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Friday, October 17, 2014

(STRATEGY) Radio's Salvation: Innovation


In this new hyper-competitive media world, radio desperately needs innovation to grow its business. In this article, innovation is simply defined as relating the normally unrelated. An example of this type of innovation is the ?Willie Nelson Phenomenon.?

When asked why he became so successful in the early 90s, and how he anticipated and benefited from the country music explosion of that era, Willie replied he saw what was coming up in the clubs and honkytonks?and simply positioned himself there. In effect, he related the normally unrelated: country music stars at the time wouldn?t think of ?covering? what was going on in these venues, they were leaders in innovation ? not followers. Willie Nelson turned this belief around and became an ?Outlaw Country? superstar as a result.

Radio can use this innovation technique of relating the normally unrelated. Over the last quarter century, the number one reason for listener tune-out in radio has been ?bad songs.? Radio addressed that problem with professional music research and increased its ratings dramatically. The number two reason for tune-out is, and has always been, ?bad commercials.? Using similar tactics as for improving music images, by relating the normally unrelated, the important innovation for radio to reduce tune out from bad commercials in the future will be the professional testing of their creative messages and media campaigns.

According to advertising genius David Ogilvie, ?Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals. Research has enabled marketers to take creative leaps. Never stop testing and your advertising will never stop improving.?

Radio has historically been focused on the ?push? process of marketing their inventory. Typically, managers? orders to sales executives have been: ?Generate more sales, more sales packages, more sales calls, more productive sales calls? etc. These directives are all internally motivated: They are, albeit necessary, actions that benefit the station and its requirement to generate cash. Now, with innovation, radio can enter the ?pull? phase of marketing inventory and launch into the true creation of value for clients by delivering the ultimate customer experience.

Customer experience is the "moment of truth" that determines whether clients are satisfied enough to come back again and/or recommend your station to other businesses ? both are outcomes that greatly increase a station?s revenue. Future battles are not going to be won by the stations with the best strategy alone: the stations that will win will be those that can also execute at the client level by delivering unmatched customer experience. A client?s customer experience for radio stations can only be positive if customers get satisfactory results from their advertising investment. For this, clients need more effective messages and campaigns.

Our company specializes in testing radio commercials for their effectiveness and improving media campaigns and we?ve found that listeners do not accurately ?get? the message they are being presented (the one we think we are sending), and the actual message they do get itself is usually far from appealing. The information generated from the proper testing of commercials can show how to make these messages exponentially more effective for your client.

Ask yourself these few questions:
? Would you like a real competitive edge over other radio companies or the new media? While other radio companies and the newer media are still merely ?pushing? their inventory in a desperate attempt to meet their revenue quotas each month, you will be showing customers how to improve the results they get from their advertising dollar. You do this by testing their commercials and media campaigns to ensure they generate a clear message that motivates customers into action for your client. Every advertiser is looking for the best ROI. You can now deliver it.
? Would you like more repeat business? Give a client spectacular results for their campaigns by making their messages more effective and they will return repeatedly. Like the expression ?Happy wife, happy life,? happy clients will tell others ? so you generate new business and they become even better customers themselves.
? Would you like to charge more for your commercials? Higher spot rates due to increased effectiveness are the norm for those who can improve the results clients get from their advertising investment.
? Would you like more control over your stations inventory? A ?Frequency Distribution Analysis? will demonstrate how a client?s commercials can be spread evenly throughout the day (including your lower-rated day-parts) to increase the campaign?s effective cume  A larger effective cume increases the effectiveness of a client?s media campaign and stops the practice of narrowing rotations to meet agency CCP objectives. This will in turn allow you more prime-time inventory (which comes with a higher price tag).  You get more control over your inventory and a higher overall average spot rate.
? Would you like less ?tune-out? from your station because of bad commercials? As mentioned earlier, research shows that bad commercials are a major tune-out for radio stations. However, commercials don?t have to be a tune-out. But you do have to ensure the core message sent is the one received and this core message is attractive to the target.
? Would you like to slow down the exodus to the ?sexier? media? These newer media are now showing the same problems as older, established media; they just don?t work as well as promised. Clicks don't matter, banner ads are not working, pop-ups are annoying, ?number of friends? doesn't mean what they thought, and ?likes? don't mean much. They may be new but they aren?t any better. What matters? The right message and the right media campaign! Get better results for clients and they will choose you every time.
? Would you like remarkable relationships with your clients and advertising agencies? For clients, nothing builds a relationship better than results. For agencies, give them some information they don?t already have so they can get better results for their clients.

As David Ogilvy said, ?Never stop testing and your advertising will never stop improving.? Testing radio commercials is an innovative strategy that will develop remarkable ROI for your station. Sadly, not everyone in radio is going to do this. Your edge is not being the first one to do commercial research, but being the only one in your market to do commercial research.

Testing radio messages and media schedules are relatively inexpensive tactics that will deliver results way beyond more sales training, new business development, or expanding your sales force. This type of innovation will truly lead you to a path of greater revenues and profits.

Neil Gallagher and Mike Anthony are partners in ResearchWorks, specializing in the testing, evaluating, and improving radio commercials for radio stations. For more information, please contact Envision Networks.

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