Air Talent & Live Spots....A Shotgun Wedding
Back in the jock lounge, out of earshot of management, air talent talks honestly about doing endorsement spots. It’s there that you’ll hear how air personalities really feel about doing live reads. And, the truth is that most air talent really wish they didn’t have to do endorsements on the air. Some more tenured air talent even fondly recall the ‘good old days’ when the fortified brick wall separated programming and sales, back when ‘programming still ran the radio station.’
Indeed, in a post-Great Recession radio landscape, air talent and advertisers are joined together in the broadcasting equivalent of a ‘shot gun wedding’. Station management wants as many endorsements as possible because, as history has shown, that’s where the money is. Radio personalities, who have seen their ranks gutted in the post 1996 deregulated broadcasting industry, reluctantly do multiple endorsements, often for products and services they don’t understand let alone consume personally. In spite of the rich potential that endorsement campaigns represent for radio, they’re not as successful and effective as they could be. So what’s wrong? It’s a dysfunctional marriage badly in need of counseling.
Endorsement Strategy–From Boardwalk to Baltic Avenue
Well designed radio endorsement campaigns are a thing of beauty. Few will argue that the late Paul Harvey was the best endorser radio broadcasting has ever seen. Several of Harvey’s national campaigns are still remembered as classic, both in terms on on-air delivery and return-on-investment for the advertiser. And the foundation of this success were the unwavering high standards of both Paul Harvey & ABC Radio. First, Paul Harvey had to personally believe in the endorsement product or service. After that, a client had to meet ABC Radio’s then tough standards and practices for endorsements. Obviously, this resulted in an extensive vetting and negotiation process. It also resulted in very high value being placed on endorsement inventory. The end result was a endorsement campaign that was strategically conceived, expertly planned and flawlessly executed. Today’s radio, driven by a ‘more is better’ mentality, has flooded the airwaves with endorsements. It’s not uncommon to hear two or even three endorsements back-t0-back on some stations. What used to be our beach front, Boardwalk property has now turned into Baltic Avenue. It’s as if radio stations have turned into a NASCAR trunk so full of logos they all melt into a blur. And what is certainly a by-product of ‘do or die’ sales budgets, radio has devalued and cheapened our most precious inventory.
Endorsement Talent Fees—-A Bad Deal for Air Talent
The following argument does not apply to the likes of Rush, Stern or the highest paid talent in top 10 markets. They’re doing just fine on endorsements. In fact, most of these programs still adhere to the ‘Harvey pricing model’ described previously. For the rest of the industry, the every-day working class local talent, we’ve also gotten the compensation all wrong. Most stations pay personalities a ‘per read’ endorsement fee or in some cases a monthly retainer that is often paid directly by the client. The talent fees are a nice perk for many jocks, but generally aren’t enough to get talent to really take an ownership position on the campaign. Additionally, the fees aren’t even close to being commensurate with the advertiser billing.
Considering the amount of station revenue that can be generated by endorsement campaigns, air talent needs to be brought into the account team, and compensated accordingly. And much like sales deals that involve multiple sellers who split commission based on the part of the sale that they handle, air talent needs to be included in the split. Our current system is kind of like paying a professional quarterback only on the number of passes thrown without regard for completions, interceptions, touchdowns, wins and championships.
Now back to the jock lounge. Because of the total overkill on endorsement deals and the relatively low talent fees, air talent are justifiably not that excited about the whole process. Many just ‘go through the motions’ every day. Proof of this is the general lack of prep that goes into live copy on-air. Symptoms of this issue are live spots that are just ‘read’ and not delivered creatively and genuinely. Ever notice all those host read recorded spots that never seem to get updated? I rest my case.
Good News—-This Marriage Can Be Saved
Getting the most out of endorsement campaigns doesn’t require format changes, downsizing or even a bunch of focus groups. The improvements I’m proposing can be rolled out in just a few weeks. A few of the changes will require more time.
Sales: Long term, we need to cut back endorsement inventory to the point that it’s valued more. Based on what I’m hearing on local radio, I think the reduction should be between 30-50%. The over-selling of endorsements, including back-to-back host-read spots makes these campaigns less distinctive, less valuable and less effective. A significant reduction in inventory will require management and sellers to get better at selling the premium nature of endorsements. Then, we need to blow up the per-spot-read talent fee and truly motivate the air talent to be an integral part of the account team. My recommendation is a hybrid monthly retainer and commission that directly ties the talent into client success and account growth. In a way, it’s a modified draw and sales commission structure. When the account grows, so does the host compensation. Bottom line, if we’re going to expect air talent to truly perform and care about endorsement deals, we need to pay them appropriately.
Air Talent: For starters, personalities need to be more proactive in the sales process. They’ve settled into the indentured servant role that we’ve placed them in. We need to encourage them to communicate with sales regarding categories that they are passionate about. Then, talent needs take their live spots off autopilot and become part of the account team. No more live spots without prep or running the same copy for an entire quarter. Talent should be responsible for knowing the client’s business and industry. Personalities must keep live copy fresh by personally contributing to the copy process. That’s right. Personalities are in the absolute best position to produce copy and live spot copy points. Talent needs to be aware of how a campaign is tracking relative to results and client satisfaction. And this is just the beginning of what’s possible. Once air talent really gets skin in the game, their conceptual contributions to campaigns will help produce new levels of effectiveness and billing.
The Client: Clients will love this new partnership. With the juice that talent can add to the equation, campaign brain storming and strategy meetings will explode with creativity and solutions to advertiser and campaign challenges. And, clients who are being bombarded by digital and social marketing opportunities that are 100% track-able, will have a harder time cutting well-oiled personality endorsements from their ad budgets.
Listeners: Guess what happens to time spent listening when live spot content gets better? Listeners listen longer. Ratings improve.
So Does This Work?
Yes. I’m aware of several operators who have successfully embraced this strategy. During my years working as VP/GM for KWRD and KSKY in Dallas-Ft. Worth (1997-2008), we rolled out a endorsement system that featured limited endorsement packages with a higher price point. The results were positive. Our team exceeded top and bottom line revenue budgets for 10 years in a row, which I believe still stands as a Salem record. And client endorsements were a major part of our success. Still, weaning ourselves from wall to wall endorsements was difficult, especially the year that we cut the category back by 50%. Had it not been for very strong department heads and a key air personality who ‘got it’, we would not have succeeded.
Now’s The Time to Get Started
Your timing is good. In 4th Quarter, broadcasters on a calendar fiscal are in the budget process for the coming year. This is a natural time to roll out changes that will impact station and cluster revenues and expenses. General managers, be advised that you’ll need to adjust your cost of sales to incorporate additional compensation for air talent. However, much of the expense will be variable and triggered by incremental sales revenue.
So what’s stopping you? If you’re a GM, start talking to your department heads as well as key players in sales and programming. Run the numbers to see what’s possible. For sellers, sales managers, programmers and air talent, I recommend you start thinking about what could be possible if you had an opportunity to take your role in advertiser endorsements to a new level.
Pete Thomson
President/CEO — McQ Media
Editors Note: Through his 30 year broadcast and marketing career, Pete Thomson has worked as an air personality, production director, music director, account executive, sales manager and general manager. Thomson is currently president and chief executive officer of McQ Media, a Dallas-based marketing and advertising firm.
And now “The Rest of the Story” ……
As the executive director of sales for the ABC Radio Networks from 1995-2005, I had the privilege of managing a regional sales staff that regularly sold over 40% of Paul Harvey’s live endorsement inventory at the highest spot rates ever achieved in radio to this day. There was no shortage of national radio advertisers who wanted to be on his show, especially those with new product seeking instant credibility. The problem was Mr. Harvey would routinely turn down 19 out of every 20 advertisers we would bring him. That, and the fact that he was always sold out became our best selling tool. Listeners trusted Paul Harvey and advertisers knew it.
The Internal Sell
Our real selling challenge was to Mr. Harvey himself. He seldom said yes to a new advertiser the first time we asked. Once we decided there may be a chance to overcome his objections, such as him not using the product or fully seeing the benefits to his listeners, we’d prepare our case to address each issue he had on our second presentation to him. Sometimes that meant convincing him to test the product or if he didn’t personally need the product or there was something he didn’t personally like, we’d convince him to seek opinions from his friends and family. Many times if they liked it he would agree to endorse by relaying their experiences and later quote many of the thousands of endorsements letters that were received regarding the various products he introduced.
Establishing Value
We never quoted the $45,000 spot rate and 52 week commitment without other demands, before a prospect even had a chance to question the high rate. Here’s where the most unique selling strategy evolved. We cautioned the client that just because we had 25 million listeners, results were not automatic. To justify their investment they should be prepared to maximize the association on and off the air. We gently put the onus on the client to convince us they were committed to success as our average Paul Harvey client was with us for over 8 years and we couldn’t afford to jeopardize his creditability with sponsor turn-over. They also had to prove to us that they had the capacity and logistics to handle the increased business that Mr. Harvey had a reputation for achieving. This gave us an opportunity to talk about past and current advertiser successes, which always made the advertiser salivate. They also had to agree to personally meet with Mr. Harvey once the deal was signed and before the campaign began to help him better understand their business and brainstorm the campaign. This instantly let the advertiser know they could expect Mr. Harvey to truly be a part of their selling team. By the time we got through all these requirements, the client was selling us on why we should accept them and why they could assure results. The other great thing was by reinforcing how selective Mr. Harvey was, once accepted the client rarely had the nerve to try to negotiate. By the way, 95% of our sales efforts were a result of establishing a direct relationship with the client as our CPP efficiencies never fit into a standard agency media planning rate.
The other “not so secret” ingredient
Over 50% of Paul Harvey endorsement campaigns were direct-response and most were huge successes, but not just because nobody wrote or read a live radio endorsement or had the credibility like Paul Harvey. The campaigns also achieved results because the LIVE spot was always in a stand-alone position, a one-spot pod, meticulously integrated into superb content. I doubt if our Paul Harvey advertisers would have experienced half the results if the spots had been one of 12 in a row like many stations format for the sake of “ratings at any cost” quarter-hour maintenance. Let us not lose sight of the obvious, if the campaign doesn’t sell the product, ratings mean nothing.
Jeff C. Steele | Jeff.Steele@att.net
Dallas, Texas
Kudos to Jeff Steele for a great explanation that mirrors my experiences at United Stations/Westwood One with talent including Dick Clark, Charles Osgood, Don Imus, etc..
More recently, I’ve been fortunate to observe family members in local radio sales have great success with endorsements because, despite ever present pressures to make billing goals, they have the integrity never to compromise either their clients or their stations’ air personalities. As both Pete and Jeff have noted, air personality involvement is crucial. When I was responsible for talent, I told them that everyone at the station/network was in sales. When I was responsible for sales, I made sure they likewise knew they were in the business of programming as well.