Today’s guest post from Paul Jacobs is a continuation of yesterday’s discussion about the limitations of ROI, and the need for a better and more meaningful way to evaluate brand connection. This conversation was spurred by an AdAge think piece by Epsilon CEO Andy Frawley, and you can read that post here.
Frawley writes about the importance of a new measurement called ROE2 which stands for return on experience x engagement and it speaks to a brand’s ability to connect with its audience.
How all this plays out in the sales arena is the central question. And Paul is a veteran of lots of sales meetings, and has seen the good, bad, and the value added. And today, he weighs in on what this means to the revenue generating end of radio stations.
Tomorrow, we’ll take a look at this new interpretation of ROI from Lori Lewis who, of course, comes from the social media side of the street. – FJ
Earlier this month, our local public television station ran a locally-produced documentary called Made In The Motor City. For those of us who grew up in Detroit, we were treated to all of the great brands we experienced in our youth – mostly foods like Coney Island hot dogs (it’s a Detroit thing), Vernor’s Ginger Ale, and Sanders Hot Fudge. You had to live here to know what I’m talking about, but that’s the point.
And then, right in the middle of the program they featured a truly unique, iconic brand from Detroit – WRIF – the station where Fred and I worked (and we continue to consult). They showed many of the things that made WRIF an icon – great talent, innovative television commercials, the “D.R.E.A.D.” card (anti-disco, of course), outstanding events, and more. But beyond the memories, the show demonstrated that a great radio station is so much more than its ratings.
A great radio station has a relationship with audiences and a city that is priceless. You may not be able to see it on a spreadsheet, but you know it when it’s there. And take it from me, it’s fun to sell.
In 2015, there continues to be outstanding radio stations that do many of the same things we did at WRIF, and we are fortunate to consult many of them. But too often, we hear from clients that despite consistently stellar ratings in money demos, bigger than life morning shows, and “live and local” personalities in all or most dayparts, they are experiencing trouble achieving their revenue goals.
Why is this happening? It starts with the fixation on ROI (which is a nice way of saying, “hitting the cost-per-point”) from advertisers, and then the sales staffs ceding their value proposition by attempting to hit that pricing threshold.
Cost-per-point goals are the killer for great radio stations because they commoditize radio into a single metric. So an iconic station is on the same footing as a music machine with voice-tracking coming from San Antonio. And when that music machine station bonuses a second station just to get on the buy, the quality of what a great station can deliver gets crushed by the metrics.
This fixation on ROI also mutes radio’s advantage over pure-plays like Pandora or Google search. When was the last time someone told you about a great search experience? But I bet they repeated a bit they heard on a morning show, a profound quote they heard in an interview, or shared a song they first heard on a great music station.
While pure-plays may have an edge (and this may only be temporary) with specific demographic targeting and geo-location, radio’s advantage trumps them significantly. Pandora, SirisuXM, Stitcher, and others provide virtually no memorable user experience outside of a music stream or a bland channel. There’s no human connection. No passion. No laughs. No information that makes you sit up and take note. All things that great radio stations provide that increase its ROE2.
Stations that are on their games engender emotional relationships. Great local concert coverage, emergency news, a morning show encounter, a charity drive, a comedy club event, a Christmas wish, a backstage artist opportunity – all are the types of experiences that high-performing stations can provide that are simply not possible for digital competitors to pull off. And these are the attributes that are simply unaccounted for in ROI metrics.
Sadly, we’ve seen a decline in the number of great live-and-local personalities on the radio at a time when this “secret sauce” is what separates a living, breathing brand from an algorithm. Radio has allowed itself to get into an ROI battle, thus diminishing the very elements that sets the medium from the pack and makes it more valuable to advertisers.
I thought of some of those great radio stations when I first read Andy Frawley’s ROE2 article because iconic personalities and brands deliver exactly what advertisers want and need – the ability to create an attachment with a consumer. This is only possible through high-level engagement and the experience that only a radio station compelling enough to motivate listeners to tune in every day to hear what’s coming up next can provide.
The money line in this article is a sales pitch for great radio stations that must rise above pricing and rating comparisons if they want to thrive:
Experiences shape how consumers feel about brands,
including factors such as service, quality of products and amenities.
Voice-tracked music machines can’t deliver that kind of experience – or value – regardless of what they cost or their supposed ROI.
Great radio stations can provide talent that listeners want to see and hang out with at events. They engage with listeners on social media as humans and have conversations. Great radio stations set the agenda for what people in your market are talking about, have newsmakers and celebrities on the air, and entertain as well as inform.
And many advertisers have acknowledged the value of great personalities by paying more for live reads – the value of their endorsement is worth a lot. In an ROE2 world, that old ABC cliché – Always Be Closing – should become “Always Be Connecting” because that’s what reps do best when they have a great tool kit.
So it’s time for salespeople at big radio stations (even in small markets) to start acting that way. Instead of negotiating on price, focus on what separates your station from the pack, and highlight the experience and impact your station has that the music machines cannot.
Bring your big talent to pitches. Use videos of your events and talent to showcase what makes you unique. And create an internal culture that is not going to allow your station to be compared on ratings or commoditized by ROI – whether yours are good, mediocre, or low – and focus instead on what’s most important – the impact on and the relationship that you have created with your audience that does what advertisers prize most – results.
The bottom line is that any radio station can hit a cost-per-point, no matter how mediocre they are. But great radio stations can provide something money can’t buy – that outstanding connection with an audience because of the consistently excellent experience that happens day in, day out.
It’s where you make the case that experience and engagement matter and will better serve your clients and your advertisers. Fully formed stations have all the weapons. It just a matter of putting it all together to help the client reach her goals.
It’s called sales.