Radio Struggles to Build Web Business

Ever taken a really good look at a radio station website?

Aside from the questionable layout and content (some call them a train wreck), have you ever wondered how radio can build a business and drive Internet revenue from those efforts? These are the issues that overworked radio managers are trying to come to grips with.

The pressure is on.

Radio's primary revenue stream of selling spots is really taking a beating. The latest RAB (Radio Adverting Bureau) revenue numbers are in. Business was down 2% last year -- its worst decline since 2001. December was down 5%; that's now eight down months in a row. Local rev down 4% and national down a whopping 12% ... where's the upside? Web-driven non-spot revenues ... up a very healthy 12%.

Revenue UP, Share DOWN.

While that 12% web increase looks nice, bear in mind that radio web revenue SHARE is actually down. Radio could literally double its web rev, and still leave a ton of money on the table. The latest Borrell report on local online revenue shows that radio only gets about 1% of local online ad expenditures. That's DOWN from last year. So, is there any good news? Yes, a little. And it comes from Clear Channel.

Somebody at Clear Channel deserves a raise.

Whoever got Fox to buy this should be promoted. For the season debut of "American Idol" last week, Fox took over every single ad unit available on the web sites of 250 Clear Channel stations in 40 markets. That was a deal for 13 million impressions, using leader boards, skyscrapers and pre-roll video ... with NO on-air buy. This is a sign of things to come.

According to Radio Business Report:

CL King & Associates analyst Jim Boyle says, "It's time to monetize the P-1s, time for dual-revenue streams. That means enticing loyal fans to interact with the station on its website, utilizing the tech savvy and cultural intimacy of its youngest employees to lead the way."

How can radio seriously get into the game?

First, radio must admit that they need more outside help. There are too few people inside of the radio industry who have a handle on the fast-changing digital landscape. Just relying on the local sales managers or the GMs to develop a strong web plan will only delay the pain of making a serious investment in hiring and re-training.

Finding web experts to help radio will not be easy.

It will take a lot of money, too. In the meantime, here are some questions that will help radio understand what their web plan needs to consist of:

* Does each seller have a mandatory web budget? Penalties for not hitting it?

* Commission structure similar to or better than your NEW BIZ commission?

* Do your reps know their clients' online strategy?

* What is the total local online spend in your market? What is your share?

* Do your managers have a strong grasp of web? If not, how will they effectively manage the effort?