NAB reports (Mar-Dec 1933)

and as a result certain definite plans of operation have been forming themselves. I think the time has come when radio should go on record as to how it wishes to deal with agencies and advertisers. During this period radio stations have been more or less at the mercy of almost anyone who wished to take advantage of the situation. Someone writes us a letter or comes in [to see us to tell us that they control certain accounts and if we will pay them the second 15% we can have the business. In most instances, I think, the claim is without grounds. The person does not control it, does nothing toward selling it and if wc did not deal with him we W'ould get the business anyway provided the advertiser wanted it to come into our territory. Understand, I do not mean by this the better class of socalled brokers or representatives. I think there is no question but that concerns like Scott Howe Bowen have done some most excellent pioneering in the sale of radio time and deserve a world of credit for having done, in many instances, a good job. It seems to me that radio is a coming medium and that a very definite method of handling representation should be established, one which would meet with the approval of the agencies and one which would reflect credit on broadcasting stations and broadcasting. Newspapers and magazines, having been established for many years, have worked the thing out in a manner which seems to be very satisfactory. It may be that a method o'f representation for radio will require something different. I am inclined to think, however, that radio sales can be handled in very much the same way, but the big idea which I would like to have discussed at this time is, “Are we ready to make definite steps toward stabilizing representation?’’ I stated a few moments ago that in my opinion the matter of representation might be handled very much in the manner of newspapers representatives, that is with exclusive repre¬ sentatives. During the past few years we have seen a host of so-called brokers come arid go. Only a very small number of them have been able to survive and those few have, I believe, sur¬ vived largely because no better plan of operation offered itself. I said a few moments ago that something should be done about it for the good of radio. I remember at the Cleveland Convention we had a talk by Mr. John Benson, President of A. A. A. A. in which Mr. Benson definitely went to bat for an exclusive representation idea. As a result of that talk there was formed a group of stations, which on a cooperative basis, employed a representa¬ tive to sell time for them. This was not a success. It ’s failure was not due to the representative because he was a most excellent man. This failure, however, was due, I think, to the fact that the stations themselves could not find a common basis for cooperation. This was a noble experiment, which in failing, set back the representation idea as outlined by Mr. Benson to a certain degree. I do believe that Mr. Benson’s idea is perfectly right and that when radio can have several organizations, each repre¬ senting a group of stations on an exclusive basis, then and then only, will radio sales be handled as they should. Personally, I never was or ever would be satisfied, either on a large station or a small station, in sitting back and waiting for some broker to throw an order in my lap. I want a man representing me who is going out and sell my station against the other fellow’s station and the more the competition the greater the victory. It is obviously impossible for one broker to represent a half dozen stations in Chicago, because in ninety-nine cases out of a hundred the advertiser will only want to buy one of them and the broker cannot do the other five justice. I think this very fact has brought a great deal of doubt to the minds of advertising agents and advertisers, and I believe, that the sooner we correct this situation and encourage the organi¬ zation of representatives who will sell a selected group of stations on an exclusive basis that the sale of radio will go forward in a big way. Then we have the representative who represents the station on an exclusive basis, but does so for a certain fee per month and continues to accept business through brokers. I think this adds too much of a load on the station, for in addition to paying the second 15% the station must also pay the fee asked by the representative. This type of representative does not cooperate frilly* with the broker because if he can he will get the order direct, if not, however, he will take it through the broker. If he succeeds in getting it direct, then he has done a service for the station, if he does not and the order is routed through the broker, he has only half done his job. This type of representative should be either for the broker 100% or he should be against him 100%. The latest development in representation is one which I at least am watching with especial interest, that is, a representative organization functioning on virtually the same basis as the newspaper or magazine representative. I have watched the reaction in the agencies very closely and in nearly every in¬ stance I find that this organization is being welcomed as offering something new and different. I think that the time is at hand when broadcasting stations will be forced to take a stand one way or another on repre¬ sentation. I think we need something very badly in order to stabilize the sale of radio time. I know that it takes more or less nerve for a broadcasting station to step out against the established order and declare himself in favor of something new, but if the new idea is better and better for the business, I think we should do it. There is still another type of representation, which I did not mention while ago and that is the recording company, which makes as a part of its recording agreement, a ruling that the placing of the transcriptions on the station shall be controlled by itself. With this type of organization undoubtedly the time pur¬ chasing consideration is offered as an excuse for making a lower price on the records than would otherwise be possible. Is there any reason in the world why a radio station should be asked to help pay the advertiser’s recording bill. That is exactly what it amounts to and I am of the opinion that this meeting should go on record as being decidedly against any such operation. It in no way compares with buying time on the network because the network organization is set up and is exclusive. Naturally when an advertiser buys the network he expects to get certain stations, but in the ease of the recording broker who endeavors to control the placing of the time, I think we should have no patience. In most instances, particularly on business coming from the larger agencies, the list is all made up and handed to the broker and all he has to do is to issue orders and collect his second 15%, which in all probability reduces the talent bill of the advertiser. Here is something which in my opinion all of us must watch. If we are going to pay a representative a fee of any kind, be it a straight so much per month or a commission, I think we have a perfect right to expect that that representative is going to earn his commission and if we catch him returning part of that commission to the agency, I think he should be eliminated. I do not know of any definite instance where this has been done but I have heard and I know that you gentlemen have all heard of many instances where it has been done. The cutting back of commissions to agencies is only another way of cutting rates, only that in all probability, the adver¬ tiser never hears of the cut back and the agency man sticks it in his pocket. In my opinion this is graft — pure and simple ■ — and I think we should dispense with any representative who will stoop so low as to take the advantage of his competitor or will do the station, which he claims to represent, such an injustice. During the sales discussion up to this point we have, I think, dealt, with problems which affect both large and small stations. I do not think it is at all out of line to disuess somewhat the problems which confront large and small stations as regards the sale of time, but which do not lie along the same path. Two stations, one large and one small, in the City of Cleveland will probably have somewhat the same sales prob¬ lems, but two stations in the city the size of Des Moines, I think, have some very different problems confronting them and it is this, which I think we might profitably spend a few moments on right now. In Des Moines we have a. station of 50,000 watts, WHO and another station of 100 watts, KSO. In Nashville we have one of 50,000 watts operated on a . Page 154 .