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Friday Poll: What Retail's Decline Means for Small-Market Radio

    • 1211 posts
    May 3, 2018 10:29 PM PDT

    Friday greetings, everyone!

    This week's poll question comes from Rebecca White, who wrote:

    In 5-10 years, national retail looks like it's going to continue going in the dumper. Subway is the latest retail chain to start closing stores. We're seeing car dealerships cutting back, and mom and pop local stores (which have been our bread and butter over the years) closing up as the younger generations don't want to continue them. I'm curious what your thoughts are on this. If we lose our local businesses, we lose our local advertising. The national and regional retailers that are left are buying cheap advertising on iHeart radio and online music sites, etc. or put their dollars into ad agencies who buy the top 2-3 stations in a market. The smaller stations won't have a chance at getting any of that revenue, so are those stations next to close doors without a continued revenue stream? Yes, we're keeping it local, local, local - but if our local businesses close, where will we continue our stream of advertising?

    So for our poll question this week, we'd like to know what you think:

    What does the decline of retail mean for small-market radio?

    Looking forward to reading your replies!

    This post was edited by Rebecca Hunt at May 3, 2018 10:50 PM PDT
    • 83 posts
    May 4, 2018 7:36 AM PDT

    The decline of retail began about 30 years ago with the "Walmarting" of America and growth of malls and big box stores.  Now those categories are declining rapidly as well.  When I began my career in 1971 there were about 5000 radio stations on the air, no cable to speak of, no internet.  Today we have over 18,000 licensed stations, and the FM band is getting more crowded every day.  Add cable, more TV in many markets, and digital to the mix and anyone can see that a higher supply of ad "inventory" without a corresponding increase in demand, results in lower prices (rates)?  I believe we charged about the same prices for ads in the early 70s that I see many stations charging today.  That's tragic, isn't it.   While stations have added health care and legal ads to the mix over the years that wasn't really there in the 70s or early 80s, I'm not sure where business as a whole is headed today.  One thing is certain though.  Radio must embrace all the new technologies that are available and put what they can into the mix.  AE's need more training about what we are up against today.  But let's never forget that radio as a whole still has a LOT of listeners, and hopefully your station does too.  AE's need to present enough commercials and an engaging message and not apologize for the dollar amount. You don't ask, you don't get.  Becky, I'm also in Indiana and have felt your pain, but now that I am retired I can rant...and that's my rant.

    • 71 posts
    May 4, 2018 10:02 AM PDT

    The small market station is in sad shape with looking toward the future. I had a very nice conversation with an old boss, long since retired from radio. After I worked for him, he went on to start and operate two small market FMs in two separate markets. His insight made a strong impression.

    First, we need to quit thinking radio as defined as simply the device that is dedicated to receiving radio signals. We need to be the local audio service that goes where the locals go. We need to be everywhere they go or at least as many places as available to you. That means on the radio, on the internet, possibly on the cable company on a message channel or two and you might even rehash local news in print supported by ads with a weekday news sheet at high traffic areas. We need to find every venue we can to be a part of our community's lifestyle. That also means treating your online presence with the same attention the request line was given back in the earlier days. My old boss said we need to think real estate agent listing: cover as many hot buttons people have to maximize the number of potential customers. If they like TV, you're on cable. If they like print, you have a daily news sheet. If they like online, you have a strong presence. He said to use that hot button to expand them to include radio. 

    We need to be forward thinking. We need to acknowledge national chains and online sales are spiraling the hometown business owner to the point the profit and loss lines are coming closer together with each year that passes. To counter that we need to use the tools we sell in radio to educate the consumer on the value of the local merchant. The listener needs to know the local business can get what you can buy at the national chain and from online sources even if a special order. Most that go for a national chain lower price actually spend what they save to acquire the product from a more distant merchant and many times online spend a good deal on shipping. Shopping locally is not more expensive considering and saves you time. We need to educate the local business adds to the quality of life, increases the tax base, employs local people and makes living there more convenient. When jobs leave, when the tax base dwindles and when you have to drive 20 miles for what you need, towns begin to die and do so rapidly. To buy locally whenever possible, the return is not only the benefit of buying from a friend or neighbor but a positive investment in your town. We need to teach this and try to change the tide. Only by constant awareness (frequency) (top of mind awareness) can we be proactive in securing our position.

    We need to quit being single minded in revenue generation. We tend to be all about the commercial. An exercise might be if you had to quit using commercials to benefit businesses tomorrow, how could you benefit the local merchant for those same dollars? Who else can benefit from your station?

    We need to think beyond the business community. The business community and the commercial were once ample in providing needed income and reasonable profits. This is changing. Who, other than the business owner, can benefit from the marketing power of radio? How will you create the need and the right setting for them?

    As I mentioned in the first paragraph, by offering additional options than just the over the air advertising product, we reach a wider base of prospects and a wider number of monetary options affordable to a wider base of clients that might not prefer radio or not be able to purchase a meaningful schedule on an ongoing basis.

    My old boss looked to increase his base of revenue via the smallest of businesses. He had options the hobby business or work from home single person business could afford month after month. He noted these folks are so acutely aware of their position, they have a greater understanding of the concept of by supporting you, you support me and we thus, need one another. They are more acutely aware of how important it is to have that financial base you can count on. He opted for $5 a week. They didn't get much but they were constant, paid on time and didn't take much time. In fact he rarely had to call on them since they were at every chamber mixer and grand opening like he was. He'd bunch 4 or 5 such clients in a single spot I think he called the preferred local merchant directory. He even had Avon, Pampered Chef and other such reps buying.

    One friend adopted the public radio idea where people could become day sponsors to celebrate birthdays, anniversaries, life achievements and memorials. That same person evolved their Swap Shop to a paid program. In time he had merchants writing their own spots to buy a space on his newly named "Marketplace". In time, he added a repeat in the afternoon. Heck, even churches bought. Even though some merchants bought spots they wrote, other merchants wanted their schedule to include this daily feature. His weekly rate mirrored the per word rate for a classified in the weekly local paper. In fact, the paper proposed a 50/50 split by offering an on air and in print option for one price (he didn't take them up on it).

    Another friend used to team up on any fundraiser by a non-profit to split 50/50. The fundraisers frequently had local individuals who would donate a good sum to help and the station got 50% by helping in providing their product to not only increase awareness but offer a value to the contributor to encourage greater donation amounts. He said the individual dollars more than made up for the business dollars discounted through the 50/50 split.

    Another station did a discount card every quarter with not more than 24 merchants. The $10 card always offered at least $250 in savings on products and services a typical family used. Non-profit groups sold the cards and gave 50% to the station, keeping 50% for themselves. Restaurants especially loved this as did auto mechanics. He said it was rare if they said no. He started with 1,000 and eventually reached 5,000 because folks liked it so much they'd want to buy several cards (ie: one business owner bought one for every employee).

    Naturally, you need to sell online presence. It should not be an afterthought. The online presence should be given the same attention and value as your on air offerings. Can you name one business that thinks being online is not important? Every business doing business with your station should be a part of your station's online presence. Do you have a business directory?

    How can you benefit from non-radio projects? What about community recipe book, a birthday and anniversary annual calendar, and so forth? What non-profit wants to take on the project and benefit from your reach in return for a 50/50 split on proceeds.

    One Christian station even partnered with a small Bible College to have radio classes that ran in evening hours. You could listen for free but if you paid the college tuition, you got study material and access to the instructors, took tests, earned a credit and such. The station got a cut of the tuition. It was time they couldn't sell anyway and it sure beat the revenue they got from a national ministry's share program. It was a natural since the college had many more night class students than daytime full-time students. Most had a day job and classes in the evening.

    I think you can see, this nickel and dime 'stuff' solidifies your base further and sets you up to look beyond the mere commercial and your over the air signal to create new revenue to replace dwindling local merchant budgets. The key is to keep them simple, delegating all the details you can to your partner and simply taking your cut for doing what you do best: building awareness and keeping it 'top of mind'. As radio dollars dwindle, you offer options that create dollars. You can control more of the advertising pie.

    Final thought: Why is it we rarely use the benefits we sell to our clients to benefit ourselves (ie: you advertise a job everywhere but on your station)? If it works for our customers it will work for us too. Don't undersell yourself on what you do every day for your customers.

    This post was edited by Bill Turner at May 4, 2018 10:17 AM PDT
    • 1211 posts
    May 4, 2018 11:14 AM PDT

    Bill, what a great, thoughtful post . . . thank you so much for sharing!!!!

    • 1211 posts
    May 4, 2018 11:16 AM PDT

    From Robert E. Lee via the RSC Facebook page: It means ALL radio Account Execs need to redouble their efforts to get the smaller retailers to go big with the 'buy local' appeal, which we have found that consumers and listeners are very receptive to. We need to educate our smaller, local retailers how powerful a medium radio is for reaching out to consumers and their hard-earned dollars.

    • 17 posts
    May 8, 2018 11:13 AM PDT

    The industry needs to work together to educate the public how prevalent or dominant radio is. We own the best mouthpieces in America, and we're not using them to our best advantages. It doesn't make sense to me. 

    When wireless bandwidth is abundant, fast, and unlimited, terrestrial radio is in big trouble unless it makes the digital transition. However, it will probably be a few years before the wolf is really at the door.