This is the second part of our SoCast Radio Show 2015 Highlights series. Previously we spoke about the upcoming programmatic buying and automation trends affecting broadcasters. In this article we will be talking about generating new revenue streams for several digital personas in the broadcast landscape.
To view part one of this series, please click on the link here.
New Revenue Streams for the Digitally Adverse, Ninjas, and Players in Radio
There are new revenue streams for broadcasters who are both digitally-adventurous, and digitally-adverse alike; it all depends on your appetite. There a few things broadcasters are all too painfully aware of; traditional revenues for broadcasters are flat while digital revenues continue to grow rapidly year over year. Since broadcast revenues are flat broadcasters are looking for new ways to generate revenue. Digital represents the greatest growth opportunity for radio.
New Revenue Streams for the "Digitally Adverse"
As evidenced by the high turnout for panels that even mentioned digital revenue, it was clear that delegates were not only open to the idea, but actively searching for ways to generate real results for themselves. Then there were the many who simply dismissed the idea for all the same reasons that we've said and heard before. I affectionately call these guys the Digitally Adverse.
- "It's a huge cost and learning curve and nobody I know is making much more than 1 - 2% of their revenue from digital."
- "It's a distraction, I'm making real revenue gains doing traditional broadcasting tactics and focusing on anything like this will only take us off point."
- "It's an expensive investment, and the ROI isn't immediately attainable even if we could figure out how to do it."
There are answers to these concerns in the paragraphs below, but first let's talk about a quick way that these guys can get their toe in the water without giving up an ounce of broadcasting focus. You know that on-air remnant inventory you're selling off cheap? You can do the same with your website inventory. You get (initially small) checks every month, but you're in the game. And if you ever decide to step up your game into more advanced ads (programmatic advertising for radio, video pre-rolls, etc.) you'll already have the infrastructure.
"Digital Ninjas": The "Local Digital Agency" Route
This trend is about Radio looking into being better advertising enablers for their clients. The spectrum ranges from focusing more on packaging existing digital properties into integrated ads to becoming a full service “Digital Agency” for local clients. It all comes down to your DNA and constitution for branching out into previously unchartered waters. If you've come from outside of broadcasting, and you believe the future of radio is to go from selling 0:30s to complete local advertising services, then this might be the option for you. With local businesses now increasing spending on digital, social, and other non-traditional means, Radio just might be that trusted source that can be that one stop shop for their local clients.
To do this you'll need tools to provide services (website, email database, social, promo, etc.) as well as trained staff to sell and execute on. The client services model is different from selling 0:30s too, as an agency provides various levels of hand-holding to spoon-feeding to keep their clients constantly changing wishes at bay. I heard the same comment more than once from griping salespeople: “clients tell me, I can give you all my business, just build me a website.” Website building/management platforms with design capabilities are here to help you, but how many of them are integrated with email, social, promo etc.? And can mobile apps be far behind?
For broadcaster DNA roots based organizations, I would recommend against this option, as it is removed from the core of what Radio is, and the further away from your core, the greater the risk of failure.
Digital ad plays for "Digital Players"
Cultivating a new revenue stream closer to home is what interests most Radio companies. These solutions don't require a lot of innovation, but more so a commitment to building, publishing and driving audiences to digital content. One such example was based on serving audiences podcasts and repurposed audio content with ads all around it. That's core to Radio, and it requires zero effort to generate content for, it's already been done.
Feeling a little more adventurous? Premium and pre-roll video ad units have far higher CPMs than lowly remnant, or even run of site banner ads (now at risk of being ad blocked by free consumer software!) These options require investments into digital publishing and video platforms to handle these newer ad units, but that's where the real money is today, and if you want a piece of that skyrocketing diagonal line of digital revenue, you have to pay to play.
Enjoying these highlights? Stay tuned for our third article of this series next week. Leave us a comment if you have any opinions on the topics discussed!
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