Pop quiz: What’s radio’s No. 1 competitor? Streaming audio services and satellite radio? TV, cable and print? Facebook and Google? According to Marketron CEO Jim Howard it’s none of the above. Ad agencies, which bring advertisers a complete media mix and targeting to meet specific client goals, are the industry’s chief rival for ad dollars, he said this week.
Once viewed as a partner to radio stations, Howard says agencies have shifted to become “significant competitors” to radio. When they allow agencies to resell their products, stations relinquish control of client relationships, pricing, differentiation and targeting, he contends. No longer a trusted companion that aggregates radio and TV or radio and print, “agencies are now in the driver’s seat,” Howard said during the Marketron-presented webinar "The Future of Radio: Why Now is the Time for Digital Advertising.”
While still cost effective, radio is less measurable and targetable than other available channels. “A much more comprehensive media mix is available from competitors and that’s what makes the agency a new competitor,” Howard said Tuesday.
Stations that haven’t taken the digital plunge are focused on selling radio ads as a single advertising tactic. But agencies mix and match media to build an integrated campaign specifically targeted to the client’s audience. They also provide creative elements and measurement to prove results.
Of course, radio companies that invested in digital are offering a broader mix of media and targeting capabilities. “Anyone who is providing this broader mix of capabilities has now become a wicked competitor,” Howard told the webinar crowd. “The ability of organizations to innovate will determine who wins and who loses in the future.”
To better compete on today’s landscape, radio stations need to sell more than just on-air spots, website banner ads, streaming audio and newsletters. Offering third party digital advertising to clients is part of a modern day media sales offering. This includes targeted display ads, video ads, paid social media, search ads and other products hosted on other digital properties. While many large groups have been doing this for years, it remains out of reach for smaller independent groups, which is where Marketron is coming in with its new NXT product. (After all, what’s a webinar these days without a product pitch?)
Selling digital products – both ones you own and from third parties – allow radio to play in a much larger revenue pool, said Jimshade Chaudhari, Marketron Senior VP of Product. Radio accounts for about $16.2 billion or 6.7% of the total $239 billion pre-COVID ad spend. Digital captures 54% or $129 billion. Adding digital to its sales offerings allows radio to move from targeting just 7% of ad dollars to 61%.
With strong relationships with local advertisers, radio is well equipped to expand further into digital sales. But beyond leveraging existing functions like sales and accounting, stations need to invest in new software to manage digital campaigns, handle reporting and manage creative assets, along with providing training in digital sales skills, campaign design and strategy and digital sales support.
“The landscape has changed a lot in the past few decades and the competition is fierce,” said Chaudhari. “There are lots of people out there selling digital advertising but radio has this unique opportunity to sell integrated radio plus digital advertising to leverage a great awareness and consideration tactic, which is radio, and marry it with very complementary tactics from digital to help with conversion. So you can bring your customers through that buyer funnel with a combination of these tactics.”
Studies show that adding digital to any media type increases the overall return on investment. “Not only will you be offering your customers digital tactics that they want but it will actually make your radio campaigns even more effective,” said Chaudhari.
View a recording of the webinar HERE.