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.


Cecil B. DeMille said...

The problem is packaging. If you want advertisers to jump on the over-50 bandwagon, you need to package it as a trend.

"The newest trend indicates that, as age increases, so does income, with people over 50 having the most disposable income of all demographics. EARTH-SHATTERING! Be the first to capitalize on this new trend!"

You'd have more luck that way.

Doug Garnett said...

Agree on the packaging, Cecil.

And we need a new name. "Baby Boomer"s is passé. What about the "Last Millennials"?

"The new powerful demographic. The Last Millennials have changed everything you know about advertising. They've digital's newest frontier and they even know how to read!"

Doug Garnett said...

Sure wish Disqus let me fix typo's. :-)

The sad thing is... Speaking to the over 50 crowd WOULD change everything most agencies know about advertising. In fact, they'd have to learn to say something important. THAT would be the radical change.

Jim Powell said...

Ha Ha! Over 50's. Radio!! What next town criers?

Cecil B. DeMille said...

We can dream, Doug. We can dream.

ALVE said...

Not finding video of your presentation in Indy

BingoJoe said...

The problem ad agencies have with over-50s radio — really, over-50s anything — is a result of the under-40s staff they hire.

Seriously, very few understand the market. Mainly due to them seeing little value in the demographic, except as a well of money. Which is just a very sad reality these days.

Educating marketers and advertisers may help, but it requires a societal change in perception, which does not come easy, and typically requires the oppressed to take action themselves.

Growing up in the 70s, I can't remember my parents trying to be/act younger than they were (except for one night out at a disco... and that was their last). And they had full lives (still have, as best as they can in their 90s). But starting in the 80s things began to change, and today it's a full-blown epidemic. It seems like older people cannot avoid being desperate to stay young. At least until they hit their mid-60s.

My thought is, "Stop buying into the folly and maybe regain some respect."

Will that help save radio? No, not likely. At least not the way we've understood radio.

Radio is going the way of print — it will be around for the foreseeable future, but in a revamped version. Which is fine. Things come, things go, things change.

R. Nichols said...

Hi Bob...
Radio as a medium is on the verge of implosion and extinction...not from any outside source or technology or competing platform, but from within. (Like any great empire, they always crumble from within). As a marketing and advertising firm, we've watched as radio through lack of innovation & new ideas in programming has become less and less relevant to consumers. A radio station in 2014-15, sounds and programs just like a radio station of 25 years music..etc. No new ideas, no forward movement, no "out of the box"(hate that term, but couldn't think of better one) thinking to reach more audience, bring lost audience back...nothing. In our view at our firm, radio has become the dinosaur that is standing still while the meteor is about to land on it's head. So, for radio people who reach Mr. Hoffman's blog we say get off your ass and stop thinking you know everything...instead bring into your industry new concepts, new ideas, new programming to reach today's consumer. Otherwise, be prepared to be buried in the grave right next to the printed newspaper...did you learn nothing from them?