Programmatic & Radio: Radio's One Shot To Get It Right

Ink Tank with Eric Rhoads

Today radio-industry vendor Marketron announced that it is leveraging its Marketplace automated-scheduling platform to allow for programmatic buying. Programmatic is THE buzz in the media industry, because advertisers want to do exactly what you do when you decide to buy a book on your iPhone at any moment: They want to buy media with a few clicks, on their own time.

Today almost all cable, television, network television, and online companies offer programmatic buying. Advertisers are so enamoured by the convenience and cost savings that some have stated they won't buy media that cannot be bought on a programmatic platform.

Until today, there was no programmatic platform for radio that integrated thousands of stations.

Predictable Resistance

When I speak to radio managers about programmatic, most react with statements like this:

I don't want my selling in the hands of a computer.
Selling requires a human element. Without salespeople, nothing will sell.
This will drive down my prices and turn us into a commodity.
This is just a phase that won't last long.

Radio Is Hard to Buy Now

Radio needs to face the fact that it is hard to buy. Sure, media buyers who want to buy nationally can go through a rep firm like Katz and have a buy made for them. But the research is a killer for many advertisers -- if they decide they want to go deep, how easy is it, really? If Walgreens or CVS is in every town in America, and they want to buy advertising across all of America's rated and unrated markets, it quickly becomes a research nightmare that requires an enormous staff, lots of time and expense, and tremendous difficulty in getting all the current data.

What if agencies or a brand like Walgreens could go online, click the markets they want to buy, create a universal schedule, then click once or twice more and have the schedule bought, documented, and implemented across a system that inserts the inventory across thousands of radio stations?

The Expected Standard Today

Programmatic buying is revolutionary -- for the radio industry. But for other media companies, it is the expected standard. In other media, if you are not easily bought via programmatic buying, you're not on a buy. Period. Radio is already losing lots of revenue it could be getting, especially below the top-rated markets. As soon as programmatic becomes widely available, it will be effectively requiredfor radio to stay competitive.

OMD U.S. Director/National Audio Investment Natalie Swed Stone told Radio Ink this month. "I think radio could get more business. Let's put it that way. Let's call it more, if they had programmatic. We all know that radio is having a moderate-type year. More business is always a good thing. Everybody [in radio] should be getting up to speed."

Controls You Can Exercise

Naysayers are claiming programmatic will turn radio into a commodity, and there is some truth to that. But stations or groups can choose how much inventory they are willing to contribute to programmatic buying. For instance, if 20 percent of your inventory is unsold, you can contribute just that 20 percent and sell the rest through traditional methods. Radio can keep its inventory from being entirely commoditized.

The world of media is changing so rapidly. Consider the recent announcement that Verizon, a wireless and technology company, has purchased AOL. Suddenly Verizon is a media company, reportedly with plans to use AOL to produce new content for its 90 million mobile subscribers -- and the ability to offer media on a national or even local basis. With the data sets they can put together, they'll be able to offer highly targeted ads to mobile users on all kinds of platforms, including AOL locally. (And there will be more acquisitions of media.) Suddenly any local Verizon store could become a place to buy AOL ads.

Radio must be open-minded and not resistant to this. There are loads of reasons managers can find not to do it, but the reality is that you will benefit, and there seems to be little downside.

One System for One Industry as a Whole

Of course, I fully expect bigger companies to respond by saying they will build their own programmatic systems and sell across all their platforms themselves. But just as there really is no need for another major rep firm, is there really a need for three or four or five programmatic platforms? I think not. Why confuse advertisers and make them use five different systems to get exactly the stations they want? Wouldn't it be better if they could open one program and get to every station in the U.S.? Radio as an industry needs to have a single-provider solution in programmatic.

Just as ideally, there would be one streaming provider that aggregates every radio station in the world; the system breaks down when one or more groups opt out. In that environment, iHeart has its own platform, with iHeart properties but not the entire industry, and TuneIn has most of the rest, but without iHeart. It's simply better for the industry to make it easy for listeners (or ad buyers) by having everything in one place. That's why I think the major groups should strongly consider participating in the new Marketron platform.

Radio is missing out on lots of digital revenues, it's missing out on buys because it's not offering programmatic solutions. This announcement by Marketron is a major step in the right direction. Not only does it provide you the opportunity to expand your revenues immediately, it also allows you to have some national revenue eggs in another basket.

This technology is in place today because a company that already had traffic systems in the majority of U.S. radio stations innovated a solution with partner Jelli, which gives them the chance to make it easy to buy any station in the network using programmatic technology.

Playing With the Big Boys & Girls

Though many in our industry will be resistant and others will want to build their own platforms or play catch-up, if you attend any advertiser event today, programmatic is on their lips as the most important innovation in their world. Marketron's announcement allows radio to play with the big boys on a level playing field. It will be immediately embraced (some major advertisers will soon be announced as on board).

I encourage you to embrace this. If it fails you, you can always unwind it. But I think the rewards will be immediate and deep.

Eric Rhoads

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