This Bud's Not for Radio

Radio advertisers have begun to start eating their dead.

Anheuser-Busch is now dictating a new payment policy for their Budweiser radio commercials.

120 days.

That's four months after the spots have run -- assuming the client decides to pay the stations "on time" -- if you can call net 120 days on time.

Radio stations just have until the end of this month to protest the new terms or they become automatic. Of course, for the stations that opt out, don't expect any Budweiser business.

Anheuser-Busch's new owners, the Belgian/Brazilian mega firm Anheuser-Busch InBev is dictating the new rules. Seems like they think that there is a new world order for multinational companies. I'm not making this up. In effect, they are saying the rest of the world is stupid enough to accept payment in four months, why not American radio?

You know what will happen in this game of beer pong.

RAB will swallow its tongue and, instead, promote their Sales Conference which offers yesterday's sales techniques to a business that is fast going south.

The NAB is propping up RAB -- don't look for them to piss off Anheuser-Busch. Better to let it slide. It's only money. Anheuser-Busch is good for it. Hell, they pay faster than Mel Karmazin's Sirius XM -- what more do you want?

Radio consolidators are too scared to protest. They find their stations off anywhere from 15 to 40 percent so far this year. Send stamps if you want. Just advertise.

Imagine drinking a Bud four months after its stale date.

This is going to get uglier.

One of my readers reached for his Nexium.

"Some of my worst memories from my 32 years in radio are those of being in the undersized lobby of large Bud Distributor with two other competing stations waiting for our meeting. As always, the buyer would poke out of the conference room to tell all of us that 'we're running a little bit behind'. Eventually the exhausted Bud, agency and distributor reps would review our proposal, call it inadequate, too expensive and send us on our way with the orders to come up with more promos and lower rates 'if you even want to be considered'."

The outcome was predictable: the rock stations got most of the budget. Sports play-by-play deals were next and the rest would settle for scraps.

Except now, price negotiations will be less honest.

Berkshire Hathaway's GEICO has led the way on negotiating the lowest rate through weeks and months of torture, then once both parties shake hands, the agency demands more discounts and better terms.

Expect this element from snakes in the grass who want the lowest rate even if they get it in an unethical way.

You can almost see the day coming when a manager and seller has to go through all the above and the manager pulls back the rep's commission at 90 days with the argument that they will get 75% of their commissions back when the bill is paid at 120 days.

This Bud is not for radio.

In spite of the exodus of talent from radio, there are still salespeople out there who know how to sell. Policies like this will be a huge disincentive.

You'd think that radio companies in tough times would like their money sooner but can you hear them now? We can't risk losing the business.

The ironic part is that radio is and has always been in the drivers seat for advertisers. You can't get that kind of reach (even with declining audiences) that cheaply.

I'd like to use the word inexpensive instead of cheaply but radio missed its chance to raise rates and lower spot loads when it was a growth industry. Today, the clock is ticking. No next generation -- no growth industry.

Still -- as of today -- radio should tell Anheuser-Busch to shove it (not in those words but in actions). If they miss this chance, they have just allowed the new paradigm -- net four month terms as standard operating procedure.

I've said many times that the radio industry let it all get away.

Stopped innovating in the late 80's. Fumbled through deregulation. You see now what they did with full-blown consolidation. And they let their digital future get away.

But on the issue of Budweiser consumers, radio has every advantage. I suggest radio starts acting like it.

Say no to 120 days.

Take the repercussions if Anheuser-Busch decides not to buy.

Then, as one of my readers pointed out, let Bud see what promotion is like without radio:

• Live without endless luxury suite nights.
• No more countless Bud girl appearances at station events.
• Forget the front row seats to every major rock and country concert.
• You're out the millions of promo spots that were thrown into the package.
• Precious sideline passes -- sorry about your luck.
• Thousands of signage opportunities -- guess they'll go to someone else.
• And dozens of other ideas created by radio people that drive case sales -- you'll miss it.

It won't be long before Bud comes to its senses. After all, where can they get cheap rates (that are cheaper than they need to be) plus so much value-added thrown in?

Who is kidding who? Anheuser-Busch wouldn't pay the NFL four months late for sponsorships. Or Fox for its Super Bowl ads.

Advertisers that want to negotiate hard for the best rates, then agree to them and later demand more discounts to get the deal done are already redefining radio sales. Now, Anheuser-Busch is taking this abuse to another level of absurdity.

They can do it with radio's permission.

Have some balls.

Have some pride in your industry.

Radio still has plenty of beer drinkers and Budweiser needs them.

I fully realize that if one station stands up, another one across the street will steal the business and be happy to take "net 120 days" terms. This doesn't make it right.

But that kind of thing is killing radio.

This Buds not for you.

Two friends -- radio and Budweiser -- can do better.

And friends don't let friends drive their payables to four months.

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