It’s Actually Harder In Small Market Radio

Electric power costs about the same in huge cities as it does in the smallest towns.

Licensing fees are also similar.

Cost of sales - typically a percentage of gross revenues - of course is higher in the big leagues, but the piece of pie that it represents is quite comparable.

Sure, payrolls are higher in the majors driven by higher salaries, but people working at a radio station billing $20 million - except for very rare situations - don’t make twenty times the amount that the staff on average at a radio station billing one million dollars.

Even the commercial content is normally worse - hurting listening levels - in small town radio compared to the majors, where a large part of commercial time is national and regional agency-produced creative, fully researched, making use of top writing, announcing and production talent.

Cable TV, satellite radio and streaming media deliver “major” quality radio to every rural community these days and yet local radio is still replete with unimaginative, cliché-ridden spots in spite of the fact that today’s audience has become accustomed to quality production work.

I could offer more examples, but I suspect that these are more than sufficient to prove to you that a Manager or Owner in the small town has to actually be much more hands on than management in the metropolises not far away.

The margin for error is less, which makes it such a pleasure to see so many extremely successful local owners and managers at work, teaching their people to maintain high standards and stay close to their audience.

The formula - for a special kind of manager/owner - still works.  It’s fun.  And, rewarding. 

For Your Tool Kit

My recent items (5 Last) "Measure It To Manage It", Simple Stats To Track,  Gauging Your Growth and Radio Management Vital Signs attracted a helpful, welcome response from Andrew Curran, COO at DMR:

Love your series of areas to measure. 

Since you mentioned having people start a spreadsheet, I thought I’d share with you one that we developed with a variety of Key Performance Indicators in mind. 

Feel free to pass it along (click to download the xls). 

One tab is a detailed view and one tab is a top line management view.

A new acronym to add to your vocabulary:  "KPI."

(5 Last) "Measure It To Manage It"

16.     Number of local stories on your website with listener comments/reactions

17.     Number of blog posts by every personality ranked by page view and responses.

18.     Open rate of your weekly e-mail (to determine effectiveness of subject lines, etc.)

19.     Text Club subscriber rate and unsubscribes

20.     Website Metrics: 

           a.  Unique Users

           b.  Total Pageviews

           c.  Top 5 Most Viewed Pages

 - a final set of numbers from some smart managers willing this week to share what they watch to be sure their stations pace toward their goals.

No doubt, you can think of many more.

So can I, but if you have 20 priorities, do you have any priorities?

Start with this 20 and focus on the handful of them where you find your farthest from where you want to be that will move you forward fastest to where you need to be.

Once you ingrain the levers on them in your daily execution, pick another five and repeat until all 20 metrics are positive.

Only then, start to look for more metrics to measure and manage.

(More) Simple Stats To Track

Readers have been sharing the numbers they watch like clockwork to be sure their stations pace positively.

A few more:

11.     Number of public appearances per week by each on air personality/estimated number of people who attended each appearance

12.     Number of cold calls per week by salesperson

13.     Number of spec spots presented to new prospects per week

14.     Number of irritating commercials which harm listening levels per week

15.     Number of advertisers per month (and names) on your competition, not you

Thanks to BCAB for inviting me to moderate their research panel which featured Chris Byrnes, Warren Kurtzman and Sean Ross, providing the idea for creating a list of key objective management data.

Gauging Your Growth

I started the list with just five.  Now, thanks to many readers, you're going to want to start a table or a spreadsheet to track these numbers on the same date each month:

6.     Annual survey of email database: how satisfied are you 1-10? (% "very vs % not)

7.     # of Facebook friends + gain/loss + followed by # of people

8.     Twitter followers (gain/loss)

9.     Total number of units available for sale per week/revenue = average unit rate (track for total and also by sales person)

10.     Number of different advertisers per month by business category

Radio Management Vital Signs

Crucial (but no-cost) numbers to track to make sure your station is on course:

1.     Call your station’s business office phone.  How many rings before someone answers?

2.     (if you have ratings) Weekly cume (daily cume if PPM) trend

3.     Target demo TSL (daily sessions if PPM) trend

4.     Track streaming hours tuned monthly.

5.     Contacts in your listener email database (grown/loss)

Write these numbers down on the same date every month.  If they're not consistent or even better, growing, you're dying.

What else do you trend to be sure you are on pace toward your goals?
 

The Airlines Do It...Why Can't We?

Just yesterday, I had a client set up a diary review for next Monday, meaning I had to change my flights today. You know the drill. Less than a seven day advance. No refunds allowed. $150 change fee. Plus, a higher fare than I would have gotten with more advance notice.

After a decade of multibillion-dollar losses, U.S. airlines appear likely to profit for years for a simple reason: They are flying less. By grounding planes and eliminating flights, airlines have cut costs and pushed fares higher. As the global economy rebounds, travel demand is rising and planes are as full as they've been in decades.

We always have the parallels with airlines in inventory control. Maybe there's one to draw here.

Less flights, more money. Fewer spots, higher audiences, higher rates, more money.

Does anyone in our business (other than Cox) have that kind of courage?

If you know of any others, please recognize and salute them in a comment, below.

They deserve the success that they are creating right now for their immediate, medium and long term future ... and beau coup props for it as well.

The Infinite Commercial Load

Inside Radio today reports a growing use of :15-second spots and Citadel EVP of sales Mike Pallad claims price may be attracting some advertisers but he believes it’s their placement alongside news, traffic and other programming that’s equally appealing.

“We’ve seen an increase in the demand side from advertisers to :15s,” says Pallad. “The thing that makes them most of interest to agencies is that they’re adjacent to content rather than just a free-floating shorter length commercials.”

Meanwhile, in the last few days I witnessed an ongoing battle between a client PD and GM on commercial loads. A PPM analysis of this station clearly demonstrates that quarter hours with less than 12 or 13 minutes of non-commercial content lose audience to shared-cume competition with lower commercial loads/cleaner quarter hours in the same time periods.

Ironically, the same station just did some research and their listeners didn’t perceive the commercial load to be higher or lower on the two stations. Obviously, the GM felt triumphant at this news, seeming unsympathetic to the equally-obvious usage deficit being caused by minute-by-minute reality.

Earlier, I happened to be in a meeting where a savvy manager was bragging that their company holds the line on commercial unit limits with no exceptions ... until he was informed that his station has been oversold for the last few days and so the morning show had been running 18 commercial units per hour, 30% more than the agreed-upon limit.

Then, there’s a friend and client who gloats about the growth in his internet revenue, so we click to the cluster’s websites only to see more space on the home page for banner ads, flash video of a car dealer walking across the station image info, a dating service click through, help wanteds and half price special coupons to the point that it’s difficult to tell that this is a radio station’s internet presence.

It looks like the inside of a very busy coupon flier.

OK. Times have been pretty tough lately and on one hand we should all be grateful that there’s this kind of demand building right now, perhaps another sign that the recession is officially over and things, hopefully, are getting better.

On the other, as PPM and click-throughs clearly demonstrate which advertising messages engage and which ones enrage, it’s worth counting up our HD side channels, streaming media, mobile, unlimited potential page views, thinking instead of the power of commercial messages embedded in content (charging top dollar) and stop thinking of our inventory as "60 minutes per hour on FM."

New media has taken away all of the limitations so long as we create content which drives eyeballs and ears first.

Yes, nine of ten of your revenue dollars do still come from analog terrestial radio, but tomorrow’s growth is unlimited in its potential IF we focus less on selling spots and more on usage, monetizing, not commercial units. but talent/content which gets the value equation of entertaining and building an audience while driving them to every platform at your disposal.

The potential for places to put commercial messages is unlimited.

Which means that tomorrow’s problem isn’t holding the line on inventory and yield management, but a risk of the infinite commercial load driving average prices down to the point that media can’t afford to create the content users expect.

If we’re moving to more :15’s because it makes our medium more listenable, that’s great.

If it’s because we’re now selling units for 25% of the price we once did, and only staying even by having to sell four times the units we once did, we better recognize that we don’t have a financial plan for a growing business, we have a yard sale.