That’s what the sales manager of a local radio station told me when she called…. Now let me get this straight….As a retail business I can now purchase either a 30 or 60 second radio spot on your station for one dollar? I was shocked and saddened, this wasn’t the radio I sold for 25 years, and the station making the offer wasn’t a local mom and pop. This was a property of one of the largest radio groups in the country. What is this saying to retailers and businesses alike about what they have been paying for all these years? Has this station become that desperate? When I started in radio at a 1000 watt AM in the 70’s, I sold 10 second weather updates for $1.25 each and now almost 40 years later… $1.00 radio commercials? We as a country have been in tough time before but $1.00! Don’t defend or justify this move by saying “maybe the station ratings were low.” We all know stations that are doing well without a rating story to tell. Or maybe they decided to become “the good guy station” giving away airtime for $1.00 to all the struggling businesses during these slow times. It would be interesting to see if anyone reaches out to help “the good guy station” as they move closer toward the poor house.
One very important thing you must always remember is the retailer who sells a tangible product. They can see it and feel it. They know how much each one cost and what they need to sell it for to make a profit. Sometimes this makes it hard to sign on the dotted line of radio contracts, knowing it’s something they can’t see. So when you lower the rates this low. You are adding credence to the belief (no matter how untrue) that you are only selling air and it costs you nothing. Understand, I am not saying you should never lower your rates; we have, as a country over the past year resurrected a form of communication called “haggling”. As a retailer I always find myself asking if I can get it cheaper. What I am saying is do not de-values your inventory and your station by presenting such a low rate.
As a retailer let me let you in on what some of your competitors are doing during these economic times.
(Yellow pages)They are not cutting their rates. (I asked) They are reworking the ad size, removing some color options, and reworking internet exposure.
(Television/Cable) They are keeping the rates the same as last year as long as you sign a contract.
(Print) They are doing a lot of added value combo selling, taking newspaper and adding possible magazine exposure and internet together as a package, also combining newspapers in different areas for reach.
(Coupons) They are adding internet exposure and additional distribution areas.
Think “value added”
Business owners today are not looking to get something for nothing. They are looking for something that works. Every business starts with the belief “You have to spend money to make money” they expect it. That is true for stock purchases as well as advertising investments. Show them a creative advertising package or program and they will listen. All retailers want to make money and grow their business. They want the guy down the street to do well and they want your station to do well also. There is nothing wrong with showing retailers you are changing the way you do business. We all are during these economic times. But don’t give rise to the thought that you are giving up by selling inventory this low.
What Radio Stations can do?
· Add value by packaging programs with remotes
· Offer last year’s rates with a 12 month contract
· Include a jingle package with a 12 month contract
· Offer a lower rate only if monthly billing is paid automatically by a credit card on file
· Package programs and spots with internet exposure
· Start a relationship with a coupon mailing company and offer a quarterly mail out to your clients with a 12 month contract
· Offer on-air giveaways of retailers products and services in exchange for advertising buy
· Offer on-air interviews with clients in exchange for advertising buy
Recently I asked three local retail businesses this question: What is the first thing you would say to your radio station rep if they offered you an opportunity to purchase 30 or 60 sec. spot for $1.00 each
Retailer # 1: Are you going out of business?
Retailer # 2: Up to now, why have I been paying so much more?
Retailer # 3: I’ll sign a year contract if you guarantee me a $1.00 rate.
I know that not all radio stations are giving away inventory as low as this. But it needs to be recognized as a desperate and harmful measure by a few stations. How would you like to be the sales reps months from now who have to go to these same retailers and up sell them? Getting them back to what they were paying before this all began.
If you are a Sales Manager of one of these stations, be ready to go on a lot of closing calls with your people.
