performance.”