The Verdict on "Less Is More"

All of us have had a lot of fun with the Clear Channel commercial reduction initiative they dubbed "Less Is More". Ad agencies. Industry types.

Part of the reason we love to poke fun at LIM is that the name is so ridiculous. Few people believe less of anything is more than something. Maybe in golf where the lower the score the better you play or in weight loss. You get the idea.

But holding this radio industry up to ridicule with advertisers and agencies at a time when the radio industry has plenty of other reasons to be ridiculed is reason enough for some form of outrage.

Unless of course, Clear Channel was right.

Was it?

Does cutting commercial loads get you higher ratings?

One of my readers weighs in:
"The premise is that radio is too cluttered and it's chasing away an audience. The truth is that if product is compelling enough, tolerance for ads is higher. Uncompelling product yields a tolerance for commercials around zero. Most compelling product, i.e. number one in the ratings has been voted on by the LISTENERS as being the best, so clutter, on those stations, is not an issue. Taking inventory off that isn't a bother is ripping off investors.

The most telling aspect of it all is that Clear Channel took inventory off of all of its radio stations and the audience meter didn't move a blip. Light FM has the same level of listenership today as it did when it had 25% more inventory. From a business stand point, from any measured reasoning you'd like to talk about, taking that inventory off was just plain dumb".
Clear Channel has not been able to prove that cutting commercials leads to higher ratings so it begs the question -- if you can get away with a higher spot load and make more money (for your investors), shouldn't you run the higher spot load?

Another reader says:
"Supply and demand. When the supply goes down, you can raise the price. That's what they did, especially at the top rated stations.

The other aspect about Less is More dealt with 60s vs 30s. The longer spots were sold at a discount, but took up twice as much time as 30s. So they do shorter spots now.

If you study the stock price of CC before and after Less Is More, the stock is about $2 higher. So investors don't feel short-changed".
So, did Clear Channel succeed by driving ad rates higher?

I have no evidence that LIM was actually responsible for higher ad rates. It would make sense. Pressure the inventory. Create demand. But the smartest people in radio for years -- too many years -- have been trying to get radio stations to raise their rates. Back then radio was a bargain. Today, it's on the cusp of becoming a fire sale.

Now, don't get me wrong. Radio isn't going anywhere bad anytime soon, but it is not likely to become a growth business again without the next generation -- and even radio admits it blew it with Gen Y. They're lost to their iPods, computers and mobile phones and may never be recovered.

What's more, the next generation hates commercials.

They have attention deficit, remember? That's the knock on them that you hear over and over.
Well, if it is as widespread as older people think, then radio is in trouble for another reason.

And, did I mention they don't have to listen to radio anymore. They have many other mobile options with the killer app on the horizon -- Internet streaming via universal WiFi.

I mention all of this because in judging the efficacy of Clear Channel's brainchild "Less Is More", it isn't as black and white as whether the ratings went down or the billing went up.

It's more complicated. Much more complicated in my view before we can attempt to issue of a verdict.
  • Did "Less Is More" help drive the radio industry's rates up once the segment leader, Clear Channel, initiated it over its massive platform of stations? I say no. Radio rates still languish. There are many reasons -- some have little to do with spot loads -- but cutting inventory has not helped the segment.
  • Did ratings go up for Clear Channel and competitors forced to cut commercial loads? There is no evidence other than anecdotal. And, as my reader pointed out, fewer commercials on Clear Channel's "Lite" in New York didn't act as a boost to the ratings while simultaneously cutting income for that excellent market leader.
  • Did the radio industry suffer a black eye at the hands of LIM when agencies and advertisers felt strong-armed by moves to shuttle them to commercial lengths they may not have wanted?
  • Was it a stroke of genius to hang out a big sign saying, in effect, "Radio Plays Too Many Commercials" when lots of listeners already felt that way and any advertiser stuck in the middle of an 8-unit commercial cluster knews it already. Was it "mea culpa" or hubris -- "Watch Us Cut Clutter" while not saying "while we drive your rates up"?
  • Is anyone seriously watching the next generation on this issue? They don't love radio. Don't need radio. They need a mobile phone. The need the Internet. Was "Less Is More" aimed at this vocal group of Internet rebels because if it was -- they're not the ones listening.
The jury has returned its verdict in my court.

Guilty as charged on all counts. (Jury members you are free to go and sell your exit interviews to the tabloids).

Some of my program director friends agree that it was a good thing to cut commercials. Probably not a good thing to make a federal case out of it. But back then, Clear Channel was big and mighty. Not less powerful and vulnerable.

These PDs would tell you that radio already had an effective blueprint for how to handle clutter. It dates back to the 60's when stations were loaded with clutter and listeners were getting fed up. That's when Bill Drake came along and drew a "hot clock" on a napkin somewhere in LA to create eight units an hour (outside of morning drive) and one spot per stop set.


Radio was saved from djs who ran at the mouth and sales managers who couldn't say no to dropping their rates to get some billing on their stations.

Greed. Pure greed almost killed radio when it was at the top of its game. Before Steve Jobs. Before the Internet. Before attention deficit.

And programmers saved radio from its fate then.

But now, any PD worth his or her salt could have designed a "hot clock" that would have made Clear Channel's "Less Is More" unnecessary.

And it would have been more effective.

Only one problem.

Clear Channel and the other major consolidators fired many of these PDs. They burdened the rest with increased work and responsibility for more stations while it duct taped their mouths shut.

The answer was there all the time.

It wasn't "Less Is More".

It was "Listen More".

Case closed.