WHY THE DOOM AND GLOOM?

A BRIEF LOOK AT THE PAST TEN YEARS

When we wrote Radio Advertising 101.5 back in 1998, commercial radio was a hot medium.  It was pretty much a given that, if you had any kind of advertising budget at all, you'd want to put at least part of it into radio advertising.  Since then, a lot has changed in the world of communications.  This is a quick list:

- the rise of the internet

- satellite radio

- Ipods and podcasting

- skyrocketing radio rates

- preference for cost over quality

- insistence on immediate results

- the 30-second commercial unit

Let's look at each of the items on the list:

The Rise of the Internet

The internet has not only changed the way companies advertise; it's changed the way companies think about advertising.  For one thing, because it's so cheap, it's made traditional media look expensive.  Never mind that it's still not clear whether internet advertising is worth even the little it costs; people like the idea of cheap advertising.

Satellite Radio

Besides the advantage of being able to listen to much better, more focused playlists than any commercial station can offer, satellite radio has the advantage of a commercial-free environment.  At least part of the population is willing to pay ten bucks a month for those advantages.

Ipods and podcasting

This is a much bigger development than satellite.  Podcasting provides the opportunity of complete selectivity and portability.  You control what's in your playlist, and you control where and when you hear it.  You can even plug your IPod into your car's stereo.  Plus, of course, it's commercial free.  This is a tremendous advantage over both commercial and satellite radio.

Skyrocketing Radio Rates

This is a major deterrent for advertisers in the major markets.  In Houston you need to spend at least 20 thousand a month to advertise on the radio.  This has cut out most of the smaller and newer businesses, resulting in fewer overall advertisers, and less adventuresome advertising.  Maybe your markets aren't as bad off.

Cost over Quality

Admittedly, people have always looked for ways to get something a little cheaper if they can.  But until recently, they recognized the tradeoff: you get what you pay for.  But dot commerce has forced a whole new round of price competition among companies, resulting in shrinking margins and unprecedented cuts in operating costs.  Ignoring for a moment all the employees who have lost their jobs, the other effect has been an attitude that, when it comes to advertising costs, price isn't the main thing; it's the only thing.  Forget funny, forget clever, and forget long-term brand-building.  Which leads us to the next change:

Immediate Results

It's not just major corporations who are trying to show a profit on today's business tomorrow.  It's trickled down to just about every business.  The mindset of almost every business is to do whatever it takes to get people in the door right now.  Never mind that by doing so they may be sacrificing any hope for building a long-term relationship with the market.

And finally, one of my favority topics:

The 30-second commercial unit

I realize that 30 seconds is already more a norm in smaller markets.  And I have no problem with any length of time a radio station wishes to sell.  What I - and many, many advertisers - do have a problem with is ClearChannel's high-handed declaration that they will be pushing 30's, charging as if they were 60's, and putting a premium on the few 60's they still sell.  The excuse given is that they're reducing the amount of commercial time per hour.  Of course, they're raising the number of actual commercials per hour, plus trying to significantly boost their ad revenues. 

But guess what?  That large sucking sound is all the fence-riding radio prospects finally deserting the medium for good.