- Written by Duncan
One thing I have noticed is how the economy is hitting our local radio stations. I am sure it is doing the same to other media, such as TV and newspapers alike. All of these businesses are driven by advertising revenue, and when that fall off it causes management to panic.
With lots of businesses going under, there are less potential customers for advertising in the media. Companies that used to regularly advertise are reconsidering their budgets and cutting back. Worse, they may be taking longer to pay their bills, or not paying at all. In the old days, with your regular customers, you could have a reliable predictable income to count on. If you build up your portfolio of regular customers, you could have all the bills covered. Then any other business was a bonus. Your station or newspaper was rated, based on how much regular income it could reliably bring in.
Now your portfolio of customers is shrinking and you no longer have all your bills covered. Radio stations don't come out and say this, but they are hurting bad. When things are so bad, senior management starts to make drastic changes, since what they are doing currently is not working. I call this rearranging the deck chairs on the Titanic. If you listen to radio in your area, have you noticed that they keep changing the program schedule? Perhaps they change the name of the station, or the format. One of our local stations keeps changing the presenters around, such as moving them from the afternoon show to a morning time slot, or replacing them altogether. I know they are hurting big time!
If you are a business and you advertise with local media, now is a good time to re-negotiate your contracts. Ask for more, but at a lower price. Ask for longer terms. It is either that or you pull out. The stations or newspapers will most likely go along with you since, they desperately need your regular business. You can claim your own hardships, and hint that as things improve that your advertising budget will improve along with it. You can hint that if they do not play ball, others are already approaching your business with better offers.
I have seen some local stations change hands recently, another sign that the previous owners could not make it. Now could be a good time to buy a station or a newspaper, since there are some going cheap about now. Be aware that if the previous owners could not make a go of it, it may be a money pit for you too. Don't jump in unless you have experience in this area, and have more than an even chance you can succeed. Look for multiple format changes in the last six months as a clue to how badly in trouble the station is.
In the last few years we have seen a growth in the free daily newspapers, that are given out at train and bus stations around here. I look at those to see who is advertising, and it gives a picture of what areas of the economy have some money to spend on advertising. It makes it easy to find your prospects. Of course if you are the one advertising, you can expect to get lots of solicitations from other stations and newspapers for additional advertising. It is just like advertising in the local chamber of commerce, you get no customers, but you get called by all sorts of B2B companies trying to sell you stuff.