Industry Awaits Clutter Verdict - Radio World

Industry Awaits Clutter Verdict

Observers Debate Value of 30-Second Spots, Seen by Some as Mere 'PowerPoint Radio'
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Observers Debate Value of 30-Second Spots, Seen by Some as Mere 'PowerPoint Radio'

Terrestrial radio's future in an era of new media competition hinges as much on what it doesn't air, as on what it does.

So holds the gospel according to Clear Channel, as the rest of the industry watches, with mixed emotions, waiting for any telltale sign that the radio behemoth knows what it's doing by turning its back on 60-second ads.

A policy of shorter ad spots and promos - and fewer, too - on its more than 1,200 stations is at the heart of Clear Channel's "Less Is More" anti-clutter campaign, which phased in at some stations a bit earlier than originally planned, in mid-December.

A second, less-publicized aspect of the project is an attempt to raise the creative quality of 30-second spots to increase their effectiveness; the company named a Creative Services Group of consultants last fall to help the cause.

'Take-it-or-leave-it'

Clear Channel "remains steadfast in its conviction to do this with a take-it-or-leave-it attitude as their position," according to ad buyer Mark Lefkowitz of Furman Roth Advertising in New York.

"The creative community is particularly disappointed and will find it very hard to achieve the goals of Clear Channel's objective. Being able to use a :30 over a :60 while trying to maintain a commercial spot's effectiveness is still very much in question. In fact, the value of using mostly 30-second ads is questionable at best."

Although all things are negotiable, some buyers have said Clear Channel would like to charge up to 75 percent as much for a 30-second spot as it did for a :60, to help maintain its revenue base - especially since the idea is to run fewer total minutes, overall, per hour. Lefkowitz thinks that strategy makes sense: "If they only charge half the rate for a :30 as for a :60, that would upset the apple cart."

But he argues that advertising's top priority is not simply to save money on ad buys, but to produce and air the most effective spots possible for products and services. And most advertisers, he contends, think the more persuasive messages come in full-minute spots.

"I think other (radio group) companies are going to watch and see what happens here, and let Clear Channel find out on their own how things work out. Other companies will 'go to school' on Clear Channel," he said.

"We all know it's a very transparent industry, and whatever happens will be known rather quickly. They're the big fish in the sea and so they're getting some help from others, from the RAB with things like a new award category just 30-second ads, as well as from other industry groups. So we'll see what happens."

Impact on Automotive

Clear Channel in San Antonio and its PR firm in New York did not respond to numerous inquiries from Radio World regarding the implementation of the anti-clutter campaign. In mid-December, the company was providing approximately 40 links to various corporate services, announcements and charitable projects on its Web site Home Page. No central Home Page link or headline referred to its Less Is More project.

Originally, the general anti-clutter message going out to stations was to cut the typical 12 minutes per-hour (on FM outlets) by a quarter to a third, and axing maybe a quarter of up to 16 minutes on AM talkers during rush-hour dayparts. Stations contacted declined to disclose their ad changes, if any.

Lefkowitz predicts the group owner probably will start adjusting its goals by the second quarter of 2005. "They won't do away with it completely, but they could find they have to do some adjusting. Because I'll tell you that pushing 30-second spots will make the highly important automotive sector run from radio - not run to it!"

Rob Riggsbee, owner of Inside Media Inc. of Cincinnati, agrees. His firm buys time for more than a dozen radio clients.

"We have to remember that Automotive often has to put disclaimers in their spots, and that could easily take up to 15 seconds, half a shorter spot. My clients prefer 60 seconds and so do we."

While Riggsbee thinks less clutter makes sense for both advertisers and listeners, he said the solution lies in reducing the number of overall minutes per-hour, not merely cutting a lot of :60s down to :30s.

"I'm not for cutting clutter at the cost of driving up pricing beyond maybe a reasonable 4 or 5 percent. I think where Clear Channel may be having their most success in converting :60s into :30s is with their direct clients," Riggsbee told Radio World.

"And that's maybe because their direct clients don't know any better."

'Doing something'

Some financial observers have praised the conversion to half-minutes. And while some ad buyers derisively refer to 30-second ads as "PowerPoint Radio" because they allegedly only allow enough time to provide a few "bullet points," not all broadcasters oppose it.

At a New York industry meeting in December, Cumulus and Katz Media reportedly indicated at least some interest in shorter ads among advertisers, and in the potential financial gains of selling two ads for every 60-second window of opportunity. Other groups seem to be taking a wait-and-see attitude.

Mark Fratrik, vice president of BIA Financial Network in Chantilly, Va., credits Clear Channel for its anti-clutter initiative, regardless of its eventual outcome.

"At least it's attempting to do something about increased (new media) competition," said the broadcast properties analyst. "I think it's important to have a major effort by a leading group like Clear Channel to try to solve a problem that they recognize as significant. There is an amazing amount of clutter out there."

Fratrik believes local commercial radio faces "tremendous challenges" in retaining its audiences over the next few years, especially younger listeners, who appear to be migrating rapidly to commercial-free MP3, CD and game players, and gradually, as their incomes rise, to satellite radio - especially with portable albeit, expensive satellite radios beginning to enter the market.

"It's also a matter of changing industry habits as far as advertisers go," Fratrik said. "These guys have been used to producing and selling 60-second ads for a very long time now."

Fratrik said the value of local broadcast properties "remain decent," but because of huge large-market consolidations over the past several years, there are not a lot of major properties for sale at any given time and value fluctuations, if any, can be hard to gauge.

"I think (traditional) radio is still a very viable medium," Fratrik said. "It still pumps out decent cash flow, and I'm predicting radio revenue will increase 4.3 percent in 2005. That's slower than our overall growth nationally, and it's slow even for the radio industry itself over the years. But it is growth."

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