Did you hear? McDonald’s is becoming a new media company.
It’s true: Ronald and Grimace are testing third-party advertising (let’s call them “pre-rolls”) on digital drive-thru boards at 450 company-owned restaurants.
Meanwhile, some radio clusters are still focused on how the 20-minutes-late traffic report can carry a third sponsor.
When the burger company is creating new media inventory, it’s time to move faster and pay closer attention.
Inventory Isn’t Innovation
I’m all for making as much money as possible. Radio has been great at it for decades. But growing revenue today requires more than selling add-on pieces to what radio already has.
When everything has a sponsor or adjacency, when spot banks are bonused, or when weather and traffic have an intro, middle and outro — that’s inventory bloat. “Tacking on” is incremental growth at best, and if any of it is added value or low dough, the problem gets worse.
I know revenue growth is harder than it looks. But it’s clear we must look at it differently. People across the industry are grinding through smaller staffs, fewer resources and higher expectations, yet they’re using the same playbook. That’s more of a problem than podcasts or streams. And here’s what won’t significantly change the trajectory:
- Longer stopsets
- Incompatible naming rights
- A new AE with a failed client list
- Expecting higher ratings to be an auto-lift
- Asking advertisers to pay more for something they’ve bought for years
- Treating digital revenue like terrestrial inventory on another screen
- Doing last year’s plan with fewer people
Where the Puck Already Went
The puck went to digital years ago. But that doesn’t mean duplicating radio’s existing revenue model on another platform.
So where are we, exactly? Digital doesn’t simply mean stopsets, logos on graphics or disjointed naming rights on anything reaching a stream or screen. That’s the old model, and it’s not what advertisers are now seeking.
Build It Together
Revenue by design begins before the programming is built. It starts with an opportunity, followed by designing something both the audience and the advertiser will value.
Sales can’t just be given finished programming and then told to go find a sponsor. Programming can’t just keep being handed a name and claim and told to go make it fit.
Get everyone in the room earlier, especially the talent. “Crazy Larry” in the afternoon knows what will work on his show better than anyone else. Especially these days, when AEs, GMs and PDs are also handling duties on 19 other stations.
Build something listeners will anticipate and advertisers want to be a part of. Create social and digital extensions. Give the audience a way to participate. Identify natural advertiser lanes and make the results measurable.
That’s revenue by design. It’s not a cram-down, a round peg forced into a square hole or the third different sponsor inside “Mandatory Metallica.”
I rarely mention my Black Box Group work outside this column, but this is today’s reality. It’s how I spend most of my week — creating revenue opportunities through programming or content design. And it’s also how podcasters and influencers built their businesses without stopsets, Nielsen, towers, transmitters or decades of radio relationships.
It’s all doable for radio. It is. But it’s passing many by.
Strong Integrations
The strongest integrations don’t sound stapled to a show — they feel like part of it. The audience gets something worth hearing. Talent gets something they like doing. The advertiser gets compatibility and more than a logo. Sales gets something easily renewable. And radio gets new revenue without making the product worse.
That last part is important. Revenue by design doesn’t put the advertiser before the audience. It identifies the opportunity, then builds something people will want and advertisers will value and fight for.
McDonald’s is turning its drive-thru into a media network. Will the Happy Meal kids like watching an ad after they order? Who knows? This experiment may end up being inventory bloat of its own. But it’s the innovative thinking that is worth applauding. McDonald’s is looking beyond burgers and beyond putting a random logo on the Filet-O-Fish box. It’s treating its reach, customer relationships and drive-thrus as an entirely new revenue stream. It’s very smart, actually.
Radio needs a new attack strategy for revenue. It’s not about stopsets, adjacencies, name and claims or apps. Let’s stop bolting revenue onto programming and build programming that creates revenue … by design.
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