September 17, 2014
I Can Dream, Can't I?
Last week I had the pleasure of delivering the keynote address at the radio industry's annual Radio Show in Indianapolis, sponsored by the Radio Advertising Bureau and the National Association of Broadcasters (you can watch my talk here.)
This was a pretty big deal for me. Other speakers including Alan Mulally, former ceo of Ford and Boeing, Dan Harris of ABC News, and Governor Mike Pence of Indiana.
The talk went better than I could have dreamed. I actually got a standing o, which in all my years of speaking I never got before.
As always, there was a contingent of online people who hated my talk. No surprise there.
Radio, like all traditional media, is having its share of problems. While Americans still spend more than twice as much time with radio as they do on line, radio’s revenues are flat while online revenues are soaring.
And, as you might suspect, there are people busy trying to sell the radio industry on digital miracles. I wasn't quite clear on what the digital miracles were – digital delivery of radio programming; sales of digital ads on line and on websites; online station promotion; or listener engagement with online content and social media.
As in so many industries, it seems that it is all lumped into one nebulous bundle of magic called “digital.” I sensed that there might be a dangerous fantasy afoot that “digital” (whatever it means) is the road to salvation for radio.
One of the reasons for the power of this fantasy is that in recent years radio stations are deriving a little over 5% of their revenue from selling digital advertising. While I am skeptical of the power of most online advertising, I am very much in favor of making money any way you can.
I am no expert in the radio business, but it appears to me that the danger is in believing that the digital revenue is independent of the traditional on-air revenue. In fact, 100% of the digital revenue is secondary to listenership. Without listeners, no digital advertising, and no online ad revenue. It all starts with listeners.
The proposition that radio can increase listenership substantially among young people seems highly improbable to me, regardless of what digital magic the industry chooses to employ.
But radio does very well with people over 50. And people over 50 have and spend most of the money in this country. Unfortunately, people over 50 are poison to advertisers. Despite the enormous opportunity that they represent, advertisers are stuck in the 1970’s worshiping at the altar of youth.
One of the ideas I expressed in my talk was that the radio and television industries should undertake a major initiative to educate marketers and advertisers on the incredible opportunity that people over 50 present. The hope would be that if advertisers and agencies would be exposed to the facts, their antiquated thinking and ingrained prejudices might be overcome.
This may be the greatest fantasy of all.