However, this message which purports to be from an un-named Cumulus Market Manager certainly has the ring of wisdom through personal experience to it:
I learned a lot about Wall Street from Lew and certainly improved my vocabulary of business jargon.
I agree with you, Jaye, that the listener has paid the price because so many shifts are now sweepers and music but there is another element that most, especially Lew, do not consider and it contributes to decreasing the listener experience and makes the rates lower.
Here’s Lew’s excuse:
“The radio business has digressed into a wholesale model where the industry sells to a small concentrated group of sellers (ad agencies) in bulk who in turn sell the product at commoditized rates. It is completely commoditized and as a result there is an extreme downward pressure on rates. It’s compounded by the one part of our business model that won’t change which is our fixed inventory model. “
“We have to create more demand in order to give us greater leverage over the buyers so we can transform ourselves into price setters rather than price takers. That’s the change that has to take place from the sales standpoint on the revenue side. However affecting that kind of cultural change in an organization is incredibly difficult to do. You have to have basic fundamental behavioral changes within an organization.”
The smoking gun here is that clients buy production. Good production differentiates a station.
In many cases, you can’t run the same commercial on the country station, the CHR station and the active rock station and get equal results. The audiences use different slang, have different values and react to different types of calls to action. A sales person WITHOUT PRODUCTION THAT WILL ACCOMPLISH THE CLIENTS OBJECTIVE is a rate negotiator.
When you control the creative…you control the account. “There is an extreme downward pressure on rates” when the client controls the creative.
Yes, you have to have enough sales people for coverage but you also have to arm them with at least one person who is better than the local advertising agency at creating compelling production. Instead, we’ve fired most of those people or loaded them with so much imaging they can’t think straight.
Programmers have given up on production too because they think it is tune out regardless and don’t think about how 20% of every hour is made up of commercials.
In Cumulus markets across the country, the same jocks that wouldn’t dare lend their voices to create a good spec without someone greasing their palm are now answering the phones in the lobby when they aren’t on the air because Cumulus fired the receptionist.