Spots and dots represent the single most important revenue engine of the broadcast trade but what if, without notice, transactional revenues precipitously declined?
We must ask such prescient questions.
I'm reminded of that famous speech at the 1975
NARM,
The Day Radio Died delivered by the gifted
Stan Cornyn, then a senior Warner Brothers executive. As it happened, Stan had asked exactly the right question at precisely the wrong time (the record industry, being in high cotton, dismissed his provocative thought experiment).
It's critical that we play ahead.
Here's a practical example deserving discussion: How are we going to optimize political in 2012 and what's our strategy for beating those numbers in 2013 without that cyclical gift? Importantly, what if political allocated to broadcast is reduced or doesn't come back at all in the 2014 midterm or the 2016 federal? Isn't this a perfect time to entertain the notion that an RAB/TvB led task force be established to work these cycles? From K Street to every campaign headquarters, PAC and all of the political consulting firms there are stories to be told, value propositions to evangelize and champion.
On the day job we were criticized some years ago for daring to ask "What if?" Specifically, when the automotive category went south we initiated conversations grounded in the brutal candor of fresh circumstance. We began asking "What if it doesn't come back? What if it does come back and the dollars are shifted, less broadcast and more other including interactive? How then do we compete?" The situation was indeed tragic. Some long established car stores, the majority perennial broadcast clients, closed forever. Time spent in scenario planning paid off. Our clients paced ahead the next two years having developed strategies to replace 60% or more of their local, zone and national auto spend (i.e., dealer, association, factory dollars). Moreover, we developed new strategies and tactics for auto to more effectively employ broadcast and in that process totally reimagined and rebooted the category.
What if your transactional business died? What exactly is your strategy for staying in business? The exercise is important. Rather than wasting time in a hypothetical "losing it all next year" discussion let's first imagine 2012 as the year transactional is off by 12%, your attrition rate doubles, your DSO adds 10 more days and you lose both your top seller and your DOS. What's your plan to deliver your numbers? Ask "What would have to happen?" for us to make our numbers given a set of specific conditions (ninjas of finance call such probabilistic conditions "assumptions"). Using worst-case scenarios can be productive if they are not simply possible but also credible.
We must embrace the simple reality that transactional is, in essence, a commodity business. As such, this segment of media spend is more likely than not to move away from personal selling and into the more efficient realm of machine trading. The strategic issue here is how do we optimize participation in this commodity trading process and at the same time develop a separate sales organization focused on selling solutions rather than numbers? How do we move from responding to an avail to working with clients in a creative collaboration to produce results? We have an urgent need to do both.
Sidebar: During my time with CBS
Mel Karmazin asked me to consider putting
Howard Stern on one of our Dallas stations. Howard was not cleared in the market at the time. One of my first thoughts was "What happens if the airplane goes down?" Experience had taught me that the best time to look for talent was before you needed them. Fast forward. Howard announces he's leaving and suddenly at risk are ratings at a bunch of stations and what has been estimated to be about 100 million in CBS billing. It became clear there had been no serious succession planning prior to Howard's announcement. History records this as a fire drill where people were sent
into the burning buildings.
As the proverb says: The best time to plant a tree was twenty years ago. The second best time is today. Mind the wise counsel of Tom Peters "The trick is in doing something else." Let's get to work.
