NAB reports (Mar-Dec 1933)

Record Details:

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vitality. In meeting this challenge the National Association of Broadcasters can be of inestimable assistance. How can the N.A.B. help its member stations in promoting the interests of broadcasting as an advertising medium'? Let’s answer this with another question: On what basis will the new competition between advertising media take place? The answer is: On the basis of facts — facts regarding circula¬ tion; facts regarding the trends in the use of the medium and by whom it is being used; facts as to the success which companies have achieved by using the medium and as to the best way in which it can be employed; facts which will enable the medium itself to check its own progress and which will assist individual units of the medium to match their progress with that of the trade as a whole. The Blue Sky is going out of advertising. I have talked with many agencies and advertisers in recent months, and one thing above all has impressed me — the increasing interest which they are showing in facts — facts of all kinds regarding media, markets and advertising procedure. The first thing which the N.A.B. can do, therefore, is to as¬ sist the industry in the collection and dissemination of the im¬ portant facts regarding broadcast advertising. At the present time broadcasting is the least equipped to furnish the facts which either advertisers or the industry itself requires if it is to shape its policies intelligently. There is not even a reliable figure available as to the total volume of broadcast advertising which takes place in this country! The most basic figure in the whole industry is missing — without which it is impossible to measure its suc¬ cess or failure or counteract misleading statements made by competing media. For instance, a statement by the A.N.P.A. indicates that in 1932 radio, as represented by national net¬ works accounted for 11% of national advertising appropria¬ tions. This made no allowance for the $10-15,000,000 of na¬ tional spot business (exclusive of local advertising) which must have taken place during the year, and which would have brought radio’s share of the national advertising dollar to about 15 % . The latter is better as a success story ! Badio broadcast advertising needs the following facts re¬ garding trends within its industry: 1. As to the total volume of all broadcast advertising 2. As to the volume of national network, regional net¬ work, national spot and local business 3. As to the volume of national spot and local ad¬ vertising respectively, comprised of electrical transcrip¬ tions, live talent, and spot announcements, and in the case of local programs — of records 4. As to the volume of broadcast advertising done by various industrial groups and as to the trend in this field. These are the more fundamental trade statistics which should be available and which are not. Such figures would be of marked assistance in aiding the industry to forecast trends in volume and in the industries using radio advertising. They would be of value in promoting the industry, both in pointing out the degree to which it was being used — therefore inviting others to use it — and in counteracting unfavorable propaganda. They would be of assistance to individual stations in selling clients, in matching their performance with the general aver¬ age and in similar ways. They would be most valuable in long term planning for the industry. Such figures would merely constitute the beginning of a broadcasting statistical service. In both the newspaper and magazine field it is possible to secure detailed information which will enable one to determine the most minute trends as to how these media are being used, by whom, and even in the ease of newspapers, to trace the progress of private brands in their territorial expansion. Badio must build facts equally comprehensive in scope; for even the newspapers and maga¬ zines will have to extend their statistical data in this new era of distribution. The National Association of Broadcasters is the logical agency for the collection and dissemination of these facts. A plan already has been devised, complete in every detail, by which the necessary facts can be secured concerning the vol¬ ume, nature of sponsor, manner of use and similar factors regarding broadcast advertising. The plan is the result of several months of careful research during which advertisers, statistical services, marketing experts, government officials and broadcasters were consulted. Similar activities of other trade associations were studied in detail, with a view of finding the best way to organize the broadcasting service. The plan is now ready for operation and requires only the active coopera¬ tion of broadcasting stations to make it a reality. Time does not permit the presentation of its details in the course of this paper. A second thing which the National Association of Broad¬ casters can do to promote broadcast advertising is to act as a clearing house for all information regarding the medium and its use. There is a great need for the collection and dis¬ semination of the various facts which have already been discovered concerning broadcast advertising and which have not received general circulation among the industry. A good deal of sound research and good promotional material at pres¬ ent is going to waste for this reason. Data regarding listener habits, successful types of programs for particular classes of sponsors or uses, special merchandising plans and similar fea¬ tures are cases to point. Eventually the N.A.B. commercial section should become the central research agency of the industry. This would not neces¬ sarily supplant the work being done by networks and stations. It would merely re-divide the field, with the N.A.B. doing the non-competitive, institutional research; an activity which it could perform more efficiently and cheaply than could any other body. This is not recommended for present action since the expense involved is too great to contemplate at this time. The department which should be set up to collect the trade statistics, however, can immediately fulfill several important functions in addition to its primary one: 1. It can perform the function of a research clearing house suggested previously in this talk. 2. It can begin the work of fundamental research. 3. It can act as an information and consultation bu¬ reau for stations faced with commercial and advertising problems (of a non-competitive nature). 4. It can prepare an annual yearbook on broadcasting, similar to that issued by many trade associations, and which in broadcasting would be similar to that issued by foreign governments. This would have an important role in the public relations activity of the industry. Activities of this type would be logical outgrowths of the function of collecting trade information and would be of marked assistance to the industry as a whole. In the course of my talk I have referred primarily to advertising and promotional problems and the ways to meet them. I have done, so because I am an expert in distribution primarily. There is one other great basic problem which I wish to mention in closing — the problem of standard account¬ ing. This is equal in importance to the collection of adequate trade information and the conducting of fundamental re¬ search. In a way it is even more important. Badio is new. Management and engineering standards are just being evolved. Costs are still nebulous. Actual knowledge of profits is vague. One of the most fundamental pre-requisites of sound man¬ agement, of sound rates and of intelligent policy, is accurate knowledge of costs on the part of individual stations, and the existence of a knowledge of general costs of the industry with which individual efficiency can be compared. I cannot rec¬ ommend too strongly that your association give further study of this problem of standard accounting on the basis of the excellent work already done by your former president Mr. Damm. No more important step toward industrial stability the death of rate-cutting, and the beginning of sound business practice can be taken than this. MB. HETTINGEB: In conclusion I have one word, and that is this: If you are going to get together trade statis¬ tics, it is going to mean a little bit of work for everybody but if everybody doesn’t do the work, you are going to fall down flat from the start. Unless you have a representative group of stations giving you basic information that you can put together, you are not going to get anywhere and you are not going to have anything. So the thing very definitely depends upon station cooperation. Also don’t forget that we are in the “new deal” and that probably if we don’t set up this machinery, we may be asked to do so. If we anticipate it, if we get it worked out, we will be helping ourselves in a way that we need most seriously, and, we may be forestalling . Page 159 .