NTR and Small Market Radio: A Necessity for Survival

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NTR and Small Market Radio: A Necessity for Survival

May 5, 2010 10:00 AM, By Roger Paskvan

Non-traditional revenue (NTR) has been one of the main buzzwords in the broadcast world for the past 10 years. Although a lot of focus has been put on NTR, the concept and several of the practices of NTR for radio stations have been around nearly as long as commercialized radio. By definition, NTR is any means by which a radio station brings in revenue through means other than on-air spot sales. Until about 15 years ago, this meant that NTR revolved around events and promotions. With the advent of widespread Internet usage and other technological advances through the 1990s, several new avenues for NTR have opened.

The advent of new media has been both a blessing and a curse for the traditional forms of media in print, television and radio. The Internet alone, bringing with it the ability to perform the basic tasks of delivering print information, streaming audio, and streaming video, brought forth a means for non-broadcast enterprises to produce and distribute audio and video content in a far more efficient and cost effective way. These changes challenged traditional media providers by bringing regardless of whether they are traditionally a radio station, newspaper, or television station.

The Internet's potential in bringing NTR opportunities to media outlets is a double-edged sword in that the Internet's ease of access and relatively low costs make it easy for a business to do a large portion of its marketing without involving traditional media outlets to purchase advertising. This has made media selling more difficult nationally as businesses explore other avenues to more directly reach consumers.

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Figure 1. Pre-new media marketing avenues. Click image to enlarge. Source: RAB

Businesses are moving toward the Internet and other NEW Media for their marketing needs. Instant response, unlimited access and a global perspective make it hard for the small station to compete. What used to be a viable marketing strategy is now almost obsolete. Flyers, coupon books, direct mail and even the plain newspaper have been replaced with new media ideas.

Instant everything makes the old media a dinosaur just waiting for final extinction. If a station wanted to expand its listener base before the Internet, there were limited options, as shown in Figure 1.

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NTR and Small Market Radio: A Necessity for Survival

May 5, 2010 10:00 AM, By Roger Paskvan

Add new media

With new media offering venues to market businesses, traditional media has been met with the challenge of how to capitalize on these new opportunities in order to stay viable as a business. This challenge has been met nationally by large radio companies taking advantage of resources in bigger cities, but the adoption of these new media NTR opportunities has been slower to occur.

The key element to NTR for radio in any size market in this age is a website. A radio station's website can create a number of NTR opportunities alone. Development of a website for a small market radio station may seem like an inefficient use of time and money to some stations due to the cost of developing and maintaining a functional site, but these services are becoming increasingly inexpensive and sometimes can even be traded out for airtime. The value of a station's website, if used correctly, can far offset the costs of it in both with increasing listener interaction and loyalty and financially.

The most basic means of developing NTR opportunities using a station's website is through selling banner ads or sponsoring sections of the website. Some stations also include a business guide on their site that is regularly promoted on the air to drive traffic to the site. The guide generally basic information for all on-air and online clients including the business's name, address, phone number, a link to the business's website, and a feature allowing site visitors to map the business's location and get directions from their current location or a specified address. Some companies are also offering additional features to this business guide, offering printable coupons in the business guide and a feature similar to the familiar "online radio auction" where business goods and gift certificates are sold. Including options like this in a sales proposal not only provides more of an impression for businesses, but it also allows radio stations to adjust prices as necessary for the increased services being offered.

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Figure 2. Post-new media marketing avenues. Click image to enlarge. Source: RAB

Along with the basic concepts, a station's website allows a venue for more content and as a result, more things to sponsor. In a smaller market, it isn't quite as easy to generate online content as it is in a larger city. Big market stations usually have a person or team of people in charge specifically managing and developing online content. Being budgets are smaller in small-market stations, working with existing content is always a good starting point.

Podcasts of popular segments during morning or afternoon drive shows can be developed simply by recording the segment and posting it to the website. Some stations are having jocks create a longer-form version of the segment for the podcast, driving people who enjoy the on-air version to check out the full-length version online. These podcasts are generally built with a sponsorship message at the beginning and end of the podcast, and with longer podcasts there is also a message inserted into the middle. The concept of a podcast has also been used for businesses that use institutional advertising as a means to market their business and also show expertise and offer advice on the subject of their product or service. The podcast would consist of a few minutes delivering a tip or "did you know" type of information in the industry of the sponsor business. Examples of businesses that would benefit most from this type of product would be plumbers, auto dealers, home builders, banks, and mechanics. The concept of networking over the Internet, banner ads, streaming audio, emails, mobile marketing and alternative forms of delivery are taking over. Figure 2 outlines new available options.

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NTR and Small Market Radio: A Necessity for Survival

May 5, 2010 10:00 AM, By Roger Paskvan

Radio stations that stream their on-air programming have the opportunity to sell around the programming online. Most broadcast software enables stations to air a separate set of ads during commercial breaks online if they choose to do so. These spots could be sold if it was proven that the programming was being listened to online. Stations can also use video and still visual (print-like) sponsor messages around their Internet stream. Stations are also starting to develop streams devoted specifically to broadcasting local high school athletics or local news and community events as a means to cover the event without eating up the airtime on the air. Stations will generally have a launch page for these streams with sponsors getting space on the launch page and also getting messages in the Web stream during broadcasts.

More than online

The realm of the Internet boasts great promise in terms of NTR opportunity, but there are still other means by which to generate NTR. Some stations have experimented with their RBDS signals to deliver information about sponsors during on-air spots as a support for the on-air message. RBDS has also been used as a tool to drive promotions by directing listeners to call in to win, visit a website, etc. The drawback to this NTR option especially for small markets is that not many radios feature RBDS technology yet and as a result many small market stations don't use RBDS. Some radio sales trades argue that this is a chicken-or-the-egg situation where if small stations used RBDS that more people would buy RBDS-capable radios, but information regarding that is inconclusive.

Another emerging NTR tool is text message marketing. Databases can be created by using popular programs or contests to get listeners to sign up for the service. The service can also be used as a tool for promotions to get registrations for giveaways. After stations have a sizeable database, the tool can be used to deliver station and sponsor related messages about special offers. Some companies such as McDonalds and Coca-Cola have used text message marketing to generate text message coupons. Listeners receive a code with the coupon details to be redeemed at a participating store. Opportunities like these could be designed for several types of businesses using the on-air portion of a radio station to support the coupons being sent to listeners. This means of NTR is viable for many small market stations, assuming cellular service is readily available around most of the listening area.

Mainstream NTR

Finally, the most "mainstream" of NTR opportunities for radio stations are promotions and events. These on-site opportunities have been very successful in building listener loyalty, station awareness, and ways to generate revenue by involving sponsor businesses. This type of NTR is far easier and, according to the Radio Advertising Bureau, more heavily used in smaller markets. The types of events that can be created are virtually limitless, with stations organizing concerts, business expos, bridal fairs, amateur sporting events, and more. These events have several ways to generate revenue for the station, and with new technologies the opportunities are expanding. The incorporation of text messaging at these events as well as an emerging marketing technology in interactive Bluetooth messages from sponsors supplementing other messages at events is providing a more intense way to get the attention of people and deliver valuable information from sponsors.

The key to success to these NTR opportunities is designing a plan that will blend a number of different options together to help the business better market itself or help the station drive more revenue as a result. It's the combination and integration of NTR into mainstream radio that ends up with positive results for your bottom line. With today's depressed radio market place, NTR remains a viable source of additional revenue to the creative radio station business.

Roger Paskvan is an associate professor of mass communications at Bemidji State University, Bemidji, MN.

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