By Holland Cooke
Media Consultant

NASHVILLE — Each year, there’s one session at the NAB/RAB Radio Show I reckon that – alone – was worth the trip.  Researcher Gordon Borrell nailed it this year with his presentation “Reach Beyond Radio: The Local Media Company of the Future.”

He began with a-whack-on-the-side-of-the-head, saying “It’s as if it’s 100 years ago, and we’re blacksmiths, watching our customers ride by in cars.”  Instead, “be in the transportation business.”

Admittedly, I’m a fan of Borrell’s work, and he and I share some client stations.  But the future he described isn’t conjecture.  Specific action steps he detailed flow from proprietary survey data including interviews with 7,500+ of the small businesses radio wants on-air.

One problem: They’re moving that money online.  “They don’t care about CPM, they care about ROI,” he told us, as $65 BILLION in local advertising is being spent on digital in 2016.  62% of advertisers surveyed say they advertise on Facebook, and that’s doubled since 2015.  90% say they’re satisfied with results. 

“Don’t be happy with 100% Digital growth.” 

The specificity of his data – and verbatim comments from advertisers surveyed – is as chilling as they are useful.  So, if you missed it in Music City, you can see video of Borrell’s among other Radio Show sessions here http://www.radioshowweb.com/sessions/liveStream.asp

Short version:

• “Advertising is losing luster. Marketing is gaining steam.”
• Year-over-year, “Local Non-Digital” is up 1.9%; “Local Digital” is up 37.1%.
• Next-year projections: Local Non-Digital declines 6.9%; Local Digital grows 22.4%.

15% of businesses surveyed plan to spend more on advertising this year than last; but 40% plan to increase their digital budgets.  

“When they cut one medium they spend it on another.”

Asked “What best describes the source of funds for your increased digital spending?” more than three-fourths surveyed are funding digital advertising “by cutting traditional media budgets.”

Who is in the cross-hairs?  Percent of those surveyed plan to increase spending as follows:

• Internet: 53.9%
• Broadcast TV: 30.4%
• Direct Mail: 23.6%
• Cable: 21.8%
• Radio: 19.6%
• Newspapers: 11.4%
• Cinema: 11.1%
• Magazines: 10%
• Directories: 6.5%

Of all the media on that list – other than Internet – Borrell says “they’re picking 2 to 3 tradition media” to cut, to fund those digital plans.

Radio: Come down off the ledge!

“It’s not ‘us’ vs. ‘them,’” Borrell says, noting that, in 2016, 19% of local digital advertising was received by a media company that also sold ‘traditional’ advertising.  Growing THAT is radio’s opportunity.

Asked “What is your best source of new customers?” businesses surveyed say, unsurprisingly, “referrals” (66%).  But look at #2 and #3:

• Company web site: 47.9%
• Social Media: 46.7%

“More than twice as many say their web site or social media page generates [more] customers than media advertising.”  We already know how well radio drives web and social traffic.  So radio stations that facilitate these digital platforms – and use transmitters/events/etc. to promote accordingly — stand the best chance of NOT being among those 2 or 3 media that get cut.  Don’t just sell spots, be the marketing consultant.

Herb Tarlek doesn’t cut it.

Chilling verbatim comment which Borrell says was a recurring theme: “Traditional media companies do more harm than good when they send out uneducated reps that sell a customer something they can’t fully understand themselves.”

Career tip for on-air talent: Get good at digital.

Career tip for management: Watch the video. 

If you missed them, here are:

• My notes from RAIN Summit/Nashville http://www.talkers.com/2016/09/21/rain-summit-nashville-2016/
• My notes from Radio Show Wednesday sessions. http://www.talkers.com/2016/09/22/a-snapshot-of-where-the-radio-industry-is/
• My notes from Radio Show Thursday sessions. http://www.talkers.com/2016/09/23/radio-show-wrap-up/

Holland Cooke (HollandCooke.com) is a media consultant working at the intersection of broadcasting and the Internet; and his “Grey is Gold” video is this month’s feature on TalkersTV..

Tags: Gordon Borrell, Holland Cooke, NAB/RAB Radio Show, RAIN Summit

Category: Advice, Analysis