A Harsh Slap in the Face
This past week I heard several stories of frightened radio managers cutting back initiatives in order to focus efforts on the shrinking core business: Selling spots.
That is, the less folks want to buy spots, the harder you fight to sell them. And all those initiatives – including the digital ones – designed to ice the cake are tossed aside as the cake itself shrinks.
What's being lost in this unfortunate action is that the cake itself is changing. It's a different cake from what it once was. And that argument is put forth with alarming effectiveness in this article from MediaPost.
What we do know is that the absence of reliable ROI media metrics will contribute to advertisers’ meager spending. Many of the major advertiser categories, such as automotive and financials, have been permanently decimated. When they resume regular ad spending, there will be fewer advertisers spending far lesser amounts. Other categories, like retail, will remain flat for the next 18 months. Many big and small advertising companies will merge or disappear. Traditional ad spending at prior levels is not coming back, although money will continue to shift to new digital platforms.What we do know is that consumers will continue to become more fragmented in their attention and loyalties. They will take refuge in their social networks, where they can commiserate with friends. Traditional media consumer support (watching scheduled TV, attending movie premieres, buying books in stores) will continue to wane, but their attention and spending in all places digital will prevail.What we do know is there will be no federally funded bail for media, Internet, entertainment and advertising. Big media by definition is not nimble and innovative enough to simply dump what’s not working, modify what can be saved, and grow what works.There isn’t much that big media companies can bank on or reliably forecast moving into 2009. They are hamstrung between deteriorating traditional costs and revenues and evolving digital business models that do not offset the losses, generating less than 10% of their overall incomes. Big media isn’t just being ravaged by recession; it is being sacked by a technological transformation of enormous proportions.
Now is not the time for radio to abandon its efforts at transformation in favor of the so-called "core business." The core business is radically transforming and will have less resemblance to its past than to its emerging future.
This is a time for radical transformation of your model. Not a time for "sticking to the knitting."