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5 Things Digital Media Can Learn From Radio

2009 September 29
by Greg Satell

Radio is the ugly stepchild of the media world.  Once the herald of a new electronic age, it now fights for market share with the also lowly billboards.  Planners relegate Radio to “support media for TV” status.

If Rodney Dangerfield sold media, it would certainly be Radio.  However, many of the smartest business people today are in Radio and the medium regularly outperforms its peers in profitability.  There is much Digital Media can learn.

Below are just 5 examples:

1. Niche Audiences: Before TV, Radio was the national mass medium.  At some point, survival required Radio to segment radically and even top stations became niche.  They adapted by first narrowing their target and then by consolidating into station groups with multi-station, multi-target strategies.

At the heart of Radio’s success today is their understanding of niche audiences.  In the US, there are over 50 “official” music formats measured by Arbitron and probably dozens of other “unofficial” ones.  New formats are being created all the time as music tastes and demographics change.

While everybody wants to be the next Google, Facebook or Yahoo, many new digital ventures make the mistake of going too broad.  It is much easier to build a large audience if people are passionate about your product, and that usually requires focusing your efforts.

2. Content Research: Radio stations are constantly researching their product.  Stations do “dial group” research as often as once a month to continually track the changing preferences of their target audience.  Smart Digital players are catching on, but usability testing is still grossly underutilized.

While Internet has the advantage of instant audience feedback, clearly more consumer understanding is needed.  It is not enough to know merely what consumers like and what they don’t.  It is also important to know why and how they use the medium.  Usability testing should be constantly ongoing and focus groups should be done annually, at a minimum.

3. Consistency: While developers like to be innovative, audiences like familiarity.  In the1960’s Westinghouse pioneered the “news wheel” format, which repeated the news every 20 minutes.  A perpetual “whir” noise sounding like printing presses goes on in the background.  They kept constant what would be announced and when (i.e. Sports on the twos, Traffic on the fours).  It was, and is, one of the most successful formats ever.

Music and talk stations have similar, if less strict formats.  On music stations, informational services like news, traffic and weather are read at approximately the same times each hour.  Talk radio personalities repeat topics on a cycle.  The durations of the cycles are adapted to both listener habits and research methodology for maximum effect.  “New Media” people, who think they are inventing all the tricks, clearly have never taken a serious look at the Radio business.

Jacob Nielson, the usability guru, argues strongly for the type of familiarity in Digital that Radio has provided for decades.  Re-designs should be approached with caution, no matter how bored people are internally with the old look and feel.  Moreover, commonly used links should be placed in commonly used places.  There is no point in confusing users just so that your site can be “unique.”

4. Day-Parting: Music stations change the content at night to cater to younger audiences.  There is different content for drive times, in-office listening and lunchtime.  Conversely, web sites treat audiences the same morning, noon and night.

Optimizing content for time of day can take advantage of changing demographics and web surfing habits.  Also, adjusting the contrast slightly to suit natural and artificial light can also improve user experience.

5. Promotions: More than anything else, Radio stations excel at getting clients to pay them to promote themselves.  They create contests and events that not only build audience loyalty, they earn revenue.

Radio stations set up concerts, contests and other events and convince advertisers to sponsor them.  Clients have their brand, and often their product incorporated into the promotion. They often attend the event as well, which give radio salespeople an opportunity to get extra face time without ad agencies getting in the middle.  Instead of whining about how TV gets better CPM’s, Radio goes out and builds value for advertisers.

A primary example of how this approach can be adapted to the internet is the French Radio Skyrock’s success with social media.

It is ironic that the oldest and much maligned electronic medium might be the most highly instructive for New Media.  However, Radio has continually reinvented itself to adapt to its changing media context and has a lot to teach us all.

– Greg

18 Responses leave one →
  1. Disagree permalink
    October 2, 2009

    Do you have any idea of what you are talking about? This is one of the most inane articles on radio I’ve read.

    [Reply]

    Greg Reply:

    Sorryyou feel that you feel that way. The article was mostly based on my experience representing over 200 Radio stations in the US and running multiple online media properties.

    Maybe, you could point out specifically what you thought was “inane.”

    – Greg

    [Reply]

  2. October 2, 2009

    Hi Greg,

    I do agree that many conventional Broadcast Radio strategies have high value in the coming development of New Media.

    I don’t, unfortunately, subscribe to the conventional wisdom regarding the profitability, as the endgame, for Broadcast Radio.

    Broadcast Radio, specifically Music driven stations, have bleached and homogenized the product……..the user experience, so badly as to have alienated their markets, niche or otherwise, beyond repair.

    30 minutes of Music, featuring the same 30 – 40 songs, played in repetitive rotation………….with 24 minutes of ads…….4 minutes of DJ patter, and a couple of PSA’s, basically sums up the average hour on Broadcast Radio’s popular, Music driven formats. The relationships between Major Labels and Broadcast Radio have poisoned the Goose, and the Eggs are Toxic.

    The ears are going elsewhere, and rightfully so. There are many other ways to get great Music free, or at a nominal cost, nearly all of them better than Broadcast Radio. Advertisers are leaving the Medium in buses.

    I’d suggest Your time, with the obvious wealth of experience You have, should be spent coming up with a better, competitive business model, to salvage what is left of a once – great industry. I’d be very interested in helping with that. You’d just have to pay Me, and I’d be happy to help with the development of New Radio 2.0………….where an AOR format would be hosted by intelligent DJ’s, who actually research their Music selections, and advertising is relegated to it’s proper place……………..7 minutes per hour, max……..sold at at premium rate, to very specific, sophisticated demo’s.

    Radio that leaves You feeling smarter…………..

    Peace, Randy

    [Reply]

    Greg Reply:

    Randy,

    Thanks for your comment. However, it begs the question: Given the obstacles that Radio has to face, how have they retained attractive margins for all these years?

    – Greg

    [Reply]

  3. October 13, 2009

    Interesting. This topic seems to have stirred up quite a reaction. I read your piece and the responses a few times. It seems that personal preferences can creep into the discussion fairly easily. Randy G makes a compelling case the Radio has become too homogenized and that listeners are fleeing to other, more compelling formats. Maybe I’ve missed something, but this seems to make your case about niche audiences. While I may not want to listen to 30-40 songs over and over, there are probably a good many listeners who do. To the extent that these listeners form a large enough group, advertisers will pay attention.

    My take away is that there are, and will continue to be, an ever increasing number of choices in entertainment. This will create more and more specifically defined niches. The trick is to match those advertisers with the specific niches most interested in reaching a particular demographic.

    JR

    [Reply]

    Greg Reply:

    John,

    I think you’re right, although niche is a moving target. The reason that Radio stations tend to repeat the same songs is that they are ever more narrowly targeted and the songs they play test well in that target.

    – Greg

    [Reply]

  4. October 16, 2009

    Hey Greg, First of all THANK YOU for giving radio credit for something. There is a bunch of media hype these days about radio being “dead”. It’s not dead it just needs to “get its cool back”. I think there are some stations that do still get it. Unfortunately, there are many more that don’t.

    Margins are still pretty amazing in radio (not counting this recent economical downturn). I think radio fought the digital space for about 5 years longer than it should have (same with the music industry). But YOU’RE RIGHT, at its core, Radio does do several things right. And the new media guys can learn something if they step back and quit believing their own hype for a moment :).

    Now, if it can only get back to what made it great (what you’ve listed above) all while incorporating and using the new media to its benefit it, Radio will retain its relevancy.

    I just hope that it get’s its cool back before things like internet radio in your car make radio obsolete.

    Thanks again for the positive post. I’d love to hear any more of your thoughts on the subject as I am currently putting together a group to buy stations to combine what makes radio and digital media great to create a product for the next generation.

    [Reply]

    Greg Reply:

    Ben

    Thanks. I’m glad you liked it.

    One place I think that Radio has dropped the ball is in Social Media. It’s really an area that plays to Radio’s strengths.

    Another interesting area is what Network Theory pioneer Duncan Watts calls “Big Seed Marketing.” The idea is to combine mass media advertising with Social Media to extend conventional campaigns. It’s another area that would play to Radio’s ability to integrate promotions.

    There are a lot of smart people in Radio so I’m sure it will have a bright future in the digital world.

    – Greg

    [Reply]

  5. October 18, 2009

    Great article Greg. New media producers can and should learn from radio (especially public radio) and other traditional media like magazines. Beyond formats and marketing strategies, decades of work taught producers in these media a great deal about the craft, editing and presentation of stories. This knowledge should not be discarded in our haste to transform the media landscape.

    I want the revolution. I know it’s here. Let’s just make sure it ushers in a golden age and not a dark one.

    [Reply]

    Greg Reply:

    Sean,

    You make a great point. New technology should improve on the old, not erase lessons learned.

    Thanks,

    Greg

    [Reply]

  6. Kerry Inserra permalink
    October 20, 2009

    Hi Greg,

    As a former radio salesperson (Newstalk and All News formats) I must say I love the medium. But I’m also sadden by how entrenched in mediocrity the product has become. I miss the highly respected “old time” radio personalities like Paul Harvey and Charles Osgood. Regardless of your politics, they offered depth and insight-sorely lacking from commercial radio broadcasts today. Additionally, the music formats offer very little in the way of variety. You need to go to satellite to hear music beyond the “top 20”. Unfortunately, I cannot agree with Ben ‘s comments about radio margins still remaining strong. Big media has overpaid for radio properties and Clear Channel, CBS, Cumulus and Citadel are hurting. Radio revenues are way down in most markets clearly underperforming for their stock holders. This further perpetuates lack of creativity, massive cost cutting, layoffs and big time overhead. Radio is immersed in an outdated business model. It’s been slow to embrace new media and and continues to regurgitate massive amounts of intrusive, annoying, inane commercials. 8 years ago when I was still selling radio, we ran 18 commercial units per hour on our local Newstalk station (which was ranked #1 in the market) This causes listeners to flee to alternative options-satellite (more choices, less commercials) and in-car ipod hook ups. Radio’s real relevancy and lifeline today are sports radio (very sticky), quick traffic and weather updates and public radio. While the barriers to radio remain low to advertisers, the ROI is not nearly as transparent as new media. Honestly, I’d rather pay a subscription fee for Satellite and have more choices, more niche options and less commercial intrusion.

    [Reply]

    Greg Reply:

    Kerry,

    Thanks for your comment. It’s clear that you are passionate about Radio!

    Unfortunately, I disagree with your point of view. While many complain, with good reason, that Radio has become over researched and over programmed, stations do it because it results in bigger audiences. Furthermore while it is clear that – as you pointed out – buyers of radio stations overpaid , Radio still earns attractive operating margins relative to other media.

    – Greg

    [Reply]

  7. November 28, 2009

    I agree. We can learn much from commercial radio by watching how an entire industry is working together to drive itself into obsolescence.

    Radio used to innovate.

    Radio used to try new things.

    Radio content used to be driven by its “users” (listeners).

    Instead, radio continues to use antiquated methods to measure itself (Arbitron and dial-out music testing). They allow major labels to push a preferred music rotation. In general, programming is homogenized to fit as broad an audience as possible. To top it off, revenue is still achieved by making comparisons to the radio station across the street.

    Radio has failed to evolve over the years. The only evolution I’ve noticed is a reduced programming staff, an increase in workload for those remaining, and a “jam-it-down-their-throat” attempt to establish value for pushed advertising that is rarely relevant to its listeners.

    50 formats? 50? Is a medium doing itself a favor by tracking 50 formats that should be suitable for the entire U.S. population?

    The communication evolution we are in today about wisdom of the crowds, one-to-one communication, sharing, and openness.

    No. I’m sorry. The only lessons radio is teaching today are lessons of failure. These are important lessons. Radio should take time to learn from their recent failures: HD, consolidation, and automation. Taking these lessons and blending some real effort to innovate, act curious, act humble, and “try” might help keep the industry from complete demise.

    [Reply]

    Greg Reply:

    Cam,

    Nevertheless, Radio broadcasters continue to earn some of the most attractive margins in media…

    – Greg

    [Reply]

  8. November 29, 2009

    Margins are a beautiful thing. EVERYONE wants great margins. I think it is those margins that are giving the industry a false sense of security. That security is telling the leadership to do more of the same with fewer resources (to maintain the margin as revenues move elsewhere) rather than making small investments in real efforts to evolve the business for a generation that is becoming completely averse to pushed media.

    [Reply]

    Greg Reply:

    Cam,

    I do see your point. As radio has become more corporate it seems to many that it has lost its soul. However, it has maintained ad revenue share and profitability. That’s what a good business is supposed to do.

    I do agree that there is a lot of work to do in the face of a quickly evolving media environment. However, it seems to me that Radio is doing a better job than magazines or TV.

    – Greg

    [Reply]

  9. November 30, 2009

    Greg,
    To your original posting, I agree. How many times have we heard the prophecies of radio’s demise? TV would kill radio; cable would kill radio; satellite would kill radio; the internet would kill radio. And yet, it is still around. Why? Because it has been able to continually evolve and reinvent itself. It had to if it was to survive.
    In doing so, it has continued to remain an integral part of most American’s daily lives. According to the recent Nielsen Study released this month, here are just a few highlights.
    4 in 5 American’s listen to broadcast radio daily, with users spending nearly two hours per day.
    Radio is the #2 reach medium ahead of the web, newspapers and magazines.
    18-34 year olds have not abandoned radio either with 80% listening to terrestrial radio daily.
    Lastly, radio is used more with the educated and higher income population segment…84%. TV is much stronger with less educated and lower income.
    Yes, radio is still evolving and has a lot of work yet to do,…. but then what medium doesn’t?
    Passive, digital measurement is taking hold and changing how radio is measured and purchased. (PPM has shown how much larger radio’s cume is and that it’s TSL is much lower than thought to be.)
    Radio has done a great job attracting larger fan bases through their websites and monetizing that audience. It’s been a struggle getting advertisers to pay for something they started getting out getting for free.
    And to my experience, this seems to me to be the first time broadcasters are working together to ‘advertise’ the same message. Radio is alive and well and it delivers.

    [Reply]

    Greg Reply:

    Deborah,

    Great points. Another advantage that Radio has is the passion of radio people (of which you are a great example!)

    Thanks,

    Greg

    [Reply]

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