NONTRADITIONAL REVENUE RAMPS UP Ken Tucker – Radio and Records You see it every month when the RAB releases revenue figures: Local and national revenues are flat or down, but non-spot is up by double digits.
Similar news came out of the recent Interep Radio Symposium, where the point was raised that while nontraditional revenue (NTR) had double-digit increases, those streams still account for just 6%-7% of industry revenue.
Today's operators realize they must adapt to changing market conditions. Over-the-air spots, long the near-exclusive source of revenue for radio, can no longer be relied upon as the sole income generator.
Elaine Clark, GM of Emmis' Revenue Development Systems (RDS), which works with a variety of clients (and not just Emmis stations), says that the fastest-growing aspect of NTR is not a category of business, but involves incorporating various interactive elements into programs.
"Instead of holding a bridal fair or concert, stations can now post pictures on their Web sites, include various artist profiles, add podcasts following the event, add contesting for tickets and memorabilia and include behind-the-scenes interviews," she says.
NTR, Clark points out, has always been about adding non-radio elements to a program in order to enhance the consumer experience. "The Internet, cell phones, texting and e-mail allow us even more opportunities to create a total 360-degree experience."
Sport drinks, home improvement products, convenience stores and craft beers have been strong categories this year and will continue to be, Clark says, noting that sponsorship dollars marks another strong category. "The International Events Group estimates that sponsorship spending will increase by 11.7% this year," she says. "Clearly, if sponsorship spending is forecasted with double-digit increases, radio stations should take advantage and incorporate more sponsorable opportunities into their sales strategies."
Clear Channel/Nashville has come up with an innovative sponsorship plan. Tune in to country WSIX (the Big 98) and you'll hear the facility referred to as the "Fifth Third Bank studios." Special events director Candace Price says she thinks advertisers are more open to non-measured media than they have been in the past. "They're not necessarily looking at the cost per point; they're looking at branding opportunities and looking at the big picture instead."
Price, whose specialty is events such as the Music City Brewer's Festival, says even though she hasn't added new events, there is growth potential. "Every year we're more established, we have more opportunity to bring on bigger sponsors and generate more money."
Brokered events are also a growth category, she says, noting that she's about to work for the first time with an event that has been around since the '70s. "The people that do this event know the ins and outs of the category they work within, but they don't know about sponsorship," she says. "We're going to come to the table, promote the mess out of their event and they're going to give us an opportunity to sell sponsorships."
While Clark says NTR still accounts for about 10% of RDS clients' overall business—just as it did two years ago—she says that in many cases, the term "NTR" is no longer used. "It's now normal business practice," she says. "As marketing consultants, we are charged with creating the best solution for our clients. Generally, the solution should include multiple touch points, hitting consumers where they work, play and shop."
Read much more from "Nontraditional Revenue Ramps Up" in this week's R&R (July 27, 2007). Get your copy now by calling 800-562-2706 or 818-487-4582 between 5 a.m. and 5 p.m. Pacific Time, or e-mail radioandrecords@pubservice.com. |