Advertising at The Zoo

I gave a little information a couple of weeks ago about how important advertising is to a radio station. I felt like I had just barely scratched the surface about the situation surrounding KZZO-FM in Clovis, NM. One thing I didn't mention before is how difficult it is to sell radio advertising. I mean, you're basically selling something that doesn't exist. If you buy advertising in a magazine or newspaper, it remains there in one place for all eternity as long as someone keeps the publication. With Internet advertising, you can force someone doing a little browsing to see your ad by paying more money for this feature. If you buy television advertising, you can at least see how you are being presented on the screen, and if you're lucky, someone is recording the program you're slotted on and will see the ad at a later time.

With radio on the other hand, advertisements are vitually intangible. Someone has to be listening at the exact time your ad happens to be on the air AND they have to be paying attention to what's on the radio in order for it to have any kind of lasting impact. Yes, your salesperson can provide you with an audiotape or an mp3 of the finished product, but almost no one records radio and listens to it later. And if they do, they generally know how to blast through all the ads on fast-forward. (When you fast-forward TV shows, you at least glimpse the ads.)

In a large market, radio advertising can be very effective because of the amount of people who listen while driving in their cars every day. In very large cities, people tend to listen to the same radio station every day and if your ad comes on around the same time during rush hour, listeners will be more likely to hear it. After all, they can't get up and go to the refrigerator in the car when a commercial comes on. They also have a tendency to be listening for more than a half hour going to and leaving work.

In a small market, most people can get from one place to another in five to ten minutes. That doesn't leave a lot of room to make a lasting impression. In the Clovis/Portales area, there were probably a lot more people who had to drive from one town to the other on a daily basis, but the trip only takes about 20 minutes each way. That's still not a lot of time to get through to listeners, especially considering that about 75% of that time will be taken up by the music programming, which is why most people are listening to the radio in the first place.

The amount of time people spend listening to the radio was just a small part of why it was so hard to sell advertising at KZZO. The real issue was that in the Clovis/Portales area, there were 10 radio stations competing for the small amount of available advertising dollars, and that didn't include the two ENMU campus radio stations (although they actually did manage to sell some advertising on the AM station my junior year).

Jid had done some extensive research before buying K108FM. He found that the main FM pop music station, KTQM, was automated and run by a couple of owners who actually had homes in the station's backyard. He also found that the next most popular FM station, KCLV, played Country/Western music and was operated by the largest independent convenience store chain in New Mexico (Allsup's). KCLV didn't really need advertising because the profits from the chain kept them on the air. Jid did not consider these stations major competitors for the kind of programming he was going to launch. He thought it was the perfect market to base an empire.

There were a few things that the research didn't tell him. The area did not just include those people who lived in Clovis and Portales. There were dozens of farming communities in which the residents listened more to Country/Western. For the parts outside the range of our signal, they were still able to listen to KWKA-AM. Another thing he likely didn't know was that one of the owners of KTQM and KWKA was the President of the local Chamber of Commerce. This meant he had deep ties with the business community. Another was that the local business owners were concerned over each nickel and dime. Jid said that in trying to negotiate an advertising contract with a client, that person was excited that he was able to get the rate down an extra five cents per spot.

None of this would have been an issue if the first Arbitron ratings had come out to our advantage. That was another thing his research didn't tell him. He was aware that the rating periods for the smaller markets were infrequent. (In a large market, they run them every three months.) When that first faulty report came out, he remained optimistic: "Well, we'll do better next year." But he was then informed that Arbitron only did the ratings once every TWO years. He needed us to win the ratings so we could set the ad rates at a higher premium. This was important for national advertisers. They would always go to the highest-rated station first, pay whatever they're charging and consider ones with lower ad rates next. He was probably prepared to wait another year for a positive outcome on the report, but I don't think he counted on having to suffer through two years of uncertainty. (And for what it's worth, I never found out about the Arbitron ratings two years later, even though I was still there. I have a feeling they decided to wait an extra year before they did ratings again. By that time, we were already on our last legs.)

December was THE month for advertising sales. We easily made enough money that month to carry us for at least the first four months of the year. I remember my second December at the station in 1985. We were running a full load of ads 24 hours a day. It was exciting and it made the shifts go by a whole lot faster. We did so well that year, it probably carried us for six months. I know we didn't do quite as well for December of 1986, but we still had a pretty good season. We were expecting another big Christmas for 1987, but the sales chart showed that our final sales for December were worse than they were for November. WHAT?

So, what happened? We found out that KTQM/KWKA held a "sales seminar" a few months earlier. All the local businesses were invited to a free lunch. This "seminar" was actually a sales presentation by a company that sold jingles for commercial advertisements. They must have had a great pitch, because all these businesses, most of whom we had trouble just getting $100 orders from, slapped down $5,000 apiece to have jingles composed and recorded for them.

For those who may have a hard time grasping the concept of economics, this is a great example of how it works in the local economy. These businesses all had at least $5,000 each in their advertising budgets for the Christmas season. They would normally spend that money on the local radio and TV stations. If there were 20 businesses that bought the jingle packages, that meant that $100,000 worth of local money flowed out of the area. This was money that was supposed to support the local media. Without that money, staff can't get paid. The stations have to resort to borrowing money from the bank to cover paychecks until they produce more ad sales, which was now even more difficult to produce.

We theorized they they had put something in the food to make those companies a little more receptive to the presentation. On the bright side, those businesses had so little money left over for advertising, they weren't able to buy air time on KTQM, either. KTQM basically shot themselves in the foot by allowing the company to come into town and haul off with all the advertising money. I also have a feeling that the pitch included charts that showed how businesses who used their product got a rapid return of investment. The business owners were likely duped into thinking they would see their sales skyrocket and they would use those returns to buy more advertising at Christmastime. (Or not. They could just keep it for themselves.)

That aside, the key to selling advertising is the salesperson itself. It takes a special kind of person who can sell something that only exists in the moment. Some people are very good at it and make a lot of money from the commissions. It seemed like out of every ten people we hired for the sales staff at KZZO, only one would stay on after three months. In addition, new sales people would be told they would get fired if they were not able to close more after their first two months. This put a large amount of stress on them during their third month. And when you're stressed out like that, you're not going to perform well.

We had one new member who would go see potential clients and just stand there without saying anything. I don't know what made that person think they could make a living at sales. We had another woman who was actually doing pretty well, but it turned out she offered to have sex with the clients if they bought from her. She wasn't all that attractive, so it was surprising that anyone took her up on the offer.

As challenging as it is to sell advertising, it was probably even more difficult to collect on past due invoices, which was also the responsibility of the salespeople. One of the rules we had was that new advertisers had to pay upfront on their contracts. But after that, we would run the ads on credit. Once we've run the spots, that's it. They owe us money. But if they didn't pay us, there wasn't anything we could do, except not run ads for them anymore.

During one of our down months, I came in every day to the station. Every time I came in, the ENTIRE sales staff would be there sitting at their desks. If there was one thing I knew about ad sales, it was that everyone was supposed to be out hitting the streets to either drum up business or perform collections. I guess they were all waiting for people to return their calls. As a result, my paycheck bounced the next month. (And that wasn't the first time that happened.)

Years later, I started working for a newsradio station in San Jose. It was exciting to see such a large sales staff and that so many of them had been at their jobs for years. I remember one salesperson landed a $50,000 ad contract, but I guess that wasn't uncommon. At that station, I never had a paycheck bounce. But there was one thing that remained the same: Only one out of every ten new hires would continue on after the three-month probationary period. Even in a large market, radio advertising remains a tough sell.

One other thing I found out was that when the economy takes a turn for the worst, the first course of action for a lot of businesses is to curtail their advertising budgets, starting with radio. It's an obvious choice for saving money. However, it still takes them awhile to cut their TV, print and Internet ads because they think those have more impact and they're probably right. It just stinks to have radio be the first to go.