Radio’s Challenge for 2009
The problem: auto, financial, retail and real-estate businesses that generate more than half of local media advertising revenues will not recover anytime soon. Some are never coming back. The number of retail store closures in 2009 could exceed last year's 148,000 closures, due mostly to major chains filing for–or trying to avoid– bankruptcy. Small local businesses are especially under pressure. As many as 3,800 local auto dealerships risk collapse from dwindling sales and credit. The consolidation of investment banks will continue across regional banks. Real estate values and sales will continue to fall. Federal recapitalization, which could boost the deficit to $4 trillion, will occur at the top of the food chain. The solution: TV, radio stations and newspapers must work more closely with communities and merchants to strengthen local economies. Their survival depends upon on their effective use of digital interactivity. Job one is to connect local consumers with goods and services of choice using location-based marketing on cell phones and Web sites. With thrift the new norm, marketers ranging from Procter & Gamble to Liz Claiborne have learned to monetize the coupon comeback.
What we are going to witness in 2009 is the diminished importance of how large your audience is and the increasing importance of how effectively you connect that audience, whatever its size, with the advertisers and marketers who have the goods and services that audience craves.
Ironically, just as PPM is coming into widespread use the importance of this (or any) type of head-counting is diminishing. "Digital interactivity" doesn't mean banner ads or streaming ad inserts. It means using digital tools to give the people with the power – your audience – what they want the way they want it.
Surely, there will always be a need to reach lots of people via the type of shorthand mass media specialize in. But this deep recession is moving other priorities to the head of the table.
Every radio station has a precious asset in its faithful and regular audience. The fact that most stations don't know the names or emails or desires of this audience on an individual, personal basis remains one of the biggest obstacles – or opportunities – facing our industry.