Wednesday, April 29, 2009

The Real Reason Advertisers Are Abandoning Newspaper?

Business columnist and author Geoffrey James returned from a recent Society of American Business Editors and Writers (SABEW) confab with a stinging indictment of the newspaper advertising industry.

According to James, the reason newspapers across the country are folding faster than a bad poker hand is not the national economy, but "...that advertisers have finally figured out that newspapers, in collusion with clueless marketers and unscrupulous ad execs, have been fleecing them for decades."

The writer asked a room full of newspaper writers how many of them actually read the ads that appear in their papers.

Fewer than five percent said they did.

This made me wonder, what if a similar question were asked of radio broadcasters? How much higher would our percentage be? (You do listen to the ads on your station, don't you?)

After all, radio advertising is intrusive. When the radio is turned on, the listener can't help but hear the ads. (As someone once said, God's gift to Radio is that He created human beings without earlids.)

Whereas newspaper advertising tends to be passive: ...if the reader happens to open that day's paper to the right section...and if she happens to turn to the right page...and if she happens to notice your ad...she might actually read it.

Or she might not.

James' real problem with newspaper advertising is its lack of measurability and/or accountability. Is it effective? Do you know for sure? How do you know?
The problem with newspaper advertising is that, in most cases, you have NO idea whether anyone is reading an ad, or whether that ad is driving buying behavior. And because nothing is being measured, newspapers and ad agencies have been able to artificially inflate the price of their space ads. Massively.

One way newspapers do this is to simply lie about circulation. For example, it’s not uncommon for a newspaper to claim that each distributed copy is read by 3 or 4 people. But that’s total BS. Many copies of most print publications don’t get cracked even once. And the ones that do, I’ll bet that only a fraction of the content ever actually wins the reader’s eye.

As for the ads themselves, only a tiny fraction of the circulation reads them, and the number of people who take action as result is probably in the single digits. (I’m talking the actual number here, not the percentage.)

Newspapers also cook the books is by setting the value of advertising based upon what other newspapers are asking. As if that made any difference. But it worked, in the past at least, because marketers (many of whom don’t want to be measured anyway) never asked the obvious question: how much revenue will this ad generate?

James is bullish on online advertising because click-throughs can be tracked and ad performance measured with greater accuracy. In this, he echoes Ken Dardis of Audiographics - a former terrestrial radio guy, now SVP of Spacial Audio Solutions, an authority on Internet radio, and an outspoken critic of "business-as-usual" where Radio is concerned. For Dardis, the Internet holds the key to Radio's future, which makes him either a gadfly or an augur - or both, depending on whose ox is being gored at the moment.

Ken Dardis is passionate about Radio, but critical of the status quo. His company recently gave away hundreds of thousands of dollars worth of software and hosting to displaced terrestrial broadcasters willing to start their own Internet radio stations.

In other words, he's walking his talk.

The take-away from all of this, for those of us who make our living as radio advertising professionals, is our responsibility to exert every effort to create advertising that is as effective (and measurable) as we can make it.

We do this by investing as much time and energy as needed to understand our advertisers' objectives, their customers' needs/desires/motivation/buying behavior, and the realities of the marketplace that may affect how they interact. Only then can we begin to write and produce the advertising messages that have what it takes to move people and products.

I remain optimistic about Radio's future. Terrestrial stations and online stations both have a place in the new media landscape. They may differ in their delivery, degrees of accountability, and demographics, but they will still provide valuable information, entertainment, and advertising to their audiences.

Read Geoffrey James' full article here.

This from NPR: "Radio Ads Are a Good Thing!"

It is SO enjoyable to hear Real Radio Ads (A Bud Light "Real Men of Genius" spot, no less!) airing on..."ad-free" National Public Radio.
All Things Considered, April 28, 2009 · Radio offers advertisers the last captive audience.

Radio ads are cheap to produce and buying airtime is inexpensive, too. You can blanket the airwaves with a slogan or jingle in a way you can't with TV.

Warren Berger's forthcoming book is Glimmer: How Design Can Transform Your Life and Maybe Even the World.

Listen to Warren Berger's >enthusiastic evaluation of radio advertising (2 minutes, 50 seconds).

All of us in the radio advertising business ought to appreciate (and emulate) Mr. Berger's enthusiasm!

Thanks to Eric Rhoades for the tip!

Thursday, April 23, 2009

Sinking the Boat or Missing the Boat?

Much has been written - and is being written (by marketers and economists alike) - on the subject of marketing during a recession.

Today's Small Market Radio Newsletter carried a fascinating New Yorker piece by James Surowiecki on the subject.

Surowieki contrasts the Depression-era responses of two ready-to-eat cereal makers, Post and Kellogg:

Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising (emphasis mine), and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.) By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty per cent and it had become what it remains today: the industry’s dominant player.

Chrysler took the same approach during the Great Depression and in 1933 passed Ford to become the #2 automaker in America, thanks to its aggressive marketing of the Plymouth brand. This gain was not as long-lived as some, but it demonstrates what can be done when a company goes after market share while others are trying merely to preserve what they have.

I was visiting with a new client earlier in the week. He's in the retail furniture business, a category not exactly thriving these days, given the overall economic climate and contraction in the housing market. But he's not hunkering down. He's planning for expansion and growth. He said to me, "We're in a kind of Ice Age now. And you know what an Ice Age is good for? It kills off the dinosaurs!"


Commenting on why many companies are so quick to cut their advertising during an economic slowdown, Surowiecki cites economist Frank Knight's distinction between risk and uncertainty.

Risk describes a situation where you have a sense of the range and likelihood of possible outcomes. Uncertainty describes a situation where it’s not even clear what might happen, let alone how likely the possible outcomes are. Uncertainty is always a part of business, but in a recession it dominates everything...

For businesses that choose to place their bets on minimizing risks and preserving assets in the short-term, cutting back makes sense.

For others, deep pockets or not, the opportunity to chase a bigger slice of the smaller pie, believing that they'll keep the larger share of their market when the economy rebounds (as inevitably it must), is a worthy challenge and a calculated risk.

Surowiecki concludes:

It’s true that the uncertainty of recessions creates an opportunity for serious profits, and the historical record is full of companies that made successful gambles in hard times: Kraft introduced Miracle Whip in 1933 and saw it become America’s best-selling dressing in six months; Texas Instruments brought out the transistor radio in the 1954 recession; Apple launched the iPod in 2001. Then again, the record is also full of forgotten companies that gambled and failed. The academics Peter Dickson and Joseph Giglierano have argued that companies have to worry about two kinds of failure: “sinking the boat” (wrecking the company by making a bad bet) or “missing the boat” (letting a great opportunity pass). Today, most companies are far more worried about sinking the boat than about missing it. That’s why the opportunity to do what Kellogg did exists. That’s also why it’s so nerve-racking to try it.

I am privileged to work with a number of clients who have the ambition, foresight, and fortitude to pursue relentlessly their goal to be the best they can at what they do.

Counterintuitive though it may seem, this is a great time for smart advertising on Radio!

Read the full article here.

Friday, April 17, 2009

Women in Sales, Selling to Women

This week's Small Market Radio Newsletter had a short piece by copywriting teacher David Garfinkel entitled, "Women, Business, and Advertising." In it he writes:

One problem is that the sales culture and sales training fields are dominated by men...and we often use war metaphors and battle strategies as the basis for success.

Women, generally speaking, don't think in these terms. (Those who do can be very scary.) The female approach tends to be more collaborative and nurturing.

Reading the piece reminded me of a funny and insightful video presentation by Wisconsin pastor and marriage counselor Mark Gungor on the differences between men's brains and women's brains. If you've not seen it before, enjoy it here.

Tuesday, April 07, 2009

Following the Wall Street Journal's Example

As I type these words, three dozen major newspapers have filed for bankruptcy protection.

Barely four months into 2009 and already several venerable newspapers have gone out of business or moved exclusively to a web-based format.

To drive home Old Smudgy's predicament, a recent Pew Research piece revealed that less than half (43%) of all Americans believe that the loss of their daily paper would have significant repercussions on their communities. Fewer than one-third would personally miss their newspaper greatly if it ceased publication.

Most Americans would simply shrug off the demise of their local newspaper.

But even as much of the newspaper industry is faced with precipitous declines in circulation and advertising revenue, one newspaper has actually been experiencing growth.

If you guessed The Wall St. Journal, advance to Go and collect $200.

According to WSJ Managing Editor Robert Thomson, quoted in parent News Corporation's The Australian , "One of the reasons our core circulations are rising so strongly is because papers around America are diminishing. And whether it's in San Francisco or Los Angeles or Detroit, it creates a tremendous opportunity for us to gain readers who are increasingly internationally aware and also aware of their need to be well informed about the world."

It's worth noting the WSJ's aggressive marketing mindset. They're mindful of the supreme importance of content and are leveraging their leadership and expertise in this area across their various platforms, creating a powerful global brand.

As with other marketers that recognize and seize the opportunities that inhere during a recessionary period, to gain market share at the expense of weaker competitors, the WSJ is exploiting their advantage and moving full speed ahead.

If they can do it, so can you! Assess your competitive strengths, focus your marketing accordingly, muster your troops and take that next hill!

What's stopping you?

Friday, April 03, 2009

Substance vs. Style

Here's an example of a radio commercial that from a distance sounds terrific. Positive, uplifting, even inspiring.

Until you listen to the actual words.

It might make you chuckle, but not without wincing a bit.

Disclaimer: this spot was part of a RAB Sales Meeting of the Month cassette from long ago. Can't remember who the original advertiser was. The last ten seconds of this commercial contained that real bank advertiser's pitch - if you want to do business with an institution that cares, switch to us.

Clever joke back then.

Perhaps not so much today.

Consumer Confidence Linked to Advertising

"Financial Company Ads: Out of Sight ...Out of Business?"

That's the headline on a post at the Nielsen blog.

The article goes on to say, When asked about their own banks, insurance companies and investment firms, 55% of respondents who said they had seen more advertising for their financial institution reported having “complete confidence” in the financial health and soundness of their financial company and only 18% said they had “little or no confidence” in their company.

Companies that maintain or even increase their ad spend during times of economic slowdown often gain market share at the expense of competitors that cut back. When the economy rebounds (as inevitably it will), the aggressive marketer reaps the benefits of that additional market share. Some in the advertising community call this the (Procter and) Gamble strategy; it's sound thinking.

Now there's additional evidence to support the claim that positive PR and advertising go a long way toward preserving familiarity and boosting consumer confidence in an otherwise chaotic environment.

No medium is better suited to fostering this kind of familiarity and confidence than radio.

A competent and caring radio advertising professional can be worth his/her weight in gold to any client who's serious about weathering the present storm and navigating toward a prosperous future.