PUBLISHER’S BEAT
DPARENTI@STREAMLINEPUBLISHING.COM
EVP/PUBLISHER
STREAMLINE PUBLISHING
DEBORAH PARENTI
Thinking Bigger … Beyond The Radio Pie
It’s never good for radio when a station or group finds itself in financial difficulty. Beyond the damage from COVID-19 — piled atop digital competition that entered the competitive landscape over 20 years ago — the bankruptcy filings and maneuvering to bolster balance sheets continue to pack an especially painful punch in the gut. Of course, some players were in trouble long before the pandemic, and critics will be quick to point to self-inflicted wounds. But there is another issue that goes beyond the ongoing crisis we face. It’s the tendency to use bad news coming from across the street to enhance one’s own position. Not that we need crises to beat each other up. It’s a similar tactic to that of reaching for low-hanging fruit. Rather than thinking bigger, everyone goes after the same pot. And that’s the big problem. In Radio Ink’s recent cover interview with Tom Buono of BIA/Kelsey, Tom made an important point that too often gets overlooked by those with an “eat our own” mentality. According to Tom, radio gets less than 10% of the total local market advertising. “Managers need to focus on the other 90% to grow their business,” he said. “If radio is only growing at 2% and you go from a 10% share to an 11% share of radio dollars, you will only grow a little over 2%. If you look at other traditional media like direct mail, which is the largest traditional
media in terms of local advertising, and figure out which of their categories may be vulnerable, you can develop a strategy to take share.” No one would dispute the importance of growing radio’s digital assets, but to neglect the traditional side, which will remain core to radio’s bottom line for some years to come, is to take an eye off the bigger ball still in play. According to PwC’s latest “Global Entertainment & Media Outlook” report, “The largest share of radio spend is still concentrated in traditional broadcasting and is expected to remain that way through 2024. Spend on traditional radio in 2020 is forecasted to be $12.9 billion and will rise to $15.5 billion by 2024.” And while at a faster CAGR, terrestrial online advertising will continue to account for a much smaller share. Which brings us back to “the other 90%.” Television, outdoor, newspaper, direct mail — all are part of the 90% outside digital. All fall into the “traditional” tent and all are competitive with radio’s traditional asset. To ignore or lose focus on these competitors is to miss an enormous bucket of possibilities. As attractive and critical as digital advertising is today, the competitive field is large, and, as Tom Buono notes, “The position that radio finds itself in is that you create the awareness that goes into
that purchase funnel, and Google takes the lion’s share of the local advertising dollars out in the last click of the process. If we can focus on awareness that’s created, the attribution tied to radio, you have a much better chance of growing your share.” And therein lies another opportunity for radio: if it moves from tunnel vision focused solely on capturing the digital piece of the pie to showcasing its competitive advantage in the traditional space as well. Fastest turnaround from concept to execution. Closest to point of purchase. Cost-effective. In virtually any traditional media match-up, radio wins. And it’s accountable. Spots billed are spots aired. If there remain lingering doubts, PwC offers this encouraging prediction. “Traditional radio will get a boost from the growing number of new platforms and distribution routes, including smart speakers, the launch of 5G, and cheaper mobile data packages.” Many years ago, there was a radio campaign targeting print advertising. It consisted of a newspaper cut into a 5 1/2 X 8-inch hardcover book. The point was: “Find your ad.” That creative display packed a powerful punch. Sometimes what’s old can be new again.
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