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Old 3rd June 2009, 04:10 PM   #1
altnutt
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Default How To Get The BEST PRICE For Radio Ads

Hello,

I am a new member here and have been advertising on radio for quite some time.

How do you know you are getting the best rates when you spend money on radio?

Let me tell you a little story, I wanted to buy a specific time slot on a radio station. I went to our long time rep and asked for the rates, he quoted me $25 each spot. I then called the station directly without telling them who I was. The rep on the phone told me $65 per spot for the same slot. I called a new rep who did a jingle for me and wanted to be my ad buyer. He tells me $5 per spot.

When I told my long time rep I could get the spots for $5 he told me the guy was crazy and his friend was the station manager and would never approve that rate. When I called back the rep with the $5 quote he told me he could no longer get me the rate because the other rep created a firestorm in the station and now he is not allowed to talk to me because "I already have a rep". I should have just signed a deal for the $5 spots and shut my mouth.

What really bothers me is the whole practice of buying radio advertising spots. This seems to me unethical to have quotes from $5-$65 for the same thing. I understand everyone has to make money but come on this is insane.

So my questions would be;

  • How do I know I am getting a good rate?
  • Is there a way to know what the real advertising price is?
  • Can I bypass slimy ad buyers and buy wholesale rates by getting a media buyer license or by starting my own advertising business?
  • Why is a rep allowed to lay claim to an advertiser?
  • What would be the wisest solution to finding a reputable advertising media buyer?


I would really appreciate some discussion on this I feel it may shed some light on the entire radio industry as a whole. I cannot be the only one with these types of issues.

Altnutt

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Old 3rd June 2009, 04:21 PM   #2
BigChilla
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First question I have is where are you advertising that you can get those rates!

For me a $65 quote for radio in Chicago on one of the top FM stations would be a darn steal!

And I have to say I have run into the same troubles that you have, crazy swings in prices and no way to really be able to tell who is giving me the straight talk. Which muddies up the question of if you are getting a "good rate".

In my opinion, a good rate is something that fits in to what I can affor (of course) and is competitive with what other media reps are quoting me. I think calling a few of them was a good move on your part, but also showed you that you are working with some real slime balls.

"Real" advertising price is what I'm going to assume you are talking about when you also mention the wholesale rates these guys buy. No way you can get it for the wholesale rate - but you can find some great websites that show you what the average price is for different stations in different states and different times (you can do a quick google search and find all sorts of results that work.)

Starting your own advertising business is a move you can make in SOME cities. Look at what happened to google when they tried to get into radio advertising...things didn't go great and they shut down out around $200 million bucks.

Reps "laying claim" is more of a professional courtesy than it is a rule in most markets, there are exceptions - where are you from by the way?

The hardes part about finding a media buyer is...finding the media buyer Honestly it isn't easy, but google is an amazing tool when looking for a company that you can trust. I did this, found one that I was happy with, I just couldn't ever find the rates and found some really nice internet radio sites that are giving me the "juice" as they say.

Radio advertising is tricky, that's why so many traditional media outlets are starting to die, they don't have the pricing that their internet radio counterparts do - who happen to have better tracking tools to calculate ROI much easier. you can even sort of calculate what sort of brand recognition you are getting on internet radio, and not traditional radio. Again, a reason that advertising on radio is very tricky business, more effective of course, but also very tricky.

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Old 3rd June 2009, 04:54 PM   #3
altnutt
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Default Radio Buying

Chilla,

I am in San Diego CA. I am advertising on the AM stations now. The $25 a spot is what I am paying now for weekend AM talk shows. I chose this to a selected market I believe will pay off, "juice" as you call it.

I will start googleing what you have said about the average price for different stations.

The feeling I get is like these reps are going to their friends/other reps and saying in a laughing manner, "...look what I just sold this guy!" I think it must be bragging rights for a rep to be able to say what he sold the spots for instead of really trying to make sure the rate is good and the advertiser stays on board as long as he is making money. Wow, what a concept.

My business is not web driven so internet radio is probably not the answer for me unless I can be target specific for San Diego.

I have radio ads on FM stations that are profitable, meaning everytime they run I recover my cost and make a profit, however the profit margin is small and when I run too much it doesnt pay me back. So I realize I am paying too much for this, but I think I have shortchanged myself because why would the station lower the rate right? Even if I got a new rep I would probably not get better pricing because a new rep would know what I paid before and how much he can get out of me.

Altnutt

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Old 3rd June 2009, 09:42 PM   #4
radiogirl
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As a former radio sales rep, I'm really stunned.

This sort of behaviour did not happen at the station I worked for, so perhaps it varies by station. Where I worked we had a rate sheet. This was the top $$ amount for the time slots and in my time working for the station only one client that I recall ever paid the rate card rate.

There was a standardized way of applying discounts based on the number of ads each week and/or the length of the contract. The top discount was 40%. Even when we ran packages the price never dropped below the top discounted rate. I don't know about other reps, but I was upfront and open about the rate sheet and the discount process and always gave them the lowest price I was able to within the guidelines and never played the negotiation game. I've heard some reps do start higher to "leave room to negotiate".

As for the rep laying claim -typically reps sell by territory or off an established list. This prevents scraps in the sales room (keeping in mind they work on commission). You should be able to call the manager and request a new sales rep, but they may or may not do it for you. A refusal is often for internal reasons.

In the station I worked at, for example. before I left (I gave six weeks notice) she went to several of my clients to ask them to request to be transferred to her when I left (even though I was training my replacement and taking him around to meet my clients and making sure he had their full history and background). It turns out to be a good thing the manager refused to honor these requests (he asked the clients to hold off on the switch until they'd been with the new guy for a few months and were welcome to request again if they still wanted to change)
because she quit 2 days before my final day without notice.

A good rep should be a resource and someone who helps you make the most of your advertising not just signing the deal...they should be following up with you, making sure the ads are working, sharing ideas with you to help you maximize your return...not just showing up when it's time to renew the contract.

If you combine a direct radio campaign with an internet campaign to measure ROI quite easily. And it works beautifully on a local level. Some radio stations are fully set up for this on a technical level, however I have not seen one that fully understands and implements the internet campaigns well. In fact, most traditional media are playing catch up with the things that are possible by combining their media with internet...though some have to be catching on by now, I'd imagine.

A good rate for any media should be based on the results you expect to achieve and the ability to fit your budget. A good rep will be honest about the expected ROI based on what they know about radio and what you tell them about your goals, product line, margins and so on. (You don't need to be super specific if you don't feel comfortable, but every bit of information helps a good rep steer you in the right direction)

I can't help you with the stuff about the advertising agency/media buyer stuff. I have advised clients on what to buy, how much and from where...but not really in an agency capacity.

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Old 4th June 2009, 09:22 AM   #5
BigChilla
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Quote:
Originally Posted by radiogirl View Post

If you combine a direct radio campaign with an internet campaign to measure ROI quite easily. And it works beautifully on a local level. Some radio stations are fully set up for this on a technical level, however I have not seen one that fully understands and implements the internet campaigns well. In fact, most traditional media are playing catch up with the things that are possible by combining their media with internet...though some have to be catching on by now, I'd imagine.
I absoluetly agree with this statement - it's like traditional media is waiting to be killed off by the internet instead of jumping on it before it's too late.

The age demographic that I require is age 16 - 28 (finding someone to measure that exactly is hard) but the point I'm trying to make is my demographic is VERY tech savvy! An internet AD PLUS on Air ad would make me smile but it's so hard here in Chicago to find folks who have a great package for me. That's probably why I stick on internet radio for now - who knows maybe internet radio will really take off and they'll let me lock in my rates

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Old 8th July 2009, 05:28 PM   #6
thrive!
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Default sales people are just that, they sell...

It's too bad radio and TV rates are so subjective. If you end up with an unethical rep your business has to pay the price... that's not cool.

I've sold radio and TV advertising and it always amazed me the kind of stuff that would be done behind the scenes to "get the deal."

You don't need to start a "media buying" business to get good rates. You could easily find a media buyer that you trust, who is objective, and can hold the media accountable for what they sell.

If you can find an independent media buyer or a small media buying business with low overhead you will be amazed how much time, stress and money you can save your business.

Stay away from agencies that charge retainers or fees. I own a small media buying business. I am paid a commission from the station that would usually be paid to the sales person. The industry standard commission percentage for an agency is 15%. This means that your media buyer is paid the same commission regardless of what station you advertise on. This allows them to be objective and give you the best recommendation to help your business grow and become more successful.

Media buyers will get you more exposure for the same investment. If you spend $10,000 a month now to get 500 commercials, you will easily get 600 commercials for the same $10,000 using a media buyer. Make sense? Hope this helps You can find a media buyer locally OR you can find a good one you trust through referrals. A good media buyer should be able to help you place your buy in any market, big or small.


Last edited by thrive!; 8th July 2009 at 05:50 PM.
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Old 21st December 2009, 07:07 AM   #7
goldmember5
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TV and radio ad rates always have been too subjective and often overrated! Internet advertising brings much more targeted audience!

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Old 26th March 2010, 07:21 AM   #8
heidy_james
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This is a revealing site, which have the most up-to-date news and links. The perks are endless of this handy site. Thanks for giving out this info; itís really precious for me.

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Old 10th August 2010, 08:59 AM   #9
goldie.sachs
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Default Radio Spot Buying

Radio salesmen are worse than realtors. I went into a station as an unknown in a small town and the guy was talking $500 a spot. You have to laugh. Makes you feel ashamed to negotiate $50 per spot. Which is all I could get him down to. I still feel like I was mugged.

As for effectiveness, they show you all these charts like salespeople do...in the end you have to measure it against actual sales. Most radio adverts don't produce the required income in terms of direct sales - so then the reps will start pushing out the "branding" argument. Unless you have a fortune to spend, you really have to run tests and optimization strategies.

More effective are guest spots - the DJ talks to you about your product/service etc if it's got the right spin.

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Old 18th April 2013, 02:45 PM   #10
Carm
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Quote:
Originally Posted by altnutt View Post
Chilla,

I am in San Diego CA. I am advertising on the AM stations now. The $25 a spot is what I am paying now for weekend AM talk shows. I chose this to a selected market I believe will pay off, "juice" as you call it.

I will start googleing what you have said about the average price for different stations.

The feeling I get is like these reps are going to their friends/other reps and saying in a laughing manner, "...look what I just sold this guy!" I think it must be bragging rights for a rep to be able to say what he sold the spots for instead of really trying to make sure the rate is good and the advertiser stays on board as long as he is making money. Wow, what a concept.

My business is not web driven so internet radio is probably not the answer for me unless I can be target specific for San Diego.

I have radio ads on FM stations that are profitable, meaning everytime they run I recover my cost and make a profit, however the profit margin is small and when I run too much it doesnt pay me back. So I realize I am paying too much for this, but I think I have shortchanged myself because why would the station lower the rate right? Even if I got a new rep I would probably not get better pricing because a new rep would know what I paid before and how much he can get out of me.

Altnutt
I'm VERY curious as to how you made out. I am in the beginning stages of my business and am looking to find out advertising costs on our local stations for business plan as well as for later implementing. How did you make out?

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