Paul: Andy’s going to help on many fronts. First of all, our client list has grown, so we’re obligated to make sure that we’ve got the staff in place to handle the business. He’ll enable us to grow while ensuring that each of us can provide the appropriate level of attention to our existing clients. We talked to a lot of really good people about this job. There are some top-flight programmers who interested us. This is a unique position, because it requires not only programming knowledge, but also the ability to communicate it, the need to innovate, the skills to interact with general management and ownership, a research background, and more.

Fred: Andy brings a different style of thinking to the company, and in our effort to keep innovating, he was a great choice. You need to find someone who has a broad background, and Andy not only has programmed in major markets, he’s been a group programmer for Greater Media, worked in research with Coleman, and was a General Manager for Emmis in Buenos Aires. And, he loves to travel – the final piece of the puzzle.

Paul: We run a very casual operation that’s short on structure. Everyone in our company, from Bill, Dave, and Tim, along with the rest of our internal staff, makes a significant contribution outside of their basic job description. A tremendous amount of effort goes into creating everything from major new initiatives like "Workforce" to our new "Marketing In The New Millennium" initiative, to the newest version of basics like our Halloween memo. Yesterday, for example, Dave sent our staff an e-mail he wrote while on a long flight that contained several new ideas he found while reading on the plane. We’ve just added Todd Bathje to our team, who not only used to be a promotion director at a few radio stations; he was also a professional wrestler, so he certainly brings a new perspective to us.

Fred: Dave is also a great writer, and his background and experience in AC brings a different skew to the company. Bill has really exploded in the past few years. He’s one of the smartest guys with Selector in the business, and I count on him a great deal. He’s truly made a mark with many of our smaller and medium market clients, and has had so many successes. Bill has a quiet way about him, but can be very dynamic and forceful when the situation calls for it.

Fred: On top of expanding our company’s brain trust and its capacity to service our domestic business, Andy’s international experience will enable us to potentially expand overseas. I haven’t wanted to do that previously because I felt that it would hurt our focus. We’ve passed on many of these opportunities and concentrated on the States, with tremendous results.

Paul: As the Vice President of International Programming for Emmis International, Andy brings knowledge and experience to our company that the rest of us don’t have. We understand the issues facing Rock stations in the States, but it’s a different story in Amsterdam or Prague. Andy has traveled the world, and established credibility in Europe and Latin America. He’s qualified to develop this business should we decide to cultivate it. But our first priority will be to service our domestic clients at the highest level. We’ve been fortunate since consolidation to enjoy the confidence of virtually every broadcaster. Consultants are under more scrutiny than ever, and if you don’t deliver, you’re gone. Money is tighter than ever, so companies that rely on consultants insist on results. We won’t lose that focus.

Paul: That question could be the basis of an entire article. I could give you a long list of sales issues, but I’ll focus on one central theme. The challenge facing sales staffs today is understanding that despite incredible growth demands from ownership, and price pressure from clients, radio is not a commodity. In an attempt to grow business 20 percent annually, companies have focused more on packaging and pricing structures that are holding back growth. It is asking a lot of a salesperson to understand what makes one radio station the perfect fit for a client. Imagine trying to be an expert on four or five stations at a time and communicating their nuances to an advertiser in a fifteen-minute meeting.

Commodity-based selling is hurting our business on several fronts. Our sellers don’t know their products as well as they used to and are becoming more ratings-dependant. When you bundle several stations together, not only do advertisers expect a discount, an environment is created where sellers are less focused on client needs and more on moving spots. And lower rates mean adding inventory to achieve goals, thus potentially harming the effectiveness of an ad campaign due to clutter.

Fred: Not to mention programming.

Paul: Over the long haul, this focus on efficiency and share is diluting what’s important about our radio stations – the specific audience each delivers, the unique environment radio provides, the skills of our air talent, and more. As we stop talking about the value of our sales brands, the less important and less vital radio becomes.

We need to develop a respect for what makes radio unique and valuable. This includes a focus on client need, an understanding of product and audience that enables sellers to fulfill these needs, and an environment where the staff is trained to develop solutions that reinstate radio as the valuable medium that it should be.

Fred: We’ve probably been ahead of many of our clients in this area, but I don’t think that’s a bad thing. Many in our industry have jumped on the conventional wisdom bandwagon and criticized the Internet because it’s not a revenue generator. While we agree that stations aren’t going to realize significant revenue in the foreseeable future (if ever), that doesn’t mean that there isn’t value in having a compelling Web site. In fact, investment in a Web site, and a database marketing program is actually a cost-efficient way to reach what we call "Super P1s" – listeners who account for a majority of a station’s quarter-hours.

It’s interesting that Avis, United Airlines, and Hilton know how to identify their heavy users. But in radio, we know they’re out there, but have always had trouble finding them. With all due respect to some of the telemarketing companies out there who charge thousands of dollars trying to help stations find P1s, the answers are all in station databases. If you’ve got a strong database, you have the conduit to finding your "Super P1s."

One of the early Edison/Arbitron Internet studies contained a significant fact – that over 70 percent of station Web site visitors are P1s to that station. This alone is validation for an investment in a compelling Web site.

Our job is to continue to develop effective, cost-efficient Web-based strategies for our clients and make sure they don’t reject the Internet because they keep reading and hearing that it’s a financial black hole. At our 2002 Summit, we featured Ben McConnell, who is writing a book entitled "Evangelist Marketing." You guys featured him in last week’s FMQB. Ben spoke to our clients about developing strategies for identifying station "evangelists" and motivating them to spread the word via email about their favorite radio station. We recently sent out a comprehensive client White Paper that detailed how stations can pull this off. If effective, stations may be able to reduce other marketing expenditures to cover the cost.

I’m sure we drive our clients a little crazy by constantly pushing more extensive Internet efforts. But we’re seeing it work in many areas, and we see this as a mandatory element of marketing a radio station in 2002.

Paul: Jacobsmedia.com is one of the best investments we’ve made. Our clients can access virtually every memo we’ve ever written. When we sign a new client and they want to do the "Workforce" promotion for the first time, we can direct them to that section of the site. They can find everything we’ve ever written, production examples, and graphic ideas to help them execute the promotion flawlessly.

But the site is also incredibly dynamic. It’s updated several times every day, because we need to mirror the constant shifting in news, pop culture, and music. We need to work in parallel with our clients every day, so when they’re thinking about tomorrow’s morning show, they can go to the "Morning Prep" section and see what the audience is buzzing about, obtain telephone numbers to set up interviews, and be reminded of important TV shows, movies, and other pop culture news.

Fred: The site also enables us to make our client memos multi-dimensional. Along with our thoughts, Tim augments our ideas with links and other Web-based elements that greatly enhances and improves what goes out. Jacobs Media memos are no longer pieces of paper, but dynamic documents that link to Web site and other resources.

Paul: There’s a complete Sales section, so when our sales staffs have to put together a proposal for virtually any client, they can access information broken down by account category. I’m amazed at how many "visits" this section generates.

Fred: Our Web services are at no additional charge to client stations. So, while it can be expensive to operate and maintain, it’s been a great investment. There’s no question that part of our success the past couple of years can be attributed to the quality of our Web site, and the enormous volume of ideas and information we provide to our clients. We really felt this in the days and weeks after 9/11. The site gave us the ability to communicate daily ideas, resources, and content to our clients. We heard from many of them after things quieted down about the value and timeliness of this information. We take great pride in what we’ve done on the Internet, and every month brings new and different concepts that we’re quick to integrate.

Fred: We coined the term, "Retail Radio," a couple of years ago. It’s an offshoot of "Retail Politics." Larry Rosin was influential in turning us on to the analogies between politics and radio. When you think about the biggest politicians, they all have millions of dollars for marketing – TV, radio, outdoor, lawn signs. But yet, they’re always out there at factory gates, at spaghetti dinners, at elementary schools, and in coffee shops working the crowd. Why? Because hitting the streets swings votes.

We have developed concepts for our clients so they can put together their own "Retail Radio" strategies. No matter the format, winning the street war is good business. It’s amazing that GMs will express disappointment when the sales people are hanging around the cubicles in the afternoon when they should be out there selling. Yet, oftentimes, station vehicles sit there in the parking lot, day after day.

Paul: At many stations, street presence translates to fulfilling sales commitments. Stations that are really serious about developing great street images go well beyond that. It takes a serious commitment, in terms of logo ware, bumper stickers, display materials, and vehicles to do this right.

Paul: We love the idea of a more accurate ratings service. However, we also feel that something as new and unknown as PPM needs to be thoroughly tested in the field. As you know, we’ve already worked with our clients to make sure they understand all the intricacies of this new methodology. PPM could change the way we market, and to some extent, even the way we develop programming and formats. If Arbitron does its homework, its field development work, and demonstrates it has its arms around PPM, I think there’s a good chance radio will give it total attention and consideration. But there’s a lot on the line, and no one’s going to go on faith that PPM will be better than the diary. There are also a lot of unknown variables, including the price.

PAGE 1

PAGE 3