Outside the Beltway

Radio Has Too Many Ads

James Joyner · Monday, June 21, 2004 · 2 comments

Variety — Ad glut rocks radio

The strategy of stuffing commercial radio full of ads has backfired, as a handful of investment banks predicted slower growth, downgrading six key radio stocks — Clear Channel, Emmis, Cox Radio, Entercom, Citadel and Westwood One — and the sector as a whole.

***

Karmazin built Infinity and repeatedly predicted over the years that consolidation meant radio would be able to snatch an ever bigger piece of the overall ad pie. The results have been mixed. As radio companies merged, the number of spots has surged to a high of 25 minutes per hour in some cases, said Goldman Sachs analyst Richard Rosenstein. He and others said the ad inundation — which consumers have bemoaned for years — has eroded the value of the spots. Advertisers have started to worry that their message is being diluted by the sheer number of blurbs.

One would think the real damage would be the erosion of the audience. I used to enjoy talk radio and spend much more time in the car these days than I used to. I wind up listening to NPR or CDs most of the time anymore because the ad glut elsewhere is just ridiculous. There is a long block–at least ten minutes–that bookends the top of the hour, another significant break at the quarter hour, another very long break at the bottom of the hour, and yet another one of the three-quarter mark. Sometimes, there are additional interruptions–including pseudo ads by the host. I never sit through the commericals, so I’m either back to NPR or the CD and frequently forget to tune back into the program.

Programmers seem to forget that the audience has options. I watch far less network television–indeed, programmatic television, period–than I did a few years ago for similar reasons. TiVo allows me to fast forward through commericals but the erratic scheduling, with two or three weeks of new programs followed by three or four weeks of reruns, has erased the patterns that used to be engrained in me: “If it’s Thursday, it must be E.R.” Showing new programs only during “sweeps” periods may make sense in the short run, but it erodes audience loyalty over the longer term.

Similarly, commercial radio could well kill itself with the current strategy. CD and MP3 players make bringing your own music with you far simpler than it once was and commercial-free satellite radio may become the logical alternative for those who are on the road a lot.