There’s a longstanding tradition in radio of being somewhat protective and private about how we price our advertising products. Sure, virtually every station has a rate card. But, we all know that the actual rates the station gets vary wildly and many of those rate cards are what I call ‘rubber rate cards’ because they’re incredibly flexible. Plus, some sales managers shy away from using rate cards all-together, unless they’re pressed, because they say ‘When you show someone a rate card they’ll always just point to the lowest rate and say give me that.’
My fear is that this practice of being coy with our pricing doesn’t work well with an ever-growing portion of ad buyers who are used to buying digital products with more cut and dry rates. I certainly understand the rationale of being flexible with pricing to fit people’s budgets so we’re not walking away from money. Hopefully if we’re doing that though, there’s some rhyme or reason to it so two different advertisers aren’t paying vastly different rates for the same exact :30 spot positioned at similar places within stopsets. Maybe I’m more sensitive to it because I started in smaller markets where word travels very quickly, but even in larger markets I’ve worked in people talk. We’ve all probably experienced two car dealers discussing what they pay for advertising and coming back to the station saying ‘Give me the deal they got.’
A couple times in recent years I’ve spoken with business owners in various markets that tell me similar stories. Basically, it goes like this. I was interested in doing some radio advertising to promote my business, but I didn’t know where to start. So, I went to STATION X’s website but found little information there on how to advertise or what it costs but I saw an email to contact/number to call. I contacted them, then I got a call back, I asked how much an ad costs, they asked to set up a meeting. A few days later we met, they asked me a lot of questions about my business which was great along with my budget but by the time they left I still didn’t know what an ad cost. A week later they returned with a proposal and by then I’d already spent my entire advertising budget elsewhere. It’s hard to quantify how often this situation occurs, but I would bet quite often.
I’m not arguing against doing needs assessments so we can present potential advertisers with custom proposals that will better fit their business and get them more results then a pre-built, pre-determined package. What I’m suggesting is a more transparent process for how we price all of our assets. Then maybe simplifying our rate cards a bit so they’re easier for new advertisers to understand, and so their rooted in reality rather than fantasy or ‘because that’s how it’s always done.’ I can’t articulate how many stations I’ve seen that charge more for morning drive even though it isn’t their highest rated daypart anymore. People will say either A) “Well that’s the industry standard” or B) “People want to be in morning drive so they’ll pay more.” We can’t continue pricing things a certain way simply because that’s how we’ve always done it and we certainly can’t charge more for underperforming dayparts simply because the advertiser assumes more people are tuning in at that time.
When someone asks us 'Why does an ad cost that?' We should be able to say 'Because it's worth that' and back it up by adding 'It's all about impressions, the average amount of ears hearing your ad/mention or the amount of eyeballs seeing your digital ad/content.' On the on-air side obviously that's a lot easier to do for stations that subscribe to Nielsen/Arbitron or Eastlan. But, even non-subscribing stations can do strategic promotions built specifically to create they're own audience estimates so they have something to back up they're on air rates. On the digital side it's easy because all of that is tracked exactly rather than a guesstimate based on a relatively small sample size.
I know this is a touchy subject, but I’d love to hear your thoughts even if you vehemently disagree with me. Comment below or email me at Andy@radiostationconsultant.com.
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