Radio Sales Café

Hello everyone!  Our sales team was included in a conference call yesterday afternoon discussing the idea of programmatic advertising platforms.  Specifically, we focused on the program offered by Jelli, but I believe there are other programmatic advertising platforms available as well.

Within the discussion, it was evident that digital ad buys (websites, social media, etc.) rely heavily on programmatic buys, and now companies like Jelli are trying to bring that technology to radio.  A quick overview of what programmatic buys entails:  buyers can log on platforms like Jelli, see your station's avails, rates, demographics, ratings, etc...and place buys and even insert traffic within your current system. 

All billing, affidavits, runtimes, etc. are processed through Jelli, so the benefit is it potentially eliminates much of the legwork in dealing with agency buyers. My question:  has anyone already implemented programmatic advertising software, and if so, what have your results been? 

Also, if anyone has insight as to how it would work in different markets -- I work for a small market station, where the bulk of our revenue comes from local direct buys.  Would programmatic advertising software boost sales of agency buyers?

Thoughts anyone...

I agree with you a large majority of the time and think you are right on target here.

I don't want to fire darts at this before seeing and hearing everything but I don't see this helping small, unrated markets at all. We tried programmatic buying for about two years to move unsold inventory. Never got a single piece of business. Our stations kept getting dumped into the nearest metro market so it was game over. A friend in the agency business told me that we needed to CONSTANTLY use these words with any agency or corporate buyer - "We are not part of the _______________ metro market."

And a follow-up from RadioINK publisher, Eric Rhoads:

Programmatic Buying and Radio:
Radio's One Shot to Get It Right

A Message from B. Eric Rhoads, Radio Ink

Today radio-industry vendor Marketron announced that it is leveraging its Marketplace automated-scheduling platform to allow for programmatic buying. Programmatic is THE buzz in the media industry, because advertisers want to do exactly what you do when you decide to buy a book on your iPhone at any moment: They want to buy media with a few clicks, on their own time.

Today almost all cable, television, network television, and online companies offer programmatic buying. Advertisers are so enamoured by the convenience and cost savings that some have stated they won't buy media that cannot be bought on a programmatic platform.

Until today, there was no programmatic platform for radio that integrated thousands of stations.

Predictable Resistance

When I speak to radio managers about programmatic, most react with statements like this:

I don't want my selling in the hands of a computer.
Selling requires a human element. Without salespeople, nothing will sell.
This will drive down my prices and turn us into a commodity.
This is just a phase that won't last long.

Radio Is Hard to Buy Now

Radio needs to face the fact that it is hard to buy. Sure, media buyers who want to buy nationally can go through a rep firm like Katz and have a buy made for them. But the research is a killer for many advertisers -- if they decide they want to go deep, how easy is it, really? If Walgreens or CVS is in every town in America, and they want to buy advertising across all of America's rated and unrated markets, it quickly becomes a research nightmare that requires an enormous staff, lots of time and expense, and tremendous difficulty in getting all the current data.

What if agencies or a brand like Walgreens could go online, click the markets they want to buy, create a universal schedule, then click once or twice more and have the schedule bought, documented, and implemented across a system that inserts the inventory across thousands of radio stations?

The Expected Standard Today

Programmatic buying is revolutionary -- for the radio industry. But for other media companies, it is the expected standard. In other media, if you are not easily bought via programmatic buying, you're not on a buy. Period. Radio is already losing lots of revenue it could be getting, especially below the top-rated markets. As soon as programmatic becomes widely available, it will be effectively required for radio to stay competitive.

OMD U.S. Director/National Audio Investment Natalie Swed Stone told Radio Ink this month. "I think radio could get more business. Let's put it that way. Let's call it more, if they had programmatic. We all know that radio is having a moderate-type year. More business is always a good thing. Everybody [in radio] should be getting up to speed."

Controls You Can Exercise

Naysayers are claiming programmatic will turn radio into a commodity, and there is some truth to that. But stations or groups can choose how much inventory they are willing to contribute to programmatic buying. For instance, if 20 percent of your inventory is unsold, you can contribute just that 20 percent and sell the rest through traditional methods. Radio can keep its inventory from being entirely commoditized.

The world of media is changing so rapidly. Consider the recent announcement that Verizon, a wireless and technology company, has purchased AOL. Suddenly Verizon is a media company, reportedly with plans to use AOL to produce new content for its 90 million mobile subscribers -- and the ability to offer media on a national or even local basis. With the data sets they can put together, they'll be able to offer highly targeted ads to mobile users on all kinds of platforms, including AOL locally. (And there will be more acquisitions of media.) Suddenly any local Verizon store could become a place to buy AOL ads.

Radio must be open-minded and not resistant to this. There are loads of reasons managers can find not to do it, but the reality is that you will benefit, and there seems to be little downside.

One System for One Industry as a Whole

Of course, I fully expect bigger companies to respond by saying they will build their own programmatic systems and sell across all their platforms themselves. But just as there really is no need for another major rep firm, is there really a need for three or four or five programmatic platforms? I think not. Why confuse advertisers and make them use five different systems to get exactly the stations they want? Wouldn't it be better if they could open one program and get to every station in the U.S.? Radio as an industry needs to have a single-provider solution in programmatic.

Just as ideally, there would be one streaming provider that aggregates every radio station in the world; the system breaks down when one or more groups opt out. In that environment, iHeart has its own platform, with iHeart properties but not the entire industry, and TuneIn has most of the rest, but without iHeart. It's simply better for the industry to make it easy for listeners (or ad buyers) by having everything in one place. That's why I think the major groups should strongly consider participating in the new Marketron platform.

Radio is missing out on lots of digital revenues, it's missing out on buys because it's not offering programmatic solutions. This announcement by Marketron is a major step in the right direction. Not only does it provide you the opportunity to expand your revenues immediately, it also allows you to have some national revenue eggs in another basket.

This technology is in place today because a company that already had traffic systems in the majority of U.S. radio stations innovated a solution with partner Jelli, which gives them the chance to make it easy to buy any station in the network using programmatic technology.

Playing With the Big Boys & Girls

Though many in our industry will be resistant and others will want to build their own platforms or play catch-up, if you attend any advertiser event today, programmatic is on their lips as the most important innovation in their world. Marketron's announcement allows radio to play with the big boys on a level playing field. It will be immediately embraced (some major advertisers will soon be announced as on board).

I encourage you to embrace this. If it fails you, you can always unwind it. But I think the rewards will be immediate and deep.

Eric Rhoads

Disclaimer: Marketron is an advertiser in Radio Ink. But this is independent thought, not designed to promote an advertiser, and this content has not been paid for. Marketron will demonstrate this technology onstage at the Convergence conference next week.

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Eric writes:

Wouldn't it be better if they could open one program and get to every station in the U.S.? Radio as an industry needs to have a single-provider solution in programmatic.

Because this is so new, Eric suggests it is in radio's interest to grant an instant monopoly to a single programmatic service provider.  (Presumably, as the niche matures, other players would enter the arena. Can't imagine anyone suggesting this would be a good idea if the business in question were an Internet Service Provider, or a program supplier, or a news service. Still, consumers have in effect done this for Microsoft and Google.)

Going to be interesting to see what shape this takes when the dust settles.

Newspapers are now doing this statewide in Alabama now. Radio should create the same model (especially for smaller markets) Would our station be willing to get a buy for a bulk rate price. Heck yeah! If we are not doing the creative, or the orders (and just the billing). Why not? As a small market station, it would give the opportunity to a get a buy that we wouldn't get anyway.

Programmatic Advertising Platforms are not NEW news!

If you remember...Google bought Scott Studios , Dmarc? 2006...

"Internet giant Google announced it was acquiring Newport, CA-based dMarc for $102 million - a deal that actually could top $1.2 billion, if performance targets are met." Then google started selling station remnant inventory, inserting spots in the overnight hours for all sorts of crappy advertisers. In exchange, most stations either got the Scott Studios FREE with support. Along with average unit rates of about $12, I was in Hawaii as the NSM of 5 stations and remember thinking, wow who put an ad on the air for depends undergarments on my CHR station?

The challenge will always be who is on the other side buying the advertising, a marketing person for the brand? What do they know about ratings vs revenue models. What do they know about the demographics or "feeling" of the community.

How many times have you called a MASSIVE agency only to be met in the lobby by your 24 year old media buyer who controls the purse strings, who is beating you up over CPP and Added Value components of your media plan. 

Now with programmatic advertising it takes the person out of the sale. Allows a computer to sell is that OK?

What is your planning with dMarc? Are you looking to create a cross-platform selling system that ties national advertisers into a number of media in order to reach a more targeted audience? 
PK: It's hard to say what Google will look like in the future. We want to give advertisers choice. Google is serious about a democratization of access to information, as well as a democratization of advertising. In the past, it has been challenging for small advertisers to get exposure to a massive radio audience, and for big advertisers to get access to small radio stations. With dMarc's technology, we envision deep integration across our products and theirs. 

IT FAILED and google sold their interest. So same dance, different song.....It might work in the future. I dunno.