Sponsor (July-Sept 1962)

panics, who know their stations and their prospects well. \m\. since RAB lia> laid heavj emphasis on department stores ami radio, lei me tell you a >i<>i\ about an agenc) which recent!) acquired a department store for an account, and which is investing heavil) in radio foi it. lis experiences in radio had been limited to a longtime account for which the pattern in radio had been well established. \s it began to analyze the department store problem and place orders, it was buried tinder an avalanche <>f solicitations from salesmen. l>ut here's the point : The agencj president sa\s thai the onlj two sales approaches employed were ll to attack the competition ihc other radio stations violently, to impugn their programing, their ratings and their management, and 2) to cut prices, with a new on-the-spol package or saturation plan. The agenc) man sav-. sadly, "Can you imagine any other medium selling this wav ? * \nd he goes on to sa\ that it's a pit\ that stations at least don't have some kind ol standard format for rate cards. For a medium as good as radio to he sold onlj in thi> negative wav is distressing. ll utter] denigrates a medium of great power. An agency hilling $15 million in radio recent!) used a special campagin on minor brands in a major food line with spectacular results. It saturation buv for a drug company boosted sales 28' f . It filled radio expertly into a television and newspaper package for a big hard goods manufacturer. When your medium is that powerful, and that flexible, it deserves more thoughtful presentation. Still, most agencies are critical of radio selling. \ Tulsa agenc) notes: "Radio is its own worst enemy. There is still too much back-biting between stations. Nobodv gains from competitive selling of this type/' The agent \ says its use of radio is rising, that it is an "extremelv low cost-per-1000 medium. verv resultful for clients when properly used." \ el it complains of the complicated rate cards, the appalling lack of consistency in presenting rate information, and urges a standard form of card. "Hopefully."" a Chicago agency writes, "this could lead us to the point some day where the radio salesman would quit telling us that his three rating is higher than somebody elses two, but instead that thev are programing toward a certain segment of the audience, with the idea in mind of providing a needed or desired service and that their listeners are of interest to their advertisers because of their type as well as their number."" i Again, the echo of a need for audience research. ) Most media selling is competitive. Radio selling is occasionally savagely competitive. Not long ago a radio representative complained that, in one leading agency, a buyer was so abused by another representative that the buyer took the rather drastic step of recommending to the agency that it henceforth avoid using spot radio. It is very difficult for anyone to gainsay the frequent charge that radio is bought on ratings by agencies who buy most of present national radio. And. as a result, stations program for ratings. 'I et the evidence is that forward-looking agencies are increasingly hopeful that broadcasters will start programing for something else beside ratings, and be able to identify that audience well enough to make it useful for advertisers. SPONSOR 2 jlly 1962 I el me summai ize bi iefl) al this poinl : Radio as a national advertising medium is handicapped 1>\ iwcleai and complex rates. It is handicapped bj too man) stations in main markets, and b) i'"> man) commercials. It needs audience research, because its futun i probabl) in a clearei definition of it progi iminf and the kind of audience it serves. It Belling leaves much to be desired, despite the efforts "I l> W>. and a veteran representative organization. It face some additional problems arising from an obvious trend toward compute! and automation in media programing. Some of these problems are on theil wa) to solution. Some will be corrected as a new generation "I radio man agement, men who know the medium well and under -land both how to serve an audience and run a businesslike operation which doe not depend on expedienc) foi it management philosoph) . In this connection, ma] I poinl oul one more area which broadcasters might investigate with profit? Uone among major advertising media, broadcasting has been reluctant to install a cash discount for prompt payment of bills. Where virtuall) ever) dail) newspaper, and ever) magazine, and 86.2/, of the thousands of business papers grant a cash discount for prompt payment, onl) 213 radio stations — or about 6.3$ — allow it. In Colorado, of the 64 stations operating in May, only 2 grant a cash discount. Let me make clear what a cash discount doe-, from an agency standpoint. The discount is passed along to the advertiser who pays his bills promptly. This mean you gel your money faster, and the agencv gets it mone) faster, and the advertiser has a cash incentive to pay prompt Iv . I he worth of the cash discount i reflected in these figures: in the last 12 years, credit losses of 4A agencies have been $3 million out of more than $27 billion in advertising placed. That's a credit los> rate of one onehundredth of one per cent. Ibis is a verv creditable record, when one considers that for business as a whole during the same period credit losses ran 12 and one-half times greater. We believe the cash discount is largely responsible for this record, a well as enabling media to collect their bills more promptlv . I told you earlier that I grew up on Colorado broad lasting. That part and parcel of my youth are the tall letters KOA. KYZ. KFEL. That I listened as a bo) to the tales of Old Wagon-Tongue, broadcast for Kuner-Kmpson. and that the exploits of Dutch Clark and Powerhouse Pomeroy and Kayo Lam were all brought to me through the magic of radio. Radio is a great communicationmedium. It's a great advertising medium, too simple and cheap to be inventive and creative in; effective in reaching a wide range of households: and powerful and resultful in sales. It can be flexible a few media i an: it can be used with telling effect for testing purposes. It has a proper place in the media mix. and if that renaissance of radio really gets going, you II see more national radio business. Rut if v on want to speed up the renaissance, take a good hard look at clarifying vour rate-, doing audience research and getting the word out about its results, arming your sales representatives with bettei material: seeing if v ou have to have all those commercials; and give that cash discount policy some serious thought. ^ 63