Radio advertising that delivers
measurable results and profitable new customers

« Previous | Main | Next »

July 20, 2006

Will CEO Hogan Craft Win-Win for Clear Channel and Radio Advertisers?

The July 19th edition of USA Today featured an article about Clear Channel CEO John Hogan and an assessment of his "Less is More" strategy.

Now, I admit we've been a bit critical of some of Clear Channel's moves recently. Our intent is not to bash them. Rather our intent is to expose things that don't add up. Nothing more.

Two things in this article jump out at us.

The first is Hogan's plan to launch new niche formats. We LOVE this - it's exactly what we've been talking about in our other posts. It will aggregate homogenous audiences that are very efficient to communicate with from the perspective of an advertiser. The content will be more relevant, so the audiences will be more involved, more loyal and more open to the commercial messages. Relevancy - possibly achieved in a much more efficient way than what Google is attempting with dMarc.

The other is Hogan's story about how he decided to reduce commercial air time. Now this is the part that doesn't yet add up for us. What is the "optimal" amount of advertising time? Obviously some amount is too much no matter what. But optimal is not arrived at absent other variables - like how compelling the content surrounding the commercials are, or how the non-commercial content interacts with or relates to the commercial content.

Determining what "compelling" content is - that's fundamentally a question of psychology, isn't it? Radio is a form of entertainment for people. What role does entertainment play in people's lives? For some it is in seeking joy, fun, sense pleasure. For others it is an avoidance or escape in a sea of other displeasures or less-fun activities (like driving in traffic, or working). Meeting these needs in multiple ways - and more importantly in surprising ways - is what makes content compelling, and worth sitting through commercials for.

The article doesn't spell it out this way, but our hope is that what Hogan is doing is attacking the problem from two sides - reducing the commercial air time initially while dialing in on more compelling content through both innovation in content as well as more niche formats (because clearly you can no longer "mass market" compelling content). Then at some point, Clear Channel's advantage will be that it can sell more air time per hour for higher rates because it has the best content. It would be a win-win for Clear Channel as well as it's advertisers - and all because it remained focused on what business it is really in.

Posted by Jeff Small & Brett Astor at 05:43 PM | Permalink