Gerrymandering of radio ad sales territories may favor national sales stats over local

Some reports say radio stations are being kept afloat by national ad sales while local sales are abysmal. A radio rep says this may be due to 'gerrymandering' of territories to throw more of the business to national reps and less to locals. Inside Music Media quotes the rep:

• "“I sell for one of the big 3 Cs … and our commission was cut in March."

Here are a couple of other reasons local radio is down:

• “MANY MANY local accounts are now national.

“The NSM (National Sales Manager) often sells lower rates than us so naturally larger regional/local advertisers benefit from the savings. Personal relationships can’t trump the bottom-line in a recession.

• “Remember NSMs are salary with only tiny commissions so no argument from the home office. BUT there is no local sales “personality” to become attached to. Kind of like repeater radio for sales”.

(from Inside Music Media): "In other words, local advertisers don’t get the qualified sales professionals they used to get and whether the home office wants to believe it or not, the message that radio will work for them is not being reinforced where it needs to be -- on the street.

• Cumulus, for example, created the position of Key Account Manager (or KAM) that the Dickey brothers used to funnel commissionable accounts from the sales people that earned them to KAMs who are paid a lot less just to manage them.

Manage them doesn’t mean hang out with them, or get to know their businesses or help them to use radio to solve problems. It’s a simple financial workaround that cuts costs at the expense of local sales relationships.

• Also at Cumulus (and I am sure at other consolidators), local accounts are being taken back by headquarters so as to avoid paying the local salesperson’s higher commission rate. That is, national does it for less from out of town....

So, local accounts going national by assigning them to someone who works at a cheaper rate is one way.

• The other is, take back the local business and report it as regional or national."...

The author notes that local sales still show up well in small and mid-size market groups.

• (I noticed this story as a former local radio sales rep and recall the national v local issue constantly coming up. I can see the above scenario playing out, but still think the overall economy is the bigger issue. ed.)

from "Inside Music Media: Gerrymandering," 8/14/10, by Jerry Del Colliano, via RadioDailyNews

Tweet Stumbleupon StumbleUpon