Over the last week, I’ve met with several business owners who have been pitched a special one-month advertising package from radio and television stations. You can always tell when radio and television stations get ‘soft’ in spot sales. The packages come out. Packages are a one-sheet sales pitch that are written by sales management. They’re often wrapped up as ‘great, once-a-year opportunities’ for advertisers to get a huge discount on media inventory. Most of them are a one-month deal designed to sell quickly and help the radio station get to their sales goal for the month. Radio and television sales departments generally start cranking out the packages in June, when their business goes softer, after Q2, which is historically very strong.
Packages come with great names too. “The July 4th Firecracker of Spot Savings“, “Sizzling Summer Savings“, “Hot Spots in the Summertime” and other headlines top the sales packages. They’re always in limited supply too. “We only have enough inventory to sell 4 of these opportunities and I didn’t want you to miss out.” Herb Tarlek meets Mr. Haney.
Fig 1: Advertising Results Growth Chart
Packages are a bad idea for the both the station and the advertiser on a number of levels.
First problem: A one month campaign on any radio or television station is designed to fail. Radio and television both require reach and frequency (multiple plays of the ads for weeks and sometimes months) to achieve a significant and measurable result for the advertiser. The relationship of time to revenues resembles the graph in figure 1. Regardless of a station’s audience size, consumer response and sales from 1 month of advertising is negligible. As opposed to 1-month packages, campaigns that run 90 days and longer are much more likely to produce real results for the advertiser. The sales managers who write the 1-month packages know this fact. So does the sales rep. But nobody tells the advertiser. That’s because the advertiser is, by nature, conservative and wants to ‘test’ the medium. So the station and the rep give in so they can at least sell something. And their new client, who is often new to radio or television advertising, signs up for the 1-month Titanic advertising cruise.
Fast-forward 30 days. We have an advertiser who hasn’t received the results they expected. The rep is not returning their calls because they know it didn’t work. And sales management is already consumed with the brand new sales package that’s on the street. The bottom line: By selling a 1-month package, a client was sacrificed so a station and rep could meet their budget.
The damage done from packages doesn’t end there. No, there’s more. Packages poison junior sales reps. Oh yeah, I forgot to mention that these packages are most often sold by junior reps. Why? Because the senior people, who actually have advertiser relationships that they want to protect, learned long ago not to sell 1-month deals. Packages are designed for and sold by newbie reps. Junior reps have been ‘on the street’ less than 2 years and are living month-to-month in broadcasting. Because they don’t have long-term, base business but are very accountable to meet monthly sales goals, they’re focused on survival. They do phone blitzes and door to door cold calls looking for their next victim. They churn and burn every month and rarely develop long-term business or marketing success stories. Eventually, they get frustrated. And unless they get fired for not selling enough “July Firecracker Spot Spectaculars“, they eventually quit.
Now, let’s get back to our advertiser. He’s not only feeling disappointed, but he’s told his entire network of friends, relatives, customers and business associates that radio/television commercials don’t work. “I tried radio once. Spent 5k on WXYZ. Didn’t work. Radio doesn’t work.” The former advertiser has turned into a one-person negative publicity campaign for the station and the medium. And chances are he’ll never come back to radio or television.
The Solution: By abandoning 1-month packages, everybody in the equation wins. But it’s going to require some changes.
Station Management: Leadership needs to lead by not accepting new business orders for any term less than 90 days. Doing this may hurt a bit in the short run, but long-term client retention will skyrocket. At one station I managed, we calculated that 1-month deals renewed at a rate of less than 20%. At 90 days, the retention rate increased to 70%. After 120 days, close to 90% of advertisers continued long-term.
Junior Sales Reps: At a minimum, add 2 months of media to the 30 day package. Better yet, make it a 6 month deal. Selling long-term will help you be successful faster and will greatly increase your odds of being a long-term success in the industry. In my decades of selling and managing sales reps, I often observed that the the time required to service a 1-month deal often exceeded the time needed for longer-term clients.
Advertisers: First, I would seriously question the skill level of anyone who comes in peddling a 1-month package. As cited earlier, it’s often a signal that you’re working with a sales rep who is new, untrained and possibly desperate to make a monthly goal. Hardly the person you want to entrust with your company’s marketing. Beyond that, I would be very wary of media companies that pitch packages. This mode of selling signals a company that’s more focused on short-term thinking than long-term relationships. Unless you’re an established, annual advertiser on a station and can use a package to enhance your campaign, 1-month packages just don’t have value.
At McQ Media, we work with our clients to develop long-term relationships with our media partners. In doing so, we’re able to achieve rate efficiency and maximize added value at levels that aren’t attainable in 1-month campaigns. Campaigns that we design and implement have historically exceeded our client’s ROI expectations. If we can help you with your company’s marketing, I encourage you to contact us.
President/CEO — McQ Media Inc.
Editor’s Note: Pete Thomson has been in broadcasting and marketing for over 30 years. As an Account Executive, General Sales Manager and General Manager, Thomson excelled in developing long-term, successful campaigns for local, regional and national advertisers. Thomson is President/CEO of McQ Media, a full service media and marketing firm based in Dallas-Ft. Worth, Texas.
