Daily Archives: October 29th, 2008

National Radio Needs a Digital Overhaul

Recently more and more national advertisers have begun naming Interactive Ad Agencies as their agency of record and putting them in charge of either running or coordinating their entire marketing effort. This is noteworthy for several reasons. Obviously, the Agency of Record for an account controls the relationship with the advertiser as well as the strategic spending.

In a recent article, Ad Age gave several examples: “last spring IMC2 was tapped to handle all creative, media and strategy for Mars Direct, which makes personalized M&M’s and Dove chocolates; and AKQA is getting ready to roll out TV and web campaigns for Flip, the sub-$100 digital video camera that has created amateur cinematographers out of the YouTube masses, as part of its agency-of-record duties.”

The implications of this shift for the radio industry are significant. Radio sales firms are heavily staffed with sellers who are aquainted with single focused expertise. For example, radio sellers are great at selling :30s and :60s and discussing the ins and outs of Arbitron, but are like fish out of water in a conversation about impressions, cpm, cpp, ctr, and Comscore.

The fact that digital shops are so focused on those metrics is precisely why advertisers are choosing them as AOR. According to Ad Age, “Late last year, Forrester completed a study of several interactive agencies. The report’s author, Brian Haven, argued that interactive shops are closer to the consumer, in a better place to mine the rich insights and data available via the web, and in the right place at the right time to capture consumer behavior changes.”

Advertisers have been calling for more accountability and evidence of return on their expenditures for a while now. Unfortunately, large sales firms have allowed themselves to remain distracted by the “bird in hand” rather than retraining significant portions of their staff to sell to digital shops. Rep firms are now beginning to sell digital assets on behalf of their clients, but they need to focus on selling those assets to digital shops, rather than trying to educate and convince traditional buyers to buy mobile, streaming, and website assets.

The industry is changing. The question is, how can the current system of buying and selling radio on a national level adapt? (An especially good question given that last week Interep announced that it has filed for Chapter 7, spelling the end of one of the two major radio rep firms.)

Broadcasters should work now to develop or adopt a digital system that allows them to deposit their inventory and allows buyers to easily purchase inventory. Rather than dedicated reps selling spots on certain stations in certain markets and competing against other reps and stations for higher rates and shares, a team of national sellers should spend their time bringing more national advertisers to radio, and leading them to this digital marketplace where units are bought and sold. Everyone in the industry should focus on growing the pie, and making radio in all its forms more available and accountable on a national scale. Can it work? I’m wondering how much more there is to lose by trying.

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