Recently I heard a story of a station in a large market whose ratings have skyrocketed recently. What sort of genius programming is responsible for this? The kind that lucks out with two PPM panelists in one household who are new to the ratings panel.
Long may they live.
But this can be monetized, to be sure. And in a world where much more than half of a station’s revenue comes from agency dollars earmarked for nothing smarter than the lowest cost-per-thousand, you can hear the “ka-ching” already.
Let’s ignore the fact that those media pies are shrinking – crowded by more ways to connect with more consumers with greater accountability or impact, if not reach.
Let’s ignore the fact that the radio universe those pies are directed to is becoming infinitely larger as “radio” encompasses everything audio that can contain spots (“Welcome to the advertising party, Pandora…Table for one more?”).
Will there come a point where “the best ratings methodology we can afford” is not good enough? Will there come a point where advertisers demand more from their marketing dollars than the ephemeral comfort of two PPM panelists in one household? Is this the rickety frame on which the future of radio’s revenue model depends?
What broadcasters have that are most valuable to their clients are not “numbers,” they’re relationships. Relationships between people on the air (assuming you have some) and people in the audience. These are intimate, familial relationships that matter a lot more than “reach” when it comes to the matter which should be most important to any of your clients: Trust.
At what point will broadcasters sell the value of their relationships with consumers, and at what point will clients decide it’s relationships they want to buy, not simply cheap spots?
And will Facebook get there before you do?
That’s the take from this piece in Ad Age by Ben Elowitz, which argues that Facebook can become the biggest player in the ad world:
The key is in a single idea, and Facebook is singularly able to deliver on it: SELL RELATIONSHIPS, NOT IMPRESSIONS. But never, ever, ever has any brand had an advertising platform that could create a relationship with a consumer before she makes a purchase. Until now. A relationship is worth a hundred or a thousand times an impression – or more – depending on how you monetize it. The ability to sell relationships puts Facebook in a completely different business than every other media company – and their product is orders of magnitude more valuable.
Yes and no.
Relationships are based on trust. And people tend to trust people much more than institutions (even those they rely on to safeguard their privacy – just ask yourself who you trust more – your best friend who doesn’t have your ATM PIN or your bank which does).
The beauty of a well-built radio brand is that it is based on people. This is why Talk Radio outperforms the sales multiples of many other formats – not simply because of its higher spot load (there are infinite ways and places to buy more spots), but because recommendations from trusted personalities are like word-of-mouth from a friend: they leverage the relationship the listener has with a personality, regardless of the reach of that message.
How could Facebook take over the ad world? One way, says Elowitz:
Create an offering that can’t be price-shopped or commoditized…Scarcity of sources with huge reach and a product that cements relationship for life could be a killer combination.
You know what can’t be price-shopped or commoditized? Relationships with personalities you trust. And trusted relationships with huge reach, too.
This is what radio has – or could have.
But only when stations graduate beyond cost-per-point to cost-per-relationship. Only when they nurture those relationships on-air with real people.
And only when the buyer values relationships which solve their client’s problems more than liquidating their client’s media budget.