||RAB's Jeff Haley Looks at Radio's Current Landscape
The following interview with RAB President/CEO Jeff Haley appeared in a recent issue of AllAccess.com.
As point man for the Radio Advertising Bureau, Jeff Haley is leading the charge to optimize radio ad revenue -- not the easiest of duties, what with the nation's slow climb out of a deep recession, new competition for the ad dollar and radio's somewhat unhip perception among the advertising community. Nevertheless, Haley has overseen an aggressive strategy to combat those obstacles and help radio's sales force attract clients through a variety of platforms. Here's how he sees the current environment and the RAB's place in it.
AA: Radio revenue was up 2% in first half of 2011. Are you satisfied with that, considering the state of economy?
JH: We're pretty satisfied, given the uncertainly of the economy, to be in the positive category for the first half of 2011, but the thing that gives us more satisfaction is the diversity of the revenue mix. There has been an increased emphasis by broadcasters to focus on the broader elements of the marketing mix of our customer. The off-air revenues were up significantly -- what's also known as NTR -- and were very strong among some of the companies. CBS Radio beat that number by 4% and a lot of that has to do with a commitment to become marketing partners with the advertisers instead of transactional opportunists.
AA: What do you predict for second half 2011 and first half 2012?
JH: At the RAB, we don't make predictions or forecast numbers. Personally, I can tell you I was very pleased this Fall to be in the plus category. 2012 will represent a greater division in where things are going. You're starting to see three major media in U.S. -- radio, TV and the Internet -- those media are in growth mode, while other media, such as newspapers, are in a decline mode.
AA: How dependent on the state of the economy is radio nowadays?
JH: Essentially, the health of radio, like all other media, is dependent on the economy. In terms of our growth numbers, there have only been three times in the last 25 years where the general direction of radio moved differently than all measured media. You can virtually count on measured media to move as the GDP -- and radio to move in the same direction as well. My feeling is that the economy has a huge impact on our business.
AA: What concrete things should radio salespeople do to increase business in the current situation?
JH: In any time, good or bad, the most successful sellers are going to be the ones who interact as marketing partners with their clients as opposed to transactors of inventory. You truly need to be client-centric, which is easy to say, but hard to do. It's essential to know each and every one of your clients -- their goals, needs and objectives -- to create something with them that is customized and focuses on solutions for each and every client.
Granted, it's tough to do and tough to scale, so it takes a different kind of seller. Our customers are looking for a trustworthy marketing partner. There's tremendous growth opportunity for radio when you approach the sales process with a consultative approach.
AA: Are great salespeople born or is this something that can be taught?
JH: Yes and yes. Obviously, you need the ability to be an articulate communicator, who can be convincing and create concepts and thoughts in terms of clients' goals. So verbal reasoning skills are crucial. By the time you enter the workforce, you probably have those skills or you don't. There's a base level of achievement for everybody in this business.
For the second part of your question, with regard to this being a learned craft, it most certainly has to be learned. If you're not doing your homework...and it's so much easier to do that today than ever before with so many resources available at your fingertips...if you're going out the door to call on a client and you haven't done the least bit of research to find out what the client's needs are, their competition, and what drives their business, then you're cutting your legs off before you walk in the door. You haven't even created the very first step that needs to take place when you're building long-term relationships. You have to take an interest in your customers' goals and needs.
AA: How much does perception play into radio sales, not just in terms of the buyer's economic mood, but of the perception of radio as a mature, relatively unhip medium?
JH: Sentiment plays an important role in all media choices. We certainly see it in the social media space these days. It's an interesting problem; we live in a vast media landscape but outsized attention is being paid to the mobile consumption of media. We find this somewhat ironic given that radio was the first mobile media platform 100 years ago. We believe in mobile and the technology needed to invest and create excitement around this new business platform.
At the same time, we believe in our technology because radio simply is the most efficient medium. It's the most-used and most well-liked technology out there. Certainly many of those who use it don't think of it that often. It's like you don't think of the air you breathe. That remains our challenge, to remind people of radio's value.
Bottom line: We're glad to have a $17 billion industry that's in position as the #1 audio choice. Clearly it's a leadership role -- and with it comes a lot of misperception as to where the technology stands, where we commit to technology and where the business is going. I have no doubt that we're in an incredibly stronger position than most people believe, because my members are not sitting idle as the technology evolves. We're being quite proactive and innovative.
AA: In your eyes, what's the best way to sell radio over TV, the Internet, etc.?
JH: That's a broad question that encompasses a lot of channels, but digital technology has borne a number of approaches. Radio is a live local media brand that could bring to bear many strategies...not just one. Frankly, the best strategy is to be true to the consumers of your brand in the first place. If you follow the listeners wherever they expect you to be, you create something that's inclusive of their needs.
We're still in the early days of streaming audio consumption and we don't know which local content and brand will emerge as leaders. There will probably be many leaders who will offer a variety of distribution channels.
Do I believe radio is still the best course of action? Yes, because it's still largely a broadcast medium and the radio brand is still garnering the lion's share of the consumer's attention.
AA: I noticed that digital enjoyed the biggest increase in revenue, percentage-wise. How big do you see digital getting as a piece of the revenue pie?
JH: Digital for us encompasses multiple revenue streams. It's to the point where we can report big revenue even from the largest broadcasters. What happens on website streams increasingly is what happens in mobile marketing, so I have three different streams. Could it grow to a point where it comprises 30% of the business? Certainly I think that's a possibility, but that's a path that has yet to be defined. The first order of business is to meet the listener wherever he wants to meet and expects you to be. Where the revenue streams and pace develop we'll see.
AA: There are still those in radio who have yet to fully exploit digital, complaining that the ROI isn't there yet. Considering the investment expense, how aggressive should one delve into digital as an advertising generator?
JH: I know of broadcast entities that generate as much as 50% of their revenue from digital -- and have a very positive ROI. However, individual broadcasters make different choices. I can cite a leading AC station that frankly decided it's not worth it to stream the station. My feeling is the ROI can't be calculated on direct, broken-out investment or return. It has to involve the investment in your brand, in reaching listeners and meeting them wherever they expect you to be.
AA: How have the big radio groups' recent efforts to centralize certain parts of their operations impacted the traditional local sales angle?
JH: I believe that there are tremendous efficiencies to be gained, in the ways to operate businesses today, that didn't exist just a few years ago. Individual broadcasters who choose to optimize their businesses by utilizing technology shouldn't be seen as a negative; you need to look at the results. Where are the listeners going? Let's let the audience determine whether live and local content, in the context across 10,000 stations in the U.S., is relevant and makes sense. They're going to vote with their ears on this.
I suspect that you'll see broadcasters continue to meet listener needs in a lot of innovative ways and our listenership continues to grow. If our content wasn't good as part of the local broadcast environment, I would expect to see listeners leave, but they're not leaving. This tells me the choice folks have made is based on sound principles.
AA: In your talks to radio sales managers and people, do you find them competing for ad dollars more from rival stations...or rival media?
JH: I would go a step further to hope and advocate that they compete for their customers' business across the whole marketing mix. The reality is if you're going to lure business to a strong, local, live content, the station brand ought to be something that encourages you to be full marketing partners across all aspects of business -- whether that includes events, customized audio packages, video or websites. Radio has a variety of tools we can bring to bear today that didn't exist a few years ago. We need to think of ourselves much more broadly as competitive across a marketing mix, instead of a medium that's beating each other up for the lowest unit cost. That's so unimaginative; there are much better ways to grow business.
AA: RAB devotes a considerable amount of energy in offering radio salespeople the ammunition, in terms of data as well as the latest sales techniques, to better close the deal. In your eyes, how much of a difference is there, in terms of business, between a good sales guy and a great one?
JH: Great sales people are using RAB's Account Manager product. Obviously, that's self-serving, but we've diversified our business to go beyond information and offer the tools that enable salespeople to do better. Along with our training and certification, we took it a step further by launching the only radio-centric CRM product. That's why our Account Manager product has taken off like a rocket. We now have nearly 600 radio stations and 3,000 users across the U.S. using the product every day. We have a big slice of the radio population using CRM that's linked directly into content, which enables the seller to be one step ahead of the competition in terms of managing, creating and growing business.
With 854 member companies, we're never short of hearing advice. Frankly we work for our members; that's the nature of a trade association. If you're not listening and hearing them, you're not doing your job. We tend to have a lot of outreach. We recently completed a very successful Radio Show in Chicago with the NAB. Afterward, the first thing I did was read the evaluation forms -- pages of comments from people on what they thought of the conference and on how we can improve it. That kind of stuff shapes the way we serve our members.
AA: Finally, how bullish are you on radio in 2012?
JH: The quadrennial years tend to be very positive from a marketing and media standpoint. We've got a political cycle, which is going to be very hot. There's more of a focus on big national platforms that can scale easily. We're getting better at that business, and the benefits from that make me pretty bullish on 2012. If we can get through 4th quarter in a positive way, our numbers should look even better for 2012.
AA: How do you view the potential for the RAB in the short term...and long term?
JH: I'm excited about our organization. We've endured through a very tough recession. Our staff is always thinking of our members' needs and resources. I'm most excited about what we're doing with RAB Account Manager. Our goal is to provide more than the traditional trade association, so as you get deeper into your membership here, you're more connected. We see that the RAB Account Manager subscriber uses our tools and information six to seven times as much as a typical member -- and the more we're accessed, the more valuable we are to our members and that creates a real positive that I find personally rewarding.
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