NAB reports (Mar-Dec 1933)

cleared channel and one of 5,000 watts operating on a regional channel. This does, it seems to me, present two very different sales problems. The local retail advertiser with a very limited trade territory, in all probability, cannot afford to buy the superpower cleared channel station at its card rate. If he could afford lo buy it he would have so much waste coverage that he would probably feel that the rate was far too high. On the other hand, the national advertiser who has distribu¬ tion over a large area can use all the coverage he can got and needs far more coverage than the small station can deliver. Why would it not be the ideal situation for the small station to concentrate on local business and the largo station leave it alone? In return for this, why shouldn’t the small station stay away from the national field — go after local business tooth and toenail. In Nashville we make no attempt whatever to sell local retail accounts. There are twelve or fifteen concerns with distribution over the South and in two instances with national distribution and we are concentrating our entire sales efforts on those concerns as far as Nashville is concerned. I stated earlier this afternoon that we have only one rate and that rate applies to everyone. Certainly the concern with distribution in the South or over the nation is no more en¬ titled to a lower rate than if he was located in New York instead of Nashville. That is the basis on which we operate. There is so great a difference in our rate and the rate of the other station that we could not go after retail business with any degree of success because in most instances the other station can do a mighty good job for the retail advertiser and, we believe the business belongs to him. By the same token we can do a much better job for a national advertiser and quite naturally we are looking for¬ ward to receiving the bulk of the national business for our own station. In this sense we do not feel that we are in competition with the small station and I do not believe that there should be any place along the line at which WHO and KSO should be competitors. Now if you take Cleveland as an example. The purchase of any Cleveland station, be it John Patt’s or TAM or WHK, is undoubtedly made for the primary market and it is per¬ fectly legitimate for any of the stations to go after the business because any one of them can take care of it, no doubt. There is no opportunity for the large station to have a rate which will compare with the smaller station in the smaller cities because the 50,000 watt station must maintain at all times a high class program using real live talent and paying good money for it. The difference in the cost of tubes is enor¬ mous. In fact, everything that goes into the operation of the 50 Kw. job means a higher rate. So there is no way in which two stations can meet on a price basis. This is all right, how¬ ever, because as I said before the difference in coverage more than offsets the difference in rate. ME. POX: I am going to bring this to a close with one specification. I think it would be very ungentlemanly on my part and very unkind on Mr. Carpenter’s part if we didn’t ask for a word from a very good personal friend of mine who is with us today, and possibly he has something he wants to say. I am going to ask Norman Craig, of Scott Howe Bowen, to speak to us. (Applause) ME. NOEMAN GBAIG : We have had lately some new ideas on this question of representation. It seems to us that it is fundamental and absolutely necessary for the stations themselves to determine as strictly as they can just what kind or type, if you please, of representation they want. Our experience in the sale of spot broadcasting is simple. In starting four or five years ago, we found that the way radio advertising was being sold — and at that time, in New York at least, it was practically all network — was by the development of program ideas, plans, methods to make use of the time being bought. The networks have a big spread between the amount of money they take in from advertisers and the amount of money that they pay the station, which is ample to finance the necessary operations in connection with developing plans and ideas, and so on. We are told that Columbia and N. B. C. average 27 audi¬ tions given to different prospects to make one sale. That costs them a lot in time and money. We don’t know, speaking for ourselves, any other way to promote and develop, increase the sale of spot broadcasting other than to do it in just that same way. In other words, it is necessary to provide — it is suggested a national adver¬ tiser can get more per dollar than he has to out of spot broadcasting than on network, but in addition to telling him that, you have got to tell him how to use it, make the sug¬ gestion, and in nearly every case bring a program to him. Doing that costs money. There was a report in Broadcasting a couple or three weeks ago, June 1, I guess, of ten agencies in the country placing the largest volume of network advertising. With the excep¬ tion of two or three on that list, they were very prominent large agencies and they placed the first four months of this year something over $5,000,000 worth of network time. If you gentlemen saw that list and checked back on it as to how much spot business you got from those agencies, you found that with two exceptions, it was practically nothing. Some¬ body must promote spot broadcasting, make more spot broad¬ casting, make more accounts in order to have its proper de¬ velopment, not the type of representation that consists of going to an agency and an advertiser, saying, “We understand you are going to have a spot campaign. Now be sure and buy of our station. It is a good station. The other station is rotten,” or “the other two or three are rotten,” whatever it may be. That doesn’t create anything new. It is like a bunch of dogs quarreling and fighting over a bone that now exists and is laying there before them. It doesn’t create any new bones. If you want new bones created, if you want more spot campaigns, it is a matter of cultiva¬ tion. The average account we sell takes anywhere from four to six months of cultivation work, building up work before it comes down to a question of placing any station time. If it were the will of the station owners and operators that the representation of stations be identical with the representa¬ tion of newspapers by several groups of representatives, each representing exclusively a few stations, the compensation that these representatives will receive, even though it includes all of the business placed, whether placed by their own creative efforts or otherwise, doesn’t give them enough income to warwant their doing this upbuilding work, creative work, if you please, that makes for new spot broadcasting accounts. In that event, if you adopted such an idea of exclusive representation of a number of groups, none of them could afford to do this constructive work. If no one does it, if it is left entirely to the advertising agencies, your spot broad¬ casting is going to go hang. There isn’t any interest being shown on the part of the larger four-A agencies in spot broadcasting. I could tell you of one in particular, I could make it two very large agencies in New York that resent very much having a representative go directly to their clients and talk spot broadcasting. And yet one of those agencies is doing a fairly good volume of spot broadcasting today, simply because some representative went to some of their accounts and sold them the idea against the opposition of that particular agency. If it costs an agency considerably more money to handle a spot account than it does a network account, I don’t think that is the only governing factor. It is very simple and easy for them to deal with one representative, if you please, and place their schedules on from ten to one hundred stations, or seventy-five, get one bill for it, check it and__pay it, rather than to deal with a lot of indifferent individuals, get a lot of bills in, pay a lot of different cheeks, cheek them up and watch them, and all that sort of thing. There is the element of their copy, and in a spot campaign the flexibility enables an advertiser, if he has a line of prod¬ ucts, to talk commercially about one particular product in Dallas, another one in St. Paul, another one in Kansas City, but that takes a lot of work and time on the part of the advertising agency in making up separate copy, particularly if it is a daily script, or five times a week. It means quite a job. Yet it is being done and being done successfully and it is to the advertiser’s interest. I started to say a while ago that our effort is to try to prove to the spot broadcasters that they can get more money per hour out of the spot effort than out of a network cam¬ paign, and if you can’t prove that, there is not going to be any spot broadcasting developed. As a matter of fact, both . Pagg 155 .