One radio station in the US increased its sales by $1 million in 12 months after using SMS campaigns, thanks to Aussie Graham Knowles. The former radio sales director, who is now an expert at driving revenue for broadcasters through mobile channels, was a founding partner in Hipcricket, a US company which specialises in using mobile interaction to generate revenue. Today he shares some revenue secrets and case studies with radioinfo readers in this exclusive article.
The traditional advertising revenue streams that radio and television have relied on in the past are clearly eroding with proliferation of competitive media. Faced with this reality broadcasters must find tools that fit with their business while responding to a rapidly transforming advertising landscape. Amidst all this uncertainty, interactive, mobile SMS marketing has emerged as a meaningful channel to help broadcasters grow their revenue.
This isn’t shifting gears and selling something totally different. The beauty is, sellers can understand the concept quickly and also explain the benefit to customers. It’s about taking traditional ads and introducing a mobile element, giving the audience a way to retrieve more information or a special offer.
Here’s a great quote from David Ogilvy, “If you’re trying to persuade people to do something, or buy something, it seems to me you should use their language, the language in which they think.”
Today that is undeniably their mobile devices and the mobile component with the greatest reach is SMS.
The SMS Phenomena
How can something so simple dominate the way we communicate! When our company first went to the US and tried talking to carriers like AT&T the people we spoke to just looked at us with blank faces, not able to grasp why anyone would choose to write a text message and be limited to 160 characters instead of simply picking up the phone and talking to someone. Yet here we are today, with unbelievable US statistics like these:
- 5 billion text messages are sent every day (Source CTIA Dec 2009)
- The typical Mobile subscriber sends 50 text messages compared to placing 5 calls a day! (Source Pew Research centre 2010) Just let that one sink in for a few seconds, the ramifications of this meteoric change are huge when you think about it.
- More than 76% of mobile subscribers around the world now send and receive text, with people of all ages using it.
And with the hype existing around iPhones and mobile internet, it seems crazy that text messaging continues to be the fastest growing communications channel in history. Why, because it’s simple, fast and easy. Who has time for long conversations? Email consumes way too much time. Give me the facts and let me decide what I want to do. Ten and eleven year olds want a mobile phone for their birthday, not to talk to their friends but to send SMS messages.
The marketplace has been shifting and now the consumer is in control. In the instance of radio, this approach is the perfect marriage of the two most personal media forms, radio, which has been around for 80 years and mobile the most personal device ever.
Breaking New Ground
With the belief that SMS and radio seemed a logical fit, two colleagues and I embarked on tackling the gigantic US market with more than 12,000 commercial radio stations compared to 200 or so in Australia.
Today our company Hipcricket is recognized as the mobile leader in the United States and Latin America. From the outset the company’s success was based on creating new revenue channels for traditional media like radio. We now have over 700 stations using our services.
It’s easier than you might think
Everything that we do is based on the mobile phone. It allows radio and tv to engage with their audiences and for brands to broaden the relationship with consumers. SMS (Short Message Service) text messages present tremendous advantages in ease of use, immediacy and integration with existing advertising schemes. For example, you have probably heard or seen commercials with a SMS call to action in it. The consumer responds with a particular ‘keyword’ and now the success of that campaign can be measured because people always respond immediately to a SMS call to action when it’s heard or seen, providing excellent campaign metrics.
Belief Generates Big Bucks
My favourite US Sales Manager is a lady called Kris Foley. In 2007 in a flat Cleveland market, when all the local advertisers had become very savvy media buyers and successfully played one station off against the other chasing the best rates, Kris bravely adopted a radical strategy from the beginning of the year. This Clear Channel station would charge 20% more for their commercials and justify it by making every demo and quote include an interactive SMS call to action. Now her point of difference was ‘Interactive Radio.’ If the client decided not to take the interactive element the price would fall back. In 8 months, the station wrote one million dollars in incremental revenue and in the first half of the year added 44 new accounts, with advertisers calling in to learn about ‘Interactive Radio.’ Kiss FM in Cleveland is indicative of the ongoing success that hundreds of stations enjoy in the US.
But here is the kicker: the staff have to believe in radio in the first instance. If the sellers believe in the medium, then there is nothing to fear when the medium becomes measureable. Adding mobile doesn’t work if sales or management don’t believe in radio in the first place.
My experience is stations can charge anywhere from 10% to 20% more to make radio commercials ‘interactive’ and TV charges about an additional 5%.
Unfortunately like everything, there are some stations who just give it away as a value added service.
Video discussions with some of our customers including Kris Foley can be found here. www.hipcricket.com/clients/customer_testimonials.aspx
Adding Mobile Means:
- Incremental revenue for every radio campaign
- Justify rate increases
- Having answers to every objection to buying radio
- Prove return on investment
- Expand advertiser base
Reaping the Rewards
The bottom line is, SMS messaging works. It can make commercials ‘interactive’ and the process is simple, fast and cost-effective. And it helps build your database and keeps the advertisers coming back for more, because now you can prove ROI.
We work with stations from Clear Channel, NBC, CBS, SBS, Katz Radio Group, Premiere Radio and many more broadcasters.
Hipcricket now works with hundreds of stations, has years of case studies and has executed over 50,000 campaigns. So I am a definite believer in the power of ‘Interactive Radio.’
Returning Home
With the experience of working with hundreds of stations, major groups and blue chip brands all over the US, I am returning home to Australia and can share insights and strategies to build and create new revenue for broadcasters using the mobile phone and SMS messaging as a revenue driver.
After 10 years of travelling I am stepping away from full time responsibilities in the US. I remain a very proud and enthusiastic shareholder in a great US company, but I want to spend my time closer to family and helping radio on this side of the globe realize some of the same success. See you back in Oz soon!
Contacts:
Australian mobile: 0412 357 901.