Big Three See Sales Slip in July & Is Radio Going To Get Short-Changed On Political?

                 

 

 

 

Radio’s most important category, automotive, saw a drop in sales in July that has some worried the industry is entering a sustained plateau. Automobiles have been selling at a record pace for six consecutive years. In July, GM, Ford and Toyota were all down. GM dropped nearly 2%, Ford was down 3% and Toyota was off 1.4%.

So far, what we’ve heard from radio executives on their earnings calls has been that this big political spending is expected to come in more toward the third-quarter. That doesn’t seem to be the case for television. Already you can see how the Democratic candidate for President, Hillary Clinton, has taken her message to TV viewers. So what did radio get from the candidates last week?

Media Monitors reported on Monday that there were no ads run by either candidate on the radio last week. And there were no spots run against either candidate either. A lot of radio companies were banking on a big political revenue push this year. In addition to the Presidential election, there are also House and Senate races along with ballot initiatives that should benefit radio as we continue to edge closer to election day.

BONUS:

How To Take Control Of Your Agency Business

(By Kevin Neathery)

 There are two kinds of ad agencies: real agencies and local agencies. Real agencies can serve local, regional, national, even global clients. They don’t need a ranker, because they subscribe. They send an avail and negotiate rates based on audience. Then, when in agreement, they send an order and a fully produced MP3 featuring out-of-market voice talent. Covet real agencies.

Local agencies are competitors, not customers. They poach your clients in your coverage area, expect lower than local direct rates, demand your station’s talent write, voice, and produce their clients’ commercials, pay 90-plus days, and expect you to pay them a commission for the privilege. And oh, yeah, before they can place the next buy, they need five up-front Paul McCartney tickets with backstage passes. I think we would all agree it’s downright shameful how often we in media kowtow to these talentless hacks. Stop kissing ass and start kicking ass!

Don’t recognize. Challenge the agency-client relationship. Imagine your radio competitor across town sent you a “station of record” letter dictating all client communications must go through them! You’d laugh, but agencies do it all the time, and we comply. Yet they show no loyalty in return. Treat these violators like any other competing media.

When any agency pushes too far and doing business no longer makes sense, refuse to recognize. Let them explain to their clients why they are not on your air! Never lose sight of the fact that agencies are voiceless without you, the media. They own no FCC licenses, printing presses, high-traffic digital properties, towers, or transmitters. They don’t employ legions of air, news, production, and retail sales talent. They need you more than you need them.

Protect your AEs. Over the years I’ve seen so many managers make closed-door deals with agencies that seriously undermine their local sales effort. And I’ve known many agencies that sell with the pitch “I can get you a lower rate and free production!” Never give an agency a lower rate than your AEs can offer every day on the street. For you, the sales manager, violation of this rule is a sin.

Don’t let AEs handle agencies. You, the sales manager, should handle or at least oversee agency negotiations. AEs, bless them, are just too nice. They’re so afraid they’ll lose a buy. They cave. The same skills that make them successful with local retailers work against them with agencies. Now, if an AE had influence on a buy, maybe with a store manager or franchisee, pay them commission as reward, but you do the deal.

Agencies make the rules. Make them play by them. Develop a dual rate structure, one for agencies and one for local direct. Agency rates should be based on audience. Local direct, on supply and demand. Agencies make you pay for that expensive ratings survey, so make them pay for your performance. I had a competitor once with great ratings make no such distinction for years, losing untold thousands, maybe millions. Make them play. Make them pay.

Educate clients. “You’ll pay more for less service.” When a local direct client hints or announces the decision to “go with a local agency,” make sure you remind him that he will pay a much higher agency rate, he’ll pay for copywriting and production, and that bright, caring AE servicing his account will no longer be stopping by.

Learn to say no. Once, a local business owner on our air for years passed away and his partner took over. Soon, there came an agency-of-record letter. Then a call from the buyer, demanding invoices and contracts. When I said “Uh, no,” her incredulous response convinced me no media had ever refused. Next day, the client was on the phone, and I explained our position. Soon, he was back on our air — local direct — and all was well again.

Eliminate the term “value added.” “Value added” is a term invented by agencies to conceal the true meaning: free stuff. If an agency for a fast food restaurant wants free stuff, negotiate for gift cards and a cumebuilding promotion. But never agree to or even speak the term value added.

Be polite, but stick to your guns. When an agency requests some ridiculous rate or stupid CPP, simply say, “I’d love to accommodate, but anything less just won’t clear. Avails are tight and rates firm.” Don’t get mad. Stick to your guns, and you’ll be delighted at how often you win!
Follow these tips and take control of your agency business.