3-14-2012
It's pretty common, whether it's in the GM's office, in front of a client or at the corporate company meeting. Nearly every manager believes every competing manager is cutting rates, driving the market down. How many of you reading this have ever done a dial for dollars phone blitz? Valuable inventory is a terrible thing to waste of course.
READ OUR RECENT COVER STORY WITH ALFRED LIGGINS HERE
So, what happens when 6 or 8 or 10 salespeople get on the phone, pizza is called in and advertisers salespeople worked so hard to develop relationships with are offered a deal on X number of spots they simply can't refuse? Like magic, you sell all that valuable inventory. (And you probably even sell some inventory you didn't have, but that's another story.) Radio One CEO Alfred Liggins says he's learned of a practice Clear Channel has incorporated that's driving rates down, which was another factor that lead to an awful quarter for the company.
Liggins says Clear Channel is running a program called "Best Rate." "A bunch of guys in San Antonio, it's not even handled locally are acting like an airline reservation system. They are using technology to be able to lower rates faster than anyone else." Liggins has been consistent with his criticism of Clear Channel and his accusations of driving rates down. Industry group heads have also been very critical of the industry about rate. However, there doesn't ever seem to be any follow through to hold on rate or reduce the amount of commercials played every hour. And advertisers are not fooled. They know radio has a glut of inventory in every market. They know that if they wait it out, most salespeople will return with a better deal. Or, perhaps, a telemarketer will call and offer them a great deal at a rate they simply can't refuse.
(Updated at 8:00AM Friday)
We reached out to Clear Channel for a comment on the Liggins comment:
(3/16/2012 6:23:43 PM)
I am with Mr.Liggins. I have to compete with CC in
LA against a cluster of 8 stations sold through Katz Media which controls almost all national media buys
and I could tell you stories about them that would make your hair stand on end. And it gets even more interesting if they combine all that behavior with a package with another cluster in the Market. Do people realize that Bain Capital/Wall Street owns a chunk of CC/Katz. In my opinion
the foregoing supports Mr. Liggins.
(3/16/2012 2:56:56 PM)
Sounds like typical excuse making... someone looking for reasons to cover their a$$ thats so typical in radio, at least for the 30+ years that I have been a part of it.
Best Rate does nothing of the sort that Liggins is implying.
But its typical of corporate types who often got to where they are thur any means other than achievemnt to deflect any blame for performance in any way that they can to achieve their ultimate goal..keep that high wage on their W2's coming in.
Having worked as Sales & Strategic Marketing Administrator at our local Clear Channel cluster almost a decade ago, I can tell you this practice is nothing new.
It was generally done in January, a one-day blitz to kick off the year's sales, multi-station "packages" that cut standard rates by as much as fifty percent (depending on the station). And if the numbers weren't up to expectations, we'd do it again mid-year.
This was part of the Clear Channel playbook and apparently little has changed.
(3/16/2012 2:18:35 PM)Having worked as Sales & Strategic Marketing Administrator at our local Clear Channel cluster almost a decade ago, I can tell you this practice is nothing new.
It was generally done in January, a one-day blitz to kick off the year's sales, multi-station "packages" that cut standard rates by as much as fifty percent (depending on the station). And if the numbers weren't up to expectations, we'd do it again mid-year.
This was part of the Clear Channel playbook and apparently little has changed.
(3/16/2012 1:51:20 PM)Imagine that! Mr. Liggins is complaining about Clear Channel managing their inventory more effectively. Most business sectors have been managing inventory to optimize revenue streams for years. Apparently it's working well for Radio, too, because Clear Channel clearly (pun intended) found a competitive advantage over Radio One.
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