Fatal Flaws?

Learning from Groupon

There’s a good opinion piece in the August 22 issue of Advertising Age about the hype surrounding Groupon. You can read it HERE.

I found it interesting because the writer could have been talking about Radio, and the flaws he describes as “existential” for Groupon are issues we need to solve moving forward as well.


Consider these comments:

The business press somehow took the fact that Groupon is ‘local’ — it goes after consumers and advertisers in specific cities — to mean that it’s ‘targeted.’ Sorry, no! For the most part, a Groupon subscriber in any given city gets the same damn offer as every other Groupon subscriber in that city.

This bit is important:

“(This) means Groupon is in the business of pestering the uninterested with unwanted offers — how much 60%-off laser-hair-removal sessions do consumers really need? — couched in ‘witty’ prose.”

This in the age of hyper-targeted marketing. (Watch for nascent competitors GOOGLE OFFERS, FACEBOOK DEALS and AMAZON LOCAL to do what Groupon can’t: reach the right customers with the right offers without alienating other customers.”

Radio executives and consultants spend an inordinate amount of time obsessing about the length of jock talk and bits while ignoring stop sets that have ballooned to 10 minutes on some stations.

Radio still finds the cheapest way possible to get spots on the air, from the initial sell (compare the training most Radio sales people receive to almost any other industry) to writing the copy (consolidated radio doesn’t pay for real copy-writers) to voicing the words the sales guy or intern wrote.

If the station even has a Production Director these days, s/he is so over-whelmed by the work load that actually “producing” an entertaining, effective spot isn’t even one of the objectives.

And we wonder why Radio doesn’t get its fair share of market advertising revenue?

The biggest issue of all is accountability.

Why pay for something that misses the target?
Why pay for the 8th spot, or even the 1st in a 10-spot set, when we all know listeners are long gone?
Why pay for spots that we have no way of showing were even actually heard?

Radio is still arguably the most efficient way for advertisers to reach a “mass audience” but we need to start thinking about the impact hyper-targeting will have on our revenues, because it is coming.

What are you doing to begin establishing a more personal relationship with each individual listener to your station?

Are you still sending email blasts to everyone who joined your listener club online, without knowing anything substantive about what each individual person likes, wants, and needs?

Ted Turner created CNN in 1980, and from that instant, the clock was ticking for newspapers. We no longer had to wait until tomorrow morning to see what had happened in our world after the network news shows ended at 6pm.

Craig Newmark started Craigslist in 1995, and within months it had to be clear to anyone in the newspaper publishing business that trouble lay ahead.

Radio is at that pivot point.

40% profit margins don’t change that reality.