The world has changed. The number one concern of the people in this group—of those who responded to our e-mailing—has to be their present advertisers. People are worried about what’s going to happen. Advertisers are stressed. Regional and national dollars in small markets are pretty much gone. Then there’s a generation problem: jewelers, furniture store owners and those kinds of people have owned their businesses for many years and are looking at retirement. If they go away, what are we going to do?

The second issue has to do with the web: streaming. . .NTR on the web. . .how does the Internet fit into the broadcasting model?

And the third issue is the ever-popular, "How do I find good salespeople, and once I’ve got them, how do I handle them?"

RAB Executive Vice President/Services and committee liaison Mike Mahone said, "As we look at the trades, the impression I get is that major market radio is really having some major problems, but small market radio doesn’t have any problems, business is terrific in small markets. As we go around the room, I’d like to have you address that."

What's Working?

Jay asked for a show of hands: "Whose business was up? Whose was down?" Most of the people in the room indicated their business was up.

Jay asked the group whether they were trying new things, and what was working.

Mahone asked, "What kind of solutions are you giving them when they say, ‘I’m looking for something new, something with a digital component’? What are you offering?"

One member responded, "The main thing is brand name awareness of our web site." When asked, "How do you do that?", he replied, "How do you do it in radio? On-air ads and promos. If someone buys a flight, he/she is always involved in something with our site. We always give our sponsors links to their web sites. Any time we put a sponsor on our web site, we automatically link to their site. Anything that is multimedia, that gets visits to their web site, that gives people a reason to go to their web site. . .the link might be a coupon, or anything."

Mahone then asked the group, "Do you feel that you’re driving enough traffic to your web site? Enough unique visits to make something happen for advertisers, based on the web component, even without the broadcast component?"

One response: "Depends on the advertiser’s expectations. We did a promotion in March, sponsored by a car dealer, and all we did was put the dealer’s logo on our site; his clicks went up from 100 to over a thousand. Whether that was effective, whether we sold any cars, I don’t know; but his question was, Can we bring people to his web site?"

Another: "We tell the advertiser that we have the engine to drive people to your web site. It’s just common sense. We do contesting online, and we promote a lot of our contests online. And we promote the web site on the air, over and over and over again."

Question to that member: "Do you sell the web component separately, or is it just part of one big package?"

"We tried it separately, and we failed horribly. The original thought was, sell it separately, keep everything separate; but now we’ve combined it all."

"Do you see a future where you can separate it again?"

"No."

"Do you internally keep track of what you make off the web?"

Philippone then asked, "Does anyone do it differently?"

One member responded, "Yes. We have a whole separate Internet group. We actually have a separate Internet budget."

Mahone asked, "Do all of you have an Internet budget? Goals set for the Internet?"

One member said, "We just started to separate it."

Another member asked the group, "What’s your retention rate with clients on the Internet?"

The woman who said she had a separate Internet group replied, "Those who are consistent, pretty much stay on. They usually come on at first through a sales package."

A committee member contributed, "I think today, at least in small markets, the Internet has to be part of an overall package; but I think the biggest issue is, How do we set expectations? You can talk about the number of clicks all day long, but I think certainly from the training point of view, our sales people will need to be trained especially in web advertising."

Philippone then asked, "Do any of you have a person who is devoted exclusively to the web?"

One person responded that he had a person who did nothing but web: "The was full time, but then he started to grow, and now he has his own business, still operating out of our office; now he is on a contract basis with us." Most of the other committee members used someone in the office as webmaster, doing double duty.

The person with the full-time webmaster said, "For the first couple of years, there was a lot of attrition as we homed in on what we needed."

He continued, "With all the big national web sites that get lots of hits, clients expect low cost per thousand numbers, so we have to face that and bring their expectations more into line with a small local web site. We position it as a supplement."

Another member made the point that in the radio world, we have a limited number of stations, but in the Internet world, we are just one of millions of possibilities.

Mahone noted, "That’s good news and bad news. The bad news is the fact that there are all these opportunities, places that you can go on the web to do different things. The value of what we do in broadcasting is that we have the ability, through our connections with our listeners, to drive them to where we want them to go.

"Jeff Haley’s definition of ‘radio’ is, ‘audio that you can hear anywhere.’ It will be interesting to see, as all this plays out, whether the Internet can drive the results in the same way that radio and other traditional media can. Also, can it do the same thing on a local scale that it can do on a national scale?"

How's Business?

Mahone continued with a question: "Did your web revenues go up or down in 2007 compared to 2006?"

One member made the point, to which everyone else agreed, "It’s like anything else. When we put our attention on it, the revenue goes up; when we take our attention off of it, the revenue goes down."

Making Money on the Web

Mahone said he had one more question, to which Philippone said, "Ask all the questions you want. This is an important topic." Mahone’s question: "Where are you generating the revenue? Most of the revenue coming from radio station web sites that we hear about are from display ads and sponsorships. Is that true?"

One member said most of her revenue is coming from database marketing—she has a Listener Club that ties in most of her online advertisers. She sends out e-mail blasts containing news about the community, about the station, about special promotions, etc., and they all have advertiser messages as well.

Mahone asked, "Do the advertisers pay on actual ‘opens,’ or just on the ‘send?’" The answer: "Just on the send."

The member continued, "At first, our sales people were selling these things like crazy, and we were sending out four or five ‘e-blasts’ per week. But that was too many, so we are limiting them to one per week now. I think two a week is about ideal."

Another member said they sell a lot of "custom channels"—"The navigation bar down the left side of the page represents ‘channels,’ and we sell sponsored pages. The ‘channels’ have content generated by us—the Health Channel, the travel Channel, etc.—and we sell sponsorships that appear on the page."

From another member: "We run audio from our local news- and sportscasts on our web site, and we sell commercials to run before the newscasts starts. We simply bring over their radio commercials. We can also do video, so if they are running a TV ad, it’s easy for us to convert that into an online ad. In fact, we have our own personalities go out with cameras and shoot video of our sponsors, and we use that on the site as well."

Another member suggested that we package something together so that the advertiser can put his cable TV ad on our web site. Several other members voiced agreement, with one saying, "these days, newspapers are in the TV business, TV is in the newspaper business—we’re all in everybody else’s business."

The Streaming Question

Philippone then asked how many people were streaming. Are you streaming your music product 24/7, or just specifics?

One member said, "We are streaming what we call our ‘Adult Station.’ One of our biggest challenges is office penetration; this way people can receive our radio station over the Internet.

A member said, "I did the math, and it looks like in 2010, if you have 100 people listening 24/7, for one year, it would cost about $24,000. Does anybody know how to make that work?"

One member said, "We already have a sponsor lined up to underwrite our streaming, and we plan to start at the end of first quarter. It’ll cost us about $2,200 a month, and the sponsor is picking that up."

Another member said. "We streamed our high school football games, and that’s all. We do really well with them. We hooked up with a company that provides the gateway. We’re up to, I think 1,500 hits are a couple of our games."

Jeff Haley Weighs In

A committee member said, "I think one of our big problems is that our advertisers have not figured out how to monetize their own web presence. They are not going to throw a lot of money at supporting a stagnant web page."

Another member noted that, "The problem I see is that if an advertiser has $1,000 to spend, and he spends $150 on the Internet, that means he is reducing his radio frequency, and that’s going to be less effective for him."

Mahone responded, "The advertiser should be spending the same amount on your radio station, and should be adding dollars for the interactive component. The newspaper guys, the cable guys, they’re trying to get advertising dollars from the same client. It’s a question of protecting market share."

Keeping Salespeople -- and Productive

Philippone asked, "What about your sales people? In a lot of radio stations, the sales people are getting beat up by the clients. What are people doing to keep their salespeople propped up?"

One member responded, "I think that you keep them fresh and alive with new ideas. When they get excited about those ideas, and present them to the client, and the client gets excited, everybody wins."

Another: "Sometimes they’ll come dragging back to the station, and it turns out they’ve made another unproductive call on somebody like a car dealer. We encourage them to keep it fresh by going after new categories."

Mahone then asked the assembled, "What is your turnover like?"

A committee member responded, "In smaller markets, it’s not that bad. And right now, we are getting better candidates. All our sales managers have a requirement to interview four people a month."

Another said, "A sales trainer once told me, you have to have a buzz about your radio station as a great place to work. This will attract good-quality candidates."

In response to Mahone’s question about where sales candidates are coming from these days, a committee member answered, "The last two we hired were radio sales people from other markets. Otherwise, they come from a variety of places; life insurance is a good category, because they’re also selling an intangible."

Philippone asked Jeff Haley if he had any concluding remarks. Haley said, "There is a sense that there is small-market radio and then there’s large-market radio, and they are quite different. But as I attend these meetings, I am struck by the fact that small-market radio and large-market radio have more similarities than differences. It’s important to understand the distinctions, but it is reassuring to me that the same concerns I've heard around this table are the same kinds of concerns that I hear when I’m with larger market broadcasters."