By: Peter M. Zollman
At recent NAB gathering, broadcasters were coached about how to use
“”superopoly”” strategies to go after newspapers’ largest local advertisers
Newspapers are vulnerable to attack by clusters of local radio stations selling advertising in a coordinated way, the National Association of Broadcasters delegates were told at their Las Vegas meeting recently.
Radio executives attending the Nevada NAB seminar were urged to consider the use of “”multi-opoly”” or “”superopoly”” tactics to target newspapers’ largest advertising accounts.
Until the Telecommunications Act of 1996 forced the Federal Communications Commission to change its rules on multiple radio station ownership in a single market, owners were limited to one AM and one FM station in each market. There were also strict rules against signal overlaps from out-of-market stations.
Then came “”duopoly,”” as the FCC permitted ownership of two AMs or FMs in a market. Now, in major markets, owners can hold up to eight radio stations, and in smaller markets they can own up to three or four. The maximum of eight is sometimes called a “”superopoly”” in radio parlance.
Radio executives studying how to take maximum advantage of this new muscle invited four leading authorities to Las Vegas to coach them on management techniques for multiopoly clusters of radio stations in a single market. They discussed personnel issues, the opportunities a large cluster offers for cost reduction, cross-promoting one station on the others, event marketing opportunities for station clusters and more.
Cincinnati Enquirer Targeted
One of the experts ? Mike Kenney, market manager for Cincinnati-based Jacor Communica- tions ? detailed how he planned to use his regional superopoly of radio stations to target the multi-million dollar advertisers of the Gannett-owned Cincinnati Enquirer.
Jacor is a radio juggernaut ? the nation’s second largest group with 198 radio stations owned, operated or managed in 48 market areas, and WKRC-TV in Cincinnati. It syndicates the top three radio programs in the country, including the Dr. Laura Schlessinger and Rush Limbaugh programs. Jacor is publicly traded on NASDAQ; about one-third is owned by the Zell/Chilmark investment group headed by Chicago venture capitalist Sam Zell.
Kenney told NAB attendees that Jacor’s group of four AM and four FM stations would soon use the superopoly strategy to outgun the Cincinnati Enquirer in audience.
Kenney said he has hired a key sales executive away from the Enquirer to focus on the paper’s major accounts and turn their newspaper advertising dollars into radio dollars.
“”Our unduplicated ‘cume’ of the eight radio stations is 1.1 million; the circulation of the Cincin- nati Enquirer is 350,000. So where in the past we couldn’t do anything about the newspaper, now we can,”” he said. (Cume is the broadcasting term for the cumulative number of individuals reached in a given market in a given period.)
According to Kenney in the old days, before consolidation of ownership in radio markets, the best way for radio stations to sell against newspapers was to convince advertisers to reduce their linage and spend the difference on radio. Now, he said, Jacor can afford a dedicated sales rep just to go after the larger ad accounts of newspapers.
“”She knows where the bodies are buried; she knows when (the advertisers’) contracts are up; she knows what they are spending. She’s going to be able to go out and sell all eight of these radio stations,”” Kenney told the crowd of about 125, most of them radio station general managers.
Enquirer: ‘Not unconcerned’
Dave Hunke, executive vice president of marketing at the Enquirer, said he first heard of the strategy about a year ago when Jacor CEO Randy Michaels outlined it at the local ad club. He was not unconcerned, but said the newspaper has been unscathed so far.
Hunke said he has recently hired two salespeople from radio stations ? neither from a Jacor station. He denied he has lost anyone to Jacor. “”I think they’ve made job offers to seven of our top people, managers or top salespeople (all of whom) turned them down. They haven’t hired anybody from us.””
Hunke agrees with Kenney that owning a large group of stations puts Jacor in a stronger position in the marketplace than a few years ago, when the situation was “”one station, one format, trying to sell itself, along with 34 other formats in a marketplace all individually trying to position themselves to an advertiser. There’s no question their approach has merit and they’re aggressive about marketing it.” n
?(Zollman is a journalist and a new media consultant from Altamonte Springs, Fla.) [Caption]
?(E&P Web Site: http://www.mediainfo. com) [Caption]
?(copyright: Editor & Publisher May 2, 1998) [Caption]