Gerrymandering Local Radio Sales

By now you’ve heard that national billing has been carrying radio stations of late and the recession has so hurt Main Street businesses that local radio sales as a category is now uncharacteristically down.

That, too.

Turns out we’re forgetting one big thing.

Your friendly local radio consolidator has not only been busying firing (or “laying off” as they prefer to call it) local account execs, they are also gerrymandering local sales to become national.

Listen to this from a longtime sales person in one of the top 50 markets:

“I sell for one of the big 3 Cs … and our commission was cut in March."

Here are a couple of other reasons local radio is down:

“MANY MANY local accounts are now national.

“The NSM often sells lower rates than us so naturally larger regional/local advertisers benefit from the savings. Personal relationships can’t trump the bottom-line in a recession.

“Remember NSMs are salary with only tiny commissions so no argument from the home office. BUT there is no local sales “personality” to become attached to. Kind of like repeater radio for sales”.

In other words, local advertisers don’t get the qualified sales professionals they used to get and whether the home office wants to believe it or not, the message that radio will work for them is not being reinforced where it needs to be -- on the street.

Cumulus, for example, created the position of Key Account Manager (or KAM) that the Dickey brothers used to funnel commissionable accounts from the sales people that earned them to KAMs who are paid a lot less just to manage them.

Manage them doesn’t mean hang out with them, or get to know their businesses or help them to use radio to solve problems. It’s a simple financial workaround that cuts costs at the expense of local sales relationships.

Also at Cumulus (and I am sure at other consolidators), local accounts are being taken back by headquarters so as to avoid paying the local salesperson’s higher commission rate. That is, national does it for less from out of town. Even if you don’t have a problem with Repeater Radio from elsewhere, apparently local businesses do.

So, local accounts going national by assigning them to someone who works at a cheaper rate is one way.

The other is, take back the local business and report it as regional or national.

This could be one of the reasons why local sales is hurting. Of course if you’re satisfied with using the recession as an excuse, go right ahead, but Apple didn’t. They grew their business during every month of the recession.

There is another reason why local sales are down.

Lack of experienced local salespeople.

Cumulus and others are happy to fire professionals for inexperienced sellers who never saw the inside of a radio station because they will work on the cheap. That apparently hasn’t worked well, either, if you’re looking at actual sales results.

One radio seller reminds us:

“It’s tough to recruit new people to a 100% commission gig when there is no gas allowance, no car allowance, no entertainment reimbursement, reduced commissions, long hours and weekend work for no additional compensation, “non-competes” and the same 2 wk vacation standard as the rest of the company”.

I guess what I am saying is that I’m not buying that local radio sales (reported as an industry) is down. There are too many ways consolidators have bent local into regional or national for their own purposes that it makes local look anemic.

How do I know?

Take a look at the mid to smaller radio groups. Their local sales are gangbusters. Some small stations must think they are Apple because they haven’t really had a recession. It’s hard to lose sales when local advertisers feel like part of your station. When they sponsor their favorite personalities year after year – at least in markets where there are still local and live personalities.

At first I bought the local downturn theory, but my readers have suggested this other nuance.

What is local today?

Who gets to define it?

How do we know when it is up or down? The rules are being changed in local sales as well.

So when consolidators predict a little rough spot ahead, they may be correct but when they say the rough spot is soft local sales maybe they should look at soft local sales strategies – theirs.

You can call it national, regional or local but local sales will be just fine as long as you give advertisers something live and local to sponsor and brought to them by people who live where they live.

Outsourcing local sales is and will continue to be a failure. It will leave lots of money on the table for new media local initiatives from non-radio companies.

That is the real problem – not just the recession.

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