Radio is indeed proving that it can stand the test of time
By Natalie Swed Stone (from March's RBR/TVBR Solutions Magazine)
The digital revolution and all that accompanies it has forever changed attitudes, expectations and content. The competition is now infinite. Media companies, once defined by their distribution strength, are striving to maintain their share in an ever-expanding sphere by crossing over into new platforms. Companies that once had a handle on their competition today do not easily know just who their competition is and all media now compete with each other in a much broader way than ever before.
Just two years ago while much of this change was beginning to take shape, radio companies were conducting business as usual assuming this revolution would not touch the medium and that radio's value of the past would somehow carry it forward.
But distribution changed everything. The increase in competition on the internet and in the sky showed consumers they had vast choices and options-places to go.
And many of us began trying these outlets ourselves or watched as others became enamored of the newer channels.
And radio began to adapt-by admitting that the discussion of commercial placement, quality and amount is indeed crucial to the survival of the medium and by admitting that the programming needed to evolve in a much more targeted way.
Ironically, radio, once considered the most highly fragmented electronic medium with opportunities for specific targeting was, after consolidation, widely considered to be programming to masses with the same few formats and the same few songs.
And consolidation also brought economic challenges leading to increased clutter. No surprise then that the competition knew exactly how and where to hit! And hit they did via massive PR and marketing campaigns.
And then it became all too obvious to radio broadcasters that the only way to win was to change. And change they did. In 2005, radio began to fight back by introducing new formats, new personalities, less clutter, a renewed emphasis on web offerings and crossover into online radio. Most impressively they announced the formation of the HD Radio Alliance with introduction of HD2 formats and multicasts and an eye on serving the consumer and filling market voids. They are looking at offering commercial-free stations and as wide an array of formats as possible with station groups working together to program a given market vs. programming against each other.
This alliance is a huge step forward and demonstrates that the radio operators are thinking much differently (much bigger) than they did in the past. They understand that the focus has to be on the consumer and on recognizing and meeting the needs in the marketplace. Listeners now expect an array of choices and it appears as if they are going to get all that they expect, namely thousands of new side channels, thousands of new streams and programs and formats never imagined. The alliance will include a heavy consumer marketing campaign and visits to electronics manufacturers and automotive companies.
With this choice and ultimate consumer control comes another challenge for those of us in the advertising business-where and how to place commercials. Advertising will surely survive since the consumer cannot be expected to subscribe to everything for the promise of no commercials. They don't have enough money for that. Obviously, while the airwaves have been somewhat limited in selection and over-commercialized in the consumer's eyes (ears), subscription seemed attractive and a fair price to pay vs. the alternative and program your own (ipod) an attractive and novel experience.
But 1) there will always be new music to discover and radio will offer that and 2) with so many music-only formats, personalities will make a comeback as music directors/guides/advisors.
Not everything can be subscription-consumers cannot support all of it.
The next phase is relevance and personalization-and a consumer contract where the consumer agrees to a certain number of commercials and chooses which ones on an opt-in and partnership basis in exchange for free access. This will ensure relevance and minimize their out of pocket costs. Adding channels via HD will afford the opportunity to significantly reduce clutter per channel and provide more balance -- making the medium more attractive and competitive. It will also provide creative and selective targeting. The same way you can now choose your formats, online or over the air, you will soon be able to choose your commercials-by opting-in-selecting categories and even advertisers. These can be local, regional or national commercials. As the technology makes commercial delivery easier, ROI will improve and more advertisers will participate.
Gone are the days of forcing programming, personalities and commercials on consumers. Gone are the days of the distributor as king. The programming is the differentiator-the consumer the navigator of that programming. The programming will be available via different platforms-satellite, online, mobile and digital. This is the next phase of commercial radio. This next phase brings enormous challenge-and it will require much collaboration in technology, and research especially-and in sales/packaging and systems management.
We need research that tracks who opted in to which commercials in the same programming and who were the same people that opted in to different programming-we need to sort by who they were, where they lived, did they buy, etc.
Radio's digital application has much promise since it will remain local but will have the same quality as national programming -offering tailored and nuanced appeal to different markets and aggregating consumers in different segments.
We need research that pulls all of this data together for all forms of radio-and we will need it in real time. We need media partners who can aggregate their assets across platforms in a customized, integrated way and present electronically with interactivity so that it lives while the schedule is running
In this world of accountability and ROI, potential impressions will be obsolete-a precise measurement is needed and coming-and opt-ins for direct and deeper contact, will follow.
Media will be valued for its ability to connect and engage. And advertising creative will have to stand on its own-no longer a variable in the effectiveness and ROI equation with targeting and commercial avoidance out of the way, the creative execution and effectiveness will be known and measurable.
And the reach/frequency metrics will change. We will likely pay more for fewer, more impactful messages.
Radio will stand the test of time-but it needs to take on a new partner-a silent, but powerful partner--the listener.
The consumer has caught on and we are now in their power. It's not a bad thing-It just involves a new contract and new strategies. But few would disagree that radio is a vital medium going thru a very exciting time!
Natalie Swed Stone is the US Director, National Radio Investment, OMD. You can reach her at [email protected]
