Oddly enough, the future of local radio revenue is outlined in an Ad Age piece about the future of local TV revenue.
Writes Ad Age:
Owners of local-TV outlets have discovered that in this digital age, “they are local media companies, as opposed to TV stations,” said Mark Fratrik, a vice president at consultant BIA/Kelsey.
Ad Age outlines the way CBS, for example, is integrating their TV and radio assets into a one-two local media punch:
At CBS Corp. an effort is afoot to create new media outlets for local advertisers. The company, which operates TV and radio stations in major cities, is combining its assets in city-focused online portals. A Los Angeles site, CBSLosAngeles.com, offers traffic, weather and content from CBS’s L.A. TV and radio outlets. Among marketers using CBS’s new local venues are MasterCard and Allstate. Historically, radio and TV sales staffs worked separately, said Anton Guitano, chief operating officer of CBS Local Media. Now, he said, the company is “looking toward more cross-promotion.”
And why does this dramatic change in our mental model matter?
According to BIA/Kelsey, local spending on traditional media will fall to $108.2 billion in 2014 from $115 billion in 2009. During the same period, spending on all online and interactive media is projected to grow to $36.7 billion in 2014 from $15.2 billion in 2009. The consultant estimates 55% of all U.S spending in 2009 was on local media.
Translation: Not only is all of your local revenue growth likely to come from digital media, but all the revenue you need simply to stay even is going to come from digital, too.
If you’re not reconfiguring the DNA of your broadcast company now, then you are playing a loser’s game.
What does it mean to reconfigure your DNA? It’s no small task, folks.
It does not mean simply plastering a new label on your letterhead and boosting the budget expectations for your digital team. It means restructuring your operation. Firing some people and hiring new people. Changing titles and responsibilities and organizational charts. It means giving your people the tools they need to do an all-new job. And it means competing in all-new ways with (what used to be known as) the newspaper companies and TV companies that were once alternate channels of advertising distribution for your clients and are now head-to-head competitors in a digital space where the best talent and ideas and technology and execution wins.
This transformation is, in other words, far more dramatic than you might imagine. And far more traumatic, too. And just as the caterpillar is barely recognized as the butterfly, so will you be impossible to mistake for a radio station.
This will not be a problem solved by your corporate office on the other side of the country. They can’t make you a local media company.
Only you can do that.