National cable television networks largely solved the problem of unsold inventory by instituting a “direct response rate” structure. Generally speaking, this structure involves preemptible rates in very broad dayparts (or no dayparts). To qualify for this rate, TV direct response advertisers must have a specific telephone or URL call to action. It’s a simple, straightforward and well-understood process.

Radio, unfortunately, does not have such a process, either on a network or local spot market basis. The result is that for many decades, radio stations have not had an easy way to offload unsold inventory without feeling like they are degrading their inventory value. Consequently, local radio stations in particular have relied upon specialists who negotiate low CPM buys or per inquiry advertisers. Such buying mechanisms, however, are difficult to scale for advertisers because not very many stations like to deal with those buyers. Advertisers have also found it difficult to scale their buys with those specialists.

It was this lack of an adequate process for accessing unsold radio airtime at discounted rates that got me wondering if there wasn’t a way to leverage the power of auctions and the Internet to accomplish this. I knew that there were companies that had tried in the past to create online auctions or advertising exchanges, but had failed. The concept of Bid4Spots came out of my realization that with a high supply of inventory and a relatively low demand (advertisers being concerned more about buying next quarter than next week), the others had simply not realized that a forward auction with buyers competing for the highest price should be flipped upside down. A better way to create media buys with high value would be to have the sellers competing and the lowest prices (CPMs) winning.

Dave Newmark is CEO of Bid4Spots.

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We know what works in radio advertising. It comes from the thousands of tests we’ve conducted over many years that have filled in the vast universe of possible actions one can take in building a radio advertising campaign, with reliable guideposts pointing toward success and away from failure.

But there’s a subtle paradox involved in that “knowing” of what works—a paradox that we’re required to understand fully before we can actually provide people with the benefit of our knowing.

The moment you believe you fully know everything, you essentially know nothing.

Think about it this way—if you know everything, you stop questioning. You stop looking, asking questions, seeking answers. And when you stop looking, you stop growing and learning—you stop getting better. Worse, though, you become rote, acting out of habitual patterns and approaches. You get mindlessly repetitive. You become boring—and if you’ve been exposed to advertisements lately, you’ll see how common this is. How all ads start sounding the same and they all air in the same places.

So “knowing” successfully requires the combination of two mindsets. One mindset is that of the wise old sage. It’s a mindset that acts with a confidence that comes from the combination of deep experience and lots of hard data about what works and what doesn’t.

The other mindset is the “child’s mind” approach. The approach that encourages us to look at a situation, a campaign, with fresh eyes as though we’re seeing this campaign and radio advertising for the very first time. Think of the way children are curious, uninhibited, not afraid to fail or ask a direct question, unencumbered by knowledge and unconditioned by experience.

Do you agree to the mindset paradox? Can this be applied across all media channels?

Jeff Small is CEO and Brett Astor is vice president of Strategic Media Inc.

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If there were a top-10 list of “do’s and don’ts” when working with a radio advertising agency, this one would be on the list:

Don’t rush your radio agency’s creative process.

Few advertising agencies will ever tell you this. Why? Because we want to please the customer. Sometimes, as hard as we try not to fall into the trap, we will try to please you even when it isn’t in your best interest to do so.

We were recently reminded of this phenomenon. A client was in a hurry to be on the air as soon as possible. (Not unusual.) He asked how soon we could have him some radio commercials for review. We took into consideration our current line-up of creative projects and the time we thought would be necessary to produce great work and we gave him a date. It wasn’t fast enough for him, and we then received the hard-charging business-guy press for “more, better, faster”.

We folded. Caved. “Okay, we’ll do that for you.” And we quickly realized it was a mistake. When it comes to writing radio commercials, the process cannot be rushed. It is not a matter of sitting down and writing a half a page of words. It can be that, but then the chances of success are severely diminished. Why? Because that’s just not the way insights occur. And if you write radio commercials without some set of insights about your customer’s underlying thoughts, emotions and perceived needs, you’ll get one thing with 100-percent certainty: a radio ad that sounds like a lot of other radio ads. And that’s usually a radio ad that won’t do as well as hoped. (more…)

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