AA: What is radio's biggest challenge?
Ms. papuga: The radio marketplace has really lived in a world that is way behind other media. They've been going through consolidation. ... There are still a lot of single owners. How do they compete with all the new media out there?
AA: According to the Radio Advertising Bureau, local radio revenue remained flat for the first 11 months of 2003 compared with '02, while national sales edged up 6%. RAB President-CEO Gary Fries says that things will improve as the economy picks up. Are you already beginning to see this?
MS. papuga: My expectation for 2004 is that radio will see a recovery due to the influx of political dollars and the trickle down effect if TV gets tight, as well as renewed advertising interest in all media.
If the network TV upfront market was as strong as it was [in 2003], there's not as much left [to spend on radio]. ...The networks have less to sell in scatter. Advertisers can pull back some of their dollars. But we're not sure the first medium they'll put the money in is radio.
The biggest challenge is all the technology in cable: ZIP-code ad targeting, advertising on demand and programming on demand. People are looking for a tighter concentration of where to spend their dollars ... Dollars have gone to broadband or the Internet. ...
AA: How can radio possibly compete with all the new digital forms of music such as iPods, TiVo, digital cable?
Ms. papuga: It is local. In most markets, [radio] offers DJs who have a following. ... [And] It's still an efficient medium as far as costs to reach a medium and production costs. Going forward, [radio] needs to offer better Personal People Meters. ... If I'm in a commercial pod break, is anyone really listening to my ad? ... That's what they've got going against them-the way to track people's button pushing.
AA: What types of new packages are the industry offering to promote radio to marketers?
Ms. papuga: Radio is always the hardest component to bring into the mix [in an ad campaign]. ... we've gotten into a rut, radio is sold in 30- or 60-second commercials.
[Marketers need to think] "What else is going to align me with this station's audience?" ... There's got to be something different. I think endorsement radio makes its way across lots of brands. I think people get excited when they hear endorsement radio. ... They've got to think beyond what they're doing day to day.