NAB reports (Mar-Dec 1933)

rapid that almost over night it sprang from the puny child into a full grown man. On the commercial side, radio desperately fought to meet the mounting costs that were produced by the evolution of the engineering side. All of you gentlemen can turn your minds back not many years and remember the days when we used to lay aside, with silent prayers, valuable pieces of equipment that were not even finger-marked, that however had become obsolete because of a new development from our laboratories. We on the commercial side, seeking to obtain revenue, found ourselves confronted with buyers of advertising who were schooled and learned in the arts of printed medium, who found that the tools of the new art differed greatly from that in which they were trained, and who found a mental resistance to taking hold of these new tools and using them. We found there a mental inertia which increased our effort to somehow balance, if possible, this ever-mounting overhead due to the rapid development of radio with the income that came at that time rather slowly. We dreamed dreams of the day when we might more closely reconcile these two factors. We thought it might be possible at sometime, even to pay a little dividend on the investment, until the halcyon days of 1927-29, when our dreams seemed; to be realized. Under the better business conditions and under the work that had been done by the commercial side of radio, we had brought into this medium some of the best advertisers, some of whom were achieving staggering successes. Some of us also were achieving staggering flops. We ourselves at that time did not understand to the fullest degree the technic of the presentation of commercial advertising. We were learn¬ ing; so was the other fellow. However, the successes far out¬ numbered the failures. But the period of prosperity did not last long enough in our industry for us to build reserves against the days of de¬ pression which overtook us in 1929. Then the stabilizing of rate structures, the standardizing of practices that had been accomplished under this temporary success of ours was thrown into more or less of a chaotic condition. It is here, then, we hear the first mention of merchandising — something in addition to the ordinary, normal function of the radio station. With radio appropriations cut down and in some cases entirely withdrawn, every carrier of advertising had to fight and scramble for his share of the advertising dollar. The radio man that found himself in this condition. Those who had been introduced into the field of radio, those who had high courage and had plunged into what they thought was an unehartered sea — and I say that advisedly because that was and still is the attitude of many of our advertising agencies, again were disposed to withdraw from this medium that required so much of their time and energy, and to go back to the old line mediums with which they were thoroughly schooled and felt perfectly at home. We had that proposition to combat after 1929. It was here, then, that merchandising came in. We as an industry, striving and seeking, fighting to make our medium the most productive, were inclined for its sake and our own to accept the advertisers’ propositions of merchandising. We went into the matter with both feet, up to our knees, and I fear some of us are going over our heads and not knowing it. The question, therefore, seems to be not shall we or shall we not engage in merchandising activities, but rather what c-an we predicate as a properly balanced effort and where shall we draw the line? I can’t definitely answer that question as to where we shall draw the line and what is a proper amount of merchandising to do. I think each member station must decide that for themselves. But I do point out, gentlemen, a few factors, the first of which occurring to me, being that our present structure was set up about the year of our peak. Our rate structures in general were set up in 1928 to 1930 and very definitely these structures did not include extensive and expansive merchandising programs. It is very certain, there¬ fore, that any extra effort put forth behind the normal func¬ tion of broadcasting is one that we are paying for out of our own pockets and for which we are not receiving com¬ mensurate remuneration at the present time. I imagine someone says, “Well, I don’t know about that. I seem to be able to do a whole lot of work in my station without it costing me anything at all.” No. Suppose you can do merchandising with the salesmen . Page you now have on your staff, presuming you can send out your letters by the stenographers that are at present on your staff, in direct ratio to the time you take from your salesmen in productive selling and effort and turn it to merchandising, in just that ratio you are withdrawing from your potential income that which you need for the proper development of your station. In the final analysis if some go to the length they seem disposed to go in this proposition of merchandising, you will have withdrawn from the station’s activities in the promotion and presentation of its program sufficient to have reduced the level of quality of presentation to a point where it is no longer of value to the sponsor of your station. So you have the vicious circle. He gets the merchandising truly, but he lacks the quality of presentation that will make his program a success. Another factor is that the requests for merchandising sup¬ port are becoming more frequent and more expansive. Let me give you an illustration of an inquiry I have received within the past two weeks, an inquiry incidentally with an order for the business: “We desire that you will write to the grocery stores and drug stores in your primary coverage area,” of which there are between 5,000 and 7,000, “that you will make personal calls on the heads of the drug and grocery chains; that you will place window display stickers in the stores; that you will compile a monthly report of the move¬ ment of the merchandise in your territory.” This was asked for with an order for one fifteen-minute program a week. (Laughter) That makes you laugh. I wonder how many of you re¬ ceiving that communication side by side with the signed order would laugh. I fear that some would almost say, “Yes, we will accept it.” I think some have accepted such proposi¬ tions, thus not only encouraging this particular individual to use this against other stations to promote even more, but en¬ couraging five other people who have been watching liis effort to try to do the same thing. That is why I state a definite line must be drawn if we are in this thing, and we are. I think each one of us should very carefully sit down and study what he as a station operator can legitimately and properly offer to a user of his facilities in the way of supporting activities. I do not think it is necessary for us to overstep the borderline of common sense nor do I think the potential buyer expects that you will. I am quite certain the advertising agency that asks for these sup¬ ports is not at all disconcerted when you tell them about one-tenth of what they have asked for jvill be given; they expect that. The viewpoint of the advertising agent will not warrant promoting additional activities on the part of the station which only result in raising the rate structure, which it amounts to. The viewpoint of the advertising agency in his effort to promote for his client all and any supports he can obtain for the legitimate radio function is very well exemplified in a conversation I had just recently with an executive of one of the largest agencies in the world. He was reproaching me for the fact that radio at the present time had not sufficiently stiffened its back, stabilized itself, and did not sufficiently hold to its rate structures. I said, “You find that to be true?” He said, “Absolutely.” I said, “Then I agree that perhaps it is true, and I thinic you and others of your type are distinctly responsible for that condition, for you lose no opportunity of dangling be¬ fore the eyes of the radio operator the piece of business that he desires, and seeking under that to get everything in the world you possibly can outside of the radio function.’ His reply was this, “When we ask you to do those things, we feel we must ask you because some of them are done by some of your stations, and in duty to our clients we must seek to have you perform those functions. If, however, you find you cannot, it doesn’t make much difference to us. We want your facilities anyway and we will use them, and, as .a matter of fact, we would much prefer that you keep a stiff upper lip and tell us exactly what you will do and what you will not do.” So we will be subjected, unquestionably, by the buyers of advertising space to these questionnaires, these urgings, these pleas, this cajoling to do more than is actually a matter of common sense in support of the radio effort. Knowing I was going to talk here today and feeling that 142 .