The Netflix/Pandora/HBO Effect on Radio Twelve Things You Should Do About Commercials

By Alan Burns

We already know listeners don’t love commercials, right? If we needed any fresh reinforcement, the latest “What Women Want” study by Alan Burns and Associates and Strategic Solutions Research, which will be presented at Canadian Music Week, shows that one of the most important drivers of Pandora and Spotify usage is “too many commercials on the radio.”

I think it’s going to get worse.

Here’s why: Have you ever turned to “regular” TV after watching a lot of Netflix or HBO? When you do that, immediately the commercial load on traditional non-subscription TV feels unbearable. You’re now more sensitive to commercials on television – especially on cable, where loads are even higher than on broadcast prime time.

In the audio world the same thing happens with streaming music (low/no commercials) and satellite radio (no commercials on most music channels) as well. Over time, the ability to get audio and video content with few or no commercials will, I believe, make commercials on radio and television even less appealing than they are now.

This will clearly be a bad development for radio since, in any transaction, consumption (listening) tends to decrease as cost (commercial load or quality) increases. Not only can it affect ratings, but sales can take a big (perhaps even larger) hit as the result of fewer people paying less attention to client messages.

Fortunately, there are quite a few things owners, management, sales, and programming can do to reduce commercial irritation without decreasing revenue. In fact, several of these actions will actually increase the value of our commercial time and thus should improve revenue.

My recommendations range from difficult, long-term efforts to easy and quick changes. Here are a dozen things you or your organization could do:

1. Improve radio sales. Radio is extraordinarily powerful at moving people and getting them to buy things; there is more than ample proof of that in research, including case studies. But too many radio sellers sell by talking about what’s wrong with other stations in their market and how cheap radio is, instead of leading with power. We need fewer rate wars and more value selling. Over time, that would lead to higher rates.
2. Be aggressive about developing other revenue streams such as digital and events. That’s where the growth is, and increasing revenue in those directions can make it easier to hold the line on spot rates and turning down bad advertising.
3. Support NextRadio. It’s another revenue avenue, and in the long run it can enable great feedback about good and bad, effective versus ineffective commercials (see item 10 below).
4. Improve the relevance of commercials. Other than bad copy and screaming voiceovers, the biggest commercial negative is information that is irrelevant, even alien, to the listener. Think hemorrhoid remedies and wrinkle creams on a Top 40 station. Irrelevant messages are a waste of the clients’ money, which is bad for everyone in the long run.
5. Increase the effectiveness of the commercials you and agencies produce (you can help agencies by giving them free seminars on what makes a powerful radio commercial). When commercials are more effective, listeners pay more attention and the client realizes greater value. Greater value leads to higher rates. Here are several things researcher Mark Ramsey has found to increase effectiveness:

• Relevance
• Humour
• Message clarity
• Surprise
• Storytelling                                                           

You can read more about Mark’s study here.

6.  Make the commercial fit the content. News/talk and sports stations can carry more spots because the commercial audio, which is mostly talk, fits the surrounding content. Making the commercials more like the content is a challenge for music stations, but make your spots as musical as possible. Encourage clients who have jingles to put the jingle right up front. Teach your sales staff or copywriters to put fewer words in your spots, leaving time for music to establish first. For inspiration, ask the old-timers about the days when Coke, Pepsi, and many other advertisers ran spots that were mostly sung (one Coke jingle actually became a hit song in the late 60s).

7. Incentivize really good commercials. Offer prizes or bonuses for great in-house copywriting and production. Have your own annual awards for best local agency and best in-house commercials. Consider a rate structure with discounts for musical spots.
8. Hire good writers and producers. As Emmis’ Rick Cummings says, “We used to have master chefs preparing our spots …lately it’s more like short-order cooks slingin’ them out as fast as they can.”
9. Outsource commercial production. If your staff is too small, inexperienced, or overloaded, farm out production to folks who can do it better.
10. Offer your clients commercial testing. This is a fairly new concept at the station level, but WBEB in Philadelphia is doing it and claims it’s making their spots more effective, their clients happier (even though they’re paying higher rates!), and reducing perceived clutter on the station.
11. Structure your stopsets better. I believe in putting the best or most musical spot first, and the next-best last. People notice first and last items most, so this is a way of hiding the worst spots and rewarding the best.
12. Finally, get into those stopsets fast. Try this for a couple of days: format your station so that nothing longer than 10 seconds happens before a stopset. You’ll notice the stopsets feel like less of an interruption.

One idea that’s often talked about is playing fewer commercials per stopset by stopping more often to play commercials. I’m not optimistic that will work in the long run. In the U.S., research by the National Football League has shown that television viewers notice how often commercial breaks occur more than they notice how long they are, and have extracted commitments from their TV partners to reduce the number of breaks. In Australia, NOVA-FM executed a very successful Top 40 launch with a promise of “never more than two commercials in a row” with four stopsets per hour. In the long run, though, they reverted to fewer, longer breaks.

No one person at a radio station can execute every one of the dozen suggestions above – it takes management/ownership, sales, and programming commitment to do it all.  Take whatever actions you can, and encourage others in the operation to consider those you can’t do alone. Collectively we can lower radio’s “cost” to the audience – while increasing its value to our advertisers.

I’d love your comments and feedback via alan@burnsradio.com. If you’re attending Canadian Music Week, join us Wednesday morning for “What Women Want” to find out what 2,000 women had to say about radio, music, and new media.

Alan Burns is the Founder of Alan Burns and Associates, which has provided consulting to hundreds of AC, CHR and Gold AC radio station clients in the U.S., Canada, Europe, Australia, and Asia since 1985.