media landscaping

Dallas Radio Station Gets Rid of Ads

Radio Stations change formats all the time.  If Alternative Rock isn't cutting it, then maybe a switch to Latin Pop will produce the ad $ they so desperately need.  Well, KZPS in Dallas is taking this to the extreme.  Apparently the switch from classic rock to a "Texas-inflected rock-country hybrid" format was not enough this time.  They are going to drastically revamp the ad model as well.

Instead of selling 30-60 second ads as radio normally does, they are going to a time-based sponsorship model.  According to an article in todays NYT:

Instead, advertisers sponsor an hour of programming, during which a D.J. will promote its product conversationally in what the company calls integration.

For example, the D.J. will identify Southwest Airlines, one of the station’s first advertisers, as the sponsor at the beginning of the program. In a prototype provided by the station, the D.J. later discusses the South by Southwest music festival, a popular annual event held in Austin, and concludes, “You know, the best way to get down to Austin for South by Southwest is Southwest Airlines. They have tons of flights. It’s the way I travel.”

The product-themed chitchat will account for about two minutes peppered throughout the hour, in contrast to the 12 minutes to 16 minutes of commercials that most stations broadcast each hour.

Clear Channel is clearly using this station as a proving ground for new ideas and I like the experimentation.  The belief behind this seems to be that consumers hate ads and will favor a station that plays more music and less "SUNDAY, SUNDAY, SUNDAY" ads that scream at you like your an idiot. 

I have two main concerns about this model:

1. Advertisers will really need to adjust their mindset on reach and frequency.  For years radio stations have been preaching high freq and now this strategy (a total 2 minutes of ad content per hour) says frequency doesn't matter.
2. Since they are cutting their inventory down to ~1/8 of normal levels, they will need to raise rates significantly in order to maintain current revenue levels.  Even if the audience doubles as a result of this move, they will need to raise rates by 4x in order to stay flat.  That will be very tough.

I may be over-simplifying the economics of radio (and showing some ignorance as well) but this is going to be tough and I wish them luck.

Coal Companies Can't Give You Diamonds

This is a great article in todays Post.  Pearlstein exposes the agency community's premise that all business problems can be solved by a 30 second spot.

"If you go to a coal company looking for an energy supply, you'll get coal as the recommended solution. It's the same with most advertising agencies, which rarely meet a marketing problem that cannot be solved or a sales goal that cannot be met by a TV and radio campaign supported by direct marketing, some pop-up ads on Web sites and a bit of public relations."

So true.  "I know that X solution would drive better results, but we will make much more commission if we do it this other way."  How often is that said behind closed doors at traditional agencies?  OFTEN.

Here is the right attitude:

"[The creative solutiuon] starts by analyzing how consumers live and get information and works backward to create messages most appropriate for those channels."

The landscape is changing:

"...the power has shifted from marketer to consumer. Thanks to the Internet and TiVo, digital radio and video-on-demand, consumers decide what information and entertainment they want. Rather than simply pushing messages on consumers, the trick is to get consumers to pull them."

Turn advertising into content...make it fun...make consumers want to watch it and forward it to friends.  In the on-demand, consumer controlled media world that is growing before our very eyes, this will be required for success.

"In simple terms, we charge premium prices now for commodity services and then give away the creative stuff, which is where the value-added is," explained David Jones, the young, cosmopolitan chief executive of Euro RSCG Worldwide. "We need to figure out a way to drive down the price for the commodity parts and get paid for our ideas."

None of this is new for most of you reading this, but it is nice to see this idea spreading.  The more air-time the flawed agency model gets, the sooner it will be over-turned. 

Winners and Losers 6/9/06

Stealing a feature I love from Jo Jaffe's "Across the Sound" podcast, here are my winners and losers of the week.

Winners

Web Advertising - AdAge reports that the Web has joined the ranks of TV and Radio as a dominant reach vehicle.  This comes from the results of an OPA study reporting the huge increase in time spent on the internet and an inetersting relationship between TV and the Web.

the link between TV and the Web is striking: About 20% of all Web usage occurs while viewing TV or immediately before or after.

The results of the study...jibes with the industry trend that has interactive and digital experts sitting side by side with those that create and buy media for more traditional advertising.

The study will help advertisers understand how to create better media plans -- especially video strategies, said Dan Goodman, senior partner at Ogilvy Interactive, New York, who said he is advocating a more integrated approach.

"When interactive becomes such a pervasive part of a daily experience, it's more the norm than the exception, so why isolate it?" he asked.

The study also said, perhaps understandably, that dominant Web users skew more affluent than dominant TV users. Additionally, Web users spend more -- $5,000 more annually at the retail level. Perhaps less expected, the Web showed fewer variations in use by age and gender than other media, suggesting it's not just a youth medium.

CBS Radio announced a large text messaging deal with Vibe (via Reuters).  Of the "OLD" media platforms, Radio has always been the most conversational.  Interacting with listeners through the phone and recently IM.  This deal takes this to the next level by allowing users in their car to text message requests and comments, entries to contests etc, which takes this conversation to the next level.  I've called into radio stations in the past and have always been hit with a busy signal.  This gets around that.

XM Radio - Media Post reports that XM's Inno portable player will soon be dynamically serving full motion and video ads on the player. 

Loser

COX Interactive - Silicon Valley Watcher reports that COX, in an effort to protect the classified revenue earned by its 42 newspapers, has blocked its connectivity clients access to Craigslist. 

NBC and YouTube - The is the first time I have ever had YouTube as a loser in my book.  But as I posted earlier, giving an advertiser (NBC) premium placement of their video content as part of an ad deal seems very counter to the DNA of You Tube. 

Snapple Buys out radio station ads for over a month

In a bold move, Snapple has bought out the entire inventory of a Boston Radio station from Memorial Day to July 4th.  While some bloggers praise the idea for its creativity, I am not so sure. 

I understand the WOW factor of owning a media property for a short period of time.  We have done this a few times ourselves with Hyundai and JCPenney and MSNBC, but I don't see how a long term buy works from a "media planning" standpoint.  Don't they teach in Media Buying 101 that too much frequency is bad?  I thought that is why they came up with the phrase "optimal frequency."  I wonder how many spots they will end up having to make.