Radio Lives

In 1951, radio promotions pioneer Todd Storz caused legendary traffic jams in Omaha, Neb., when his local station KOWH gave clues to listeners where they might find free cash. The next year, Storz ordered a deejay to just climb a tree and start throwing cash at passers-by.

Creative stunts and contests endure more than five decades later, as stations and their advertisers take advantage of technological advancements like cell phone text messaging.

Broadcasters need all the help they can get. Ratings are slipping, and satellite upstarts Sirius and XM continue to pick up millions of subscribers willing to pay $10 a month.

The Internet has enabled radio to transform itself from a strictly audio medium to one with visual immediacy as well.

Promotions have become increasingly important to the radio business in the past decade as a primary strategy for building a sense of community and combating audience erosion, notes Jim Kerr, veteran DJ of New York classic rock station Q104.3.

Virtually every radio station now encourages the audience to register online for “preferred listener status.” This, in turn, helps solidify the bond between the listener and the station, as well as partnering marketers.

“Promotions are the way to connect directly with listeners, rather than just connecting through the medium,” says Kerr. “It's taking that extra step — the part of this business that gives us the most personal contact with listeners. We spend a lot of time by ourselves in a little studio speaking into a piece of metal.”

Nationally, terrestrial radio lost listeners for the third straight year in 2006. According to Veronis Suhler Stevenson's annual communications industry report, the total number of people listening in the average quarter hour decreased 2.5% to 26.6 million. That included a 0.4% slip in automobile listeners, to 9.2 million per quarter-hour, and a 0.9% dip among in-house listeners, to 7.1 million.

“In any market, when you're battling to take the lead in a format, it's important you have leadership in promotional spend,” says Dr. Leo Kivijarv, vice president of research for PQ Media, which collaborates with Veronis Suhler on the communications report. “Listeners will be less likely to switch channels in between the music.”

Even though the funds spent on promotions represent a small share of revenue, it continues to be a significant revenue generator as they're bundled with larger spot buys, according to Dr. Kivijarv. Barter arrangements have largely given way to straight monetary deals for promotional time.

Total spending on radio — broadcast, satellite and digital advertising and content — hit $21.77 billion in 2006 for a 3.7% growth rate, according to the Veronis Suhler Stevenson. Terrestrial radio revenues were flat for the year at $20.14 billion, while satellite radio revenues grew by 95%, to $1.47 billion. Digital content and ad spending was at $154 million, a 75.4% annual increase.

Veronis Suhler anticipates a continuation of the talent migration from terrestrial radio that began dramatically with shock jock Howard Stern, who is now on satellite radio exclusively. And with all the other entertainment competition fighting for consumers' leisure time (e.g., iPods), radio listener share is likely to continue to erode.

“The immediacy that radio has is really suited to promotions and being able to respond in real time,” says Weezie Kramer, regional vice president of Entercom Communications, the nation's fourth largest radio broadcaster. “We always had the telephone [to interact with listeners]. But you don't have to be the tenth caller anymore.”

A station's Web site enables not only on-demand live and archival programming without a radio receiver, but also immediate listener entry into contests — expanding the range of the traditional on-air pitch.

New York's Q104.3 has 70,000 listeners signed up to receive its weekly e-mail “blasts” that give them an advanced heads-up on upcoming promotions and station events.

Its “workforce” promotion enables registered listeners to win $104 when their names are announced during four regularly scheduled contest times daily. The current contest is for the title of honorary music director, with listeners submitting playlists to register. The daily winners are entered for the ultimate prize of $104,000.

A trio of Entercom rock stations in Sacramento are conducting a cross-promotional campaign, offering listeners the ability to customize and download ringtones with a tool called Tonemaker DJ. The ringtones include a theme from local car dealer Maita Scion, which has been sending a Scion branded with the Tonemaker DJ logo to Sacramento night clubs.

“There are unlimited possibilities of what you can do with your Web sites,” says Mark Kopelman, senior vice president of the Western region for Clear Channel Radio Houston. “A lot of stations are now able to take their best or high-profile talent and time-shift it to online.”

Those audio streams spawn fresh revenue streams for stations that can sell online ads around the repurposed on-air content. “It's a whole new revenue stream,” Kopelman notes.

Non-spot revenue growth is borne out by the latest Radio Advertising Bureau figures. Nationally, that category totaled $409 million in the second quarter of 2007, a 16% increase over the same period last year. And the $711 million recorded in non-spot revenue for the first half of 2007 represents a 12% rise over the first half of 2006, according to RAB.

Other mainstay revenue categories, including local and national revenue, were flat or slightly lower over the same periods.

But it's not just the signals' cyberspace re-transmission that's having a transcendent effect on radio, Kopelman says. It's the ability to promote offers via e-mail, enable requests from Web sites via cell phone, and then send the listener a text message alert about precisely when the tune will play.

While the tenth-caller routine is still in the playbook, as are concert ticket giveaways, the preferred option play is to push the listener online.

“When it comes to radio promotions, it's not about producing a radio spot in a cluster and getting it buried. It's about engaging the station and reaching beyond,” says Mike Valentino, CEO of TMPG, a radio promotions specialty agency. “You can't do radio promotions without an online component.”

TMPG's campaign to promote tween pop sensations Ally and AJ cobbled on-air appearances with online blogs, ticket giveaways and a “flyaway” to a concert appearance.

For a campaign promoting Dish satellite TV, TMPG arranged for DJs to have Dish hook-ups so they could talk about the viewing experience first-hand on-air. An online component offered video downloads and featured a member of NBC's “Saturday Night Live” comedy team dishing on cable TV — and never directly mentioning Dish TV.

“Everybody's looking for that touchpoint,” says Valentino. “Everything's going online. It's free-form syndication.”