Jerry Lee

As the force behind Philadelphia’s top-rated station, Jerry Lee has long bucked the trends as an independent owner thriving in a market of multi-station clusters. It works: Jerry Lee Broadcasting’s AC “More FM at 101.1” WBEB finished first among all listeners 6+ in Nielsen’s September survey with a cume 45% higher than the No 2 station.

Lee, who is a member of the NAB Committee on Local Radio Audience Measurement (COLRAM), the Nielsen Audio Advisory Council and the Audio Committee of the Council for Research Excellence, is one of the industry’s strongest research proponents, not just for music and programming but commercials as well. Lately he’s teamed with research firm Sensory Logic to use facial coding to improve radio ad creative. (Facial coding exposes participants to ads while computers measure their emotional reaction based on facial movements.) Inside Radio caught up with Lee to talk about that venture, the benefits of being independent, and the continued advantages the industry offers. An edited transcript follows.

You’re on a mission to make radio commercials more engaging. Why is this so important?

It doesn’t do any good to tidy up on targeting and everything else if the commercial is no good. According to an Advertising Research Foundation Study of 5,000 campaigns, 75% of the effectiveness of a campaign is due to how good the creative is. This is a no-brainer—it’s all about the commercial.

What have you learned from working with Sensory Logic about what makes a commercial engaging?

There are 18 principals behind what makes a good commercial but you don’t need to apply all 18 to each spot. They’re more intended to stimulate the thinking of the copywriter. One at the top is the three-second rule—that’s how long you have to pull in the listener. Another one is keep it close to home by playing off what’s familiar. Always have personality. Mirror the values of the listener. Provide a sense of membership. And it goes on. Sensory Logic facial coded a number of radio commercials, and then dissected them and came up with the 18 most important rules for radio advertising. Facial coding is 90% accurate. There’s nothing out there that is anywhere close to that for advertising.

What are some of the dos and don’ts for creating radio commercials that deliver results for advertisers?

One really big one is never start with price. Even Walmart can’t start with price because it isn’t a core emotion and someone can always come in with a lower price. Price is important after you’ve established value for the product. You want to talk about what the product does for the listener. You don’t talk about the grass seed; you talk about how green your lawn is going to be. You have to put everything in the listener’s perspective: What do they value? What does it do for them and how is it going to change their life? Another one is always use two or more voices in a commercial. True, 25% of the time you can have a great commercial using a single voice but it takes a very sophisticated copywriter to do that. If you just do those two things alone it will increase the odds of the commercial being successful.

You’re offering free effectiveness testing of radio commercials to every Philadelphia-area advertiser that spends $12,000 or more a year on radio ads. How has the response been?

It’s been fabulous. We originally had one salesperson doing it as an experiment starting at the end of April and they were able to get 20 clients on board. Only within the last two weeks have we had all the salespeople offering it. We have a lot of excitement but it’s too early for success stories, other than the initial 20 that we did. In a market like Philadelphia there are 800 advertisers that spend $12,000 or more on radio adversting each year. The amount of potential is unbelievably great. Initially we don’t expect people to increase their adversting much in the first go-round. But after they’ve been on the air for four to six months and they start to get more sales because of it then they’ll start to increase their radio budgets.

WBEB is well known in the industry for its investments in researching everything from the commercials to the music to what happen between the records. How has this investment paid off?

It’s the reason why we’re the dominant station in the market. We have 40% of the market listening to the station every week. We have 1.6 million people out of a [total market cume] of 4.5 million. We have 500,000 more listeners each week than the No. 2 station in the market. That’s huge. We have that because we’ve always been out there on the cutting edge, trying to push the envelope, trying to make the product better for the listeners. We believe in spending money, in doing whatever it takes to fend off a competitor. We just got a competitor last February in our format [CBS Radio’s “Today’s 96.5” WTDY-FM] and here it is eight months later and their audience is smaller than when they started as a competitor.

WBEB is also known for spending on marketing. How has your approach to marketing changed?

Marketing was extremely important and very successful before the PPM came out. Typically half the diary keepers would fill out their diary only once a week and the station that was doing marketing on television got an unfair advantage. They were top of mind and the ratings for stations that marketed were over-reported. When the PPM came in, we did a marketing experiment and found it was almost impossible to move the needle. We spent $800,000 in one month and nothing happened, so we came to the conclusion that it’s extremely difficult to market in the PPM environment. We’re fortunate that with Christmas music, WBEB’s audience goes from 1.7 million to 3 million. That’s two-thirds of the listeners in Philadelphia listening to us during the Christmas season. So as a result, we have such top-of-mind awareness with people in the marketplace that it’s embedded in their brains. We got in and established ourselves when you could still do that. Now it’s extremely difficult to establish yourself in radio with marketing.

WBEB is an outlier, a single standalone competing against a market full of multi-station clusters. What are the advantages and the challenges that come with that?

The only challenge is they can get a lower price from suppliers like Nielsen because you have a discount based on how big you are. We lose out on some of those things but where we gain is by making instant decisions. When we get a competitor, which happens about every three years, we have a game plan within 3-4 hours. We just drop everything and say how do we block this offense? And every single time, we win. If we consider it to be a formidable competitor we do whatever it takes to block them. One of the greatest secrets with a new competitor is you copy whatever they’re doing. You take their slogans and you claim the same thing. So you get to the point where they have no differentiation.

What are radio’s greatest challenges and opportunities?

The best for radio is yet to some. We’re the only medium that’s holding on to its audience. We have 93% of the population listening to us every week. Granted they’re listening a little less but we have 93%. TV has 89%. Advertisers like Procter & Gamble have said they recognize they need reach and that’s why they’re exploring and doing various experiments on how to use radio right. They know they need to get to everyone out there and the only medium that can do that is radio.

The challenge is twofold: There is a perception that no one is listening to radio. When Advertiser Perceptions surveyed advertisers they found that advertisers thought only 64% of Americans are reached by AM/FM. But Nielsen shows radio’s actual weekly reach to be 93%. The other issue is commercials. Only 8% of local commercials and 20% of national commercials are engaging. And engaging commercials are eight times as effective as non-engaging commercials. Gallup & Robinson did a study in 2007 that showed radio and TV commercials are about the same in terms of effectiveness, depending on how good the commercial is. Well, you can buy radio for less than one-third of what you can buy TV for. We have an incredible story to tell.

We also need to address an issue that nobody has a good handle on, including myself, and that is how much is the commercial load in radio hurting us? Most people say it hurts us a lot. I’m not so sure. I’m not so sure that if you lowered your commercial load that it would have a significant impact on the ratings. But I am worried about six-year-olds, 10 years from now. Will they have a six-second mentality? Nielsen starts their PPM measurement at age six. We need to monitor their habits closely. The 25-plus-year-olds are not going to change their behavior but the six-year-olds...maybe.

My other major concern is the car radio. Ford showed the Apple CarPlay at [this year’s] Radio Show and I walked away deeply depressed. Over the next six-to-nine months, the radio industry must come up with a solution on how to keep radio prominent on the dashboard. The radio industry needs to go to Detroit with one solution that radio agrees on and Detroit will buy it. If we don’t, the future for radio is very bleak—and that statement is coming from a wide-eyed optimist.