Radio Can Be An Important Part Of Your Long-Term Advertising Plan…
But Watch Out For These Common Pitfalls That Can KILL YOU.
If you’ve been reading this series, you know that I think radio is a great advertising medium for contractor marketing. I’ve painstakingly built a case for why radio is a good fit for remodelers, why and how it’s better than other media, and how to go about implementing it.
Written by Rich Harshaw
Now I want to pull back the curtain and show you some of the potholes you’ll encounter on the way to success—trust me, they’re there! But just knowing what to look for—and what to watch out for—can make a huge difference in your results. Here are some of the doozies:
Don’t Assume Your Negotiation Skills Will Work On Radio: Here’s the problem: Radio has its own set of jargon, and if you’re not fluent in it, you can’t possibly negotiate effectively. Most business owners are good negotiators—it comes with the entrepreneurial territory. You negotiate things like salaries, leases, equipment prices, and selling prices with customers all the time. So the natural inclination is to assume that you can walk into a meeting with a radio rep and negotiate effectively.
But you can’t.
Here’s how a typical negotiation with a contractor—who is normally a good negotiator—and a radio sales rep goes:
Radio Rep:This schedule is $5,000 a month; it includes 10 spots a day during prime day parts (7 AM to 7 PM), 10 spots a day during evenings and overnights (7 PM to 7 AM), and 5 spots each on Saturday and Sunday. In addition, we’ll give you 250,000 impressions a month on our website if you sign a six-month contract.
Contractor: (outraged, incredulous) What?!? $5,000? There is no way on earth that is going to happen. My entire advertising budget is only $8,000 a month, and $7,000 of that is already committed to other stuff. MAYBE I could allocate $2,000 a month, but not a penny more.
Radio Rep: My manager will kill me, but I could come down to $3,500, but I need a twelve-month contract.
Contractor: (defiant) I’d do $3,000, but I’m going to need 12 spots during the day, 15 spots at night, 10 spots each day on the weekends… and I need you do DOUBLE the online impressions. And I’m NOT signing a one-year contract. You can forget that.
Radio Rep: I’ll have to check with the station manager… I can’t approve that myself. But I tell you what… if you commit to six months, I will get that pushed through. I’ll take the heat—do we have a deal?
Contractor: (triumphantly) I’ll commit to three months, not a day more. If you get that, I’ll sign today.
Radio Rep: (looking defeated but secretly beaming inside) Okay, I guess we can do that. But I’m going to get killed by my boss.
The problem with the scenario is the contractor has no idea what he just bought. His negotiation was based on the points that he could quantify—the number of spots, the dollars, and the length of contract—but with no real understanding of how much those spots are worth. This is the crux of the problem.
When negotiating radio, you’ve got to understand, FLUENTLY, an entirely new language. You have to become intimately familiar with things like Net Reach, Frequency, Gross Impressions, AQH, Gross Rating Points, CPM, and CPP. On top of that, you have to understand exactly what demographic is being discussed, and judge the numbers being presented against that.
The definition of the terms above are well beyond the scope of this posting. My goal here is to simply open your eyes to the differences between your “regular” negotiations and radio (and TV, for that matter) negotiations.
All of which leads to our second mistake…
Don’t Buy Airtime Based On Spot Prices: This is the single-biggest rookie mistake I encounter with business owners when buying radio or TV. They become obsessed with “Cost Per Spot” without any real understanding of what that spot is worth. This then leads to a mentality of “buying as many spots as possible” because, the thinking goes, more is better and results in a larger amount of home improvement leads. I’ve heard many contractors brag about buying 250 spots for $2,000 (or whatever details).
This is about the dumbest way imaginable to think about radio.
That’s like a friend telling you he’s going to buy a house for $300,000. When you press him for details about the house, all he can tell you is the town it’s located in, and that it’s a two-story home. But it’s impossible to know if a house is worth $300,000 without knowing exactly which neighborhood it’s in, how many square feet it has, how many bedrooms and bathrooms it has, how big the lot is, how old the house is, what level of finish out is in the house, etc. It’s simply impossible to know if the house is a good value without knowing those details.
Yet business owners glibly pronounce that they got an awesome deal on XXX spots for $Y,YYY all the time.
When it comes to radio and contractor marketing, it’s all about how many TARGETED people actually hear your ad, not the raw number of spots that run. But again, per our discussion of negotiation above, if you don’t understand the nomenclature, you’re losing before you ever start.
Here’s a rule of thumb for you: The easiest way to measure media is based on COST PER THOUSAND (or CPM, in radio parlance). CPM is a simple measurement of how much it costs to reach 1,000 people. But not just ANY people; you need to measure TARGETED people. So if your target market is adults aged 45 to 64, you need to know how many thousand of those people are reached for each dollar you spend. And this pre-assumes, naturally, that you’re on the right station to reach the right KIND of 45 to 64-year old adults in the first place.
If this is starting to sound a little complicated, that’s the point. It is a little complicated. And it brings us to our next mistake…
Don’t Trust Radio Sales Reps: First of all, a big fat disclaimer—there are plenty of great radio reps out there. I’d like to give a big shout out to the dozens of fantastic reps I’ve worked with past and present. But you have to be really careful; a lot of these people are in fact slippery. They’ll manipulate data to make their station look better than it really is. These people pray on business owners’ lack of sophistication and understanding, like we’ve just discussed.
I’ll cover this topic in more detail on a future post, but here are a few things to watch out for:
- Demographic Shell Game: They’ll show you a station ranking report (from Arbitron, the “Nielsen Ratings” of radio) that shows that their station is “Number 1.” What they fail to point out, is that the report is referring to a very narrow demographic and/or time frame. For instance, women aged 25-54 on Sundays from 6 to 9 AM.
- Rotator Roulette: You’ll request and receive lower rates, but fail to notice that they have “opened up” your rotators. Rotators are spots that are to air between certain times of the day; for example, between 6 AM and 6 PM on weekdays. They lower your price, but open the rotator to 6 am to 8 pm; this gives them the right to stick your spots in the less attractive 6 pm to 8 pm time slot.
- Weekend Warriors: Reps will frequently try to pawn weekend spots off on unsuspecting customers. One way to do it is to create a rotator that says M-Su 6a-6p (Monday through Sunday, 6 AM to 6 PM) instead of the preferable M-F 6a-6p (Monday through Friday, 6 AM to 6 PM). Or mixing two poisons (see above): M-Su 6a-8p.
Here’s the point: you have to watch what these suckers send you. You have to look at every single version of proposed schedules and make ABSOLUTELY SURE that the Gender, Ages, Time Periods, And Days are exactly what you think they are. I’m telling you, some of these people are slippery, and if you don’t know what to watch out for, you will be burned.
Don’t Let The Station Produce Your Ad: This is usually a matter of convenience and economics. The sales rep will give you what is proudly promoted as an “added value” of “free” advertisement production with your order. The old “you get what you pay for” is definitely in play here.
The problem isn’t that they’ll do a terrible job, per se. It’s that you’re very likely to get a homogenized ad that offers very little in the way of a distinctive-sounding voice. And certainly not one that you can call your own as you start to brand your company through radio.
Good commercial production is fairly inexpensive—$150 to $300 per spot; it’s worth the extra money to DO IT RIGHT.
Don’t Shy Away From Lower Rated Stations: A lot of advertisers are scared off by lower ranked stations—and this is potentially a huge mistake. Before we get too far into this discussion, it’s important that you ONLY deal with stations that are Arbitron rated. This means they subscribe to a service that is very similar to Nielsen Ratings for TV… where people’s listening patterns are tracked and relative rankings of stations are compiled. Each station has to pay money to Arbitron to have access to this data, so some smaller stations might not be willing/able to pay. If that’s the case, do not buy from them because you have NO IDEA what you are buying. There is no way to measure radio listeners without Arbitron.
That being said, if a station is rated by Arbitron, don’t be afraid to use them if they are demographically a good fit. Listeners to lower-ranked stations are just as likely to be loyal to that station as any listener of any station. Your goal with advertising is to cultivate prospects into buyers over time. You want ongoing conversations. Lower ranked stations can accomplish this for you—and often at much lower rates than their higher-ranked brethren. Radio ads are sold on a supply and demand basis… there is only so much airtime that can be allocated to ads. Higher ranked stations tend to be bought more readily by big advertisers who are hungry to get in front of as many people as possible… so their inventory is often tighter and their spots more expensive (on a CPM basis, per above). Shop the lower stations and you’ll be pleasantly surprised that you can consistently reach a good number of target prospects for relatively little money.
Don’t Treat Radio Like Direct Response: Okay, so this is a 6th mistake and I only promised you 5. You are entitled to a full refund! Here’s the last mistake: Whatever you do, don’t quit after a couple of weeks or months! For most companies (and there are exceptions), radio is not a direct response medium. You’re not trying to make the phone ring today. You’re trying to make the phone ring next month, next year, and for years to come after that. Commit to a modest budget for a year, and stick to it. Let the magic of repetition and your identity do their jobs. You’ll see your call volume go up, your web visitors go up, and most importantly, your SALES volume increase.
Note: April is Radio month, a series of 12 articles all focused on everything you could ever want to know about making money by advertising on the radio.
March 31 – I Want To Punch Christine Cook In The Face
April 2 – Why You Should Immediately Allocate 10% Of Your Budget To Radio
April 4 – How Radio Stacks Up Against Other Media – The Pros & Cons
April 8 – The Nuts & Bolts Of Making Radio Work For You
April 11 – 5 Ways To Totally Screw Up Radio & FAIL
April 15 – How To Choose The Right Stations & Out-Negotiate The Sales Reps
April 17 – Client Success – Small Town Remodelers Experience Big Success On Radio
April 22 – Reader Mail: Should I Use Radio DJs For The Voice Of My Commercials?
April 24 – 2 1/2 Years on Radio… And Still Going Strong
April 28 – How To Write Great Radio Ads… & A Bunch Of Examples
April 30 – The Radio Ad That Made Listeners’ Ears Bleed
May 2 – Take The Plunge – Let Us Help YOU Get On The Radio
© 2014 – 2016, Rich Harshaw. All rights reserved.