November 26, 2012
As we noted in the preceding Power Player interview, Jerry Lee has already accomplished enough in radio to last several career lifetimes. (If you missed the first part of his interview, click here.) Yet even though he is quite content to oversee just one â€“ albeit extremely successful â€“ radio station, the legendary WBEB (B101)/Philadelphia, his interests focus on the benefit of the entire radio industry.
Enter the "Engaging Commercial" Initiative. Lee has come up with an innovative proposal that will not only make his station's ad revenue grow significantly, but could fuel an industry-wide revenue renaissance. Here, he offers details to this unique vision.
Please talk about your "Engaging Commercials" Initiative...
In 2007, Gallup and Robinson did a study of "Engaging Radio Commercials" and how they compare to "Engaging TV Commercials." They found that the very best radio commercial is slightly better than the best TV commercial in engaging the audience and selling the product.
But the really good news is you can buy radio advertising for much less than half of the cost of TV. We are now making the case to advertisers that an Engaging Radio Commercial produces more than double the sales of an Engaging TV Commercial.
In working with Dan Hill, President of Sensory Logic and a recognized expert on the role of emotions in consumer behavior, we have found that there are three categories of Radio and TV commercials in terms of sales effectiveness.
Engaging Commercials â€“ according to a 2007 study by OMD, Engaging Commercials produce about eight times the results of a Non-Engaging Commercial. About 20% of all National Radio Commercials are Engaging.
Non-Engaging Commercials â€“ a commercial that fails to involve the listener. About 50% of all National Radio Commercials are Non-Engaging.
Promising Commercials â€“ a commercial that has the basic ingredients of an Engaging Commercial, but needs an extra little push to really bring it to life. About 30% of all National Radio Commercials are Promising.
What kinds of things make the difference between an engaging and a non-engaging commercial?
When you hear a commercial that has only one voice, 93 times out of 100 it isn't Engaging. The 7% of the commercials that are Engaging, are because of a very unusual or intimate voice, or it's a very believable testimonial.
Any commercial that starts with price is Non-Engaging. It could work for someone in the market for the product or service in the next few days, but after that the commercial does nothing to build the brand.
Do you have case studies to illustrate that?
We created an Engaging Commercial for a local auto dealer in Philadelphia. In less than six months, he became the #1 regional dealer for his brand.
His competitor came on the air with us, outspent him by 25%, but could not overtake the #1 position or even come close to it. The reason was quite simple: His commercial was all about price. Remember this when you hear your next car dealer commercial that starts with price.
The World Advertising Research Center in London is the central repository for what works and doesn't work in advertising. Four years ago, I was searching for an answer on something I was working on and stumbled across an article on facial coding and how it can measure Engagement without being intrusive. The article was by Dan Hill. I called him and asked him to visit me the next time he was on the East Coast.
Facial coding is based on a discovery that Charles Darwin made and was later confirmed by Paul Eckman, an eminent researcher at UCSF -- every human who has ever lived has the same facial expressions â€¦ even people born blind.
You record the facial expressions of the face; the key to facial coding is there is no thinking involved. Your reaction is spontaneous. In comparison, when you ask people to think about why they like or don't like your commercial, you can be sure that you are going to get a biased answer.
The only other method to accurately determine if a commercial is Engaging is fMRI. That's when you put a person into a tube and measure their brain waves while they are watching or listening to a commercial. Unfortunately, it is highly intrusive and very expensive.
I went to Dan Hill and asked him how accurate he was, based on his years of observation as compared to actual facial coding. He said he is never wrong in judging a Non-Engaging Commercial against an Engaging or Promising Commercial.
But he may be wrong between an Engaging Commercial and a Promising one.
I asked him to train two other people to do what he does, based on the principles of facial coding. As a result we now have a cost-effective system of judging commercials. If the client insists, we will spend the money to also Facial Code the Commercial.
So exactly how would this work?
A copywriter uploads a script or finished commercial over the Internet and three people who have been trained in the principles of facial coding review the commercial. If one comes up with a different rating than the other two, they duke it out to come up with the final rating of the commercial.
We just had our trio of experts rate the commercials for the 10 largest radio advertisers in Philadelphia for the year 2011. The results: Two were Engaging, four were Non-Engaging and four were Promising.
Can you imagine what would happen if the radio industry offered this as a service, free of charge, to the top-100 advertisers? Instead of 20% of the commercials being Engaging, you can get well over 90% of radio commercials that are Engaging.
Compare this with national TV commercials, which are Engaging about 35% to 40% of the time.
Dan Hill developed a webinar training system for copywriters to keep them focused on the principles of Engaging Commercials. B101 has copywriters throughout the U.S. who have gone through the webinar and can produce Engaging Commercials almost 100% of the time.
What kind of financial investment ballpark are you talking about to make this happen nationwide?
In radio, you can produce Engaging Commercials in the $5,000 to $10,000 range. This is a great advantage that radio has over TV. Once in a while, if you get lucky you can produce an Engaging TV spot for under $100,000. It usually costs from $250,000 to $1,000,000+ for an Engaging TV Commercial.
Exactly what are you suggesting Radio should do?
Radio should do the following: Make an offer to the 100 largest advertisers in the country that we will, at no charge, create Engaging Commercials for them â€¦ or if they prefer we will work with their agency to produce an Engaging Commercial.
We then go to all the radio stations and ask them to contribute 5% of all increased billing due to this effort, to fund this. We use this new found money to not only produce and test Engaging Radio Commercials, but we use this money to promote the radio industry.
The beauty in this system is that stations are giving up 5% of billing that they don't now have and never will have.
Has a similar proposal ever been implemented before?
About 60 years ago, Las Vegas put a tax on hotel rooms. They had the foresight to designate all the money from the hotel tax to be spent only on the promotion of Las Vegas. The more people who stay in Vegas, the more money they have to bring even more people to Vegas. This is a perpetual money machine. We can do the same thing for radio â€¦ what do we have to lose?
Have you been able to convince local advertisers to try this out?
Absolutely. Some people will always be somewhat resistant to change, so for now we're mainly dealing with direct accounts or with in-house advertisers. When you are dealing with the owner of a business, it is a whole different animal. They see what we are doing as a way to grow their business.
On the National Basis we intend to focus on Brand Managers. They are the closest thing to an owner of a business.
Here is a great example of the success clients have had with this initiative:
We have a client in the food industry that was running a Non-Engaging Commercial. After working with our team to develop Emotionally Engaging Creative, they came back on the air with us, advertising the giveaway of a trip for two to Italy â€¦ the same trip they had given away two years prior. The only difference was the Creative. That Creative was the difference between them receiving about 700 entries for their vacation giveaway with a Non-Engaging Commercial to upwards of 15,000 entries when running an Engaging Commercial. This was in addition to growing their sales by 11% with the Engaging Commercial. That is the power of Engaging Commercials!
We have three new clients that will be starting programs with us in 1st quarter of 2013. I'd like to come back to you in April to talk about their success stories.
Exactly when do you determine whether a commercial is working or not?
We have two ways of measuring that. The first is an upfront agreement with the client outlining what success would look like for them. We collectively determine a measurement system (i.e. sales vs. last year) to evaluate the success of the campaign.
The second way is through something we call "Top-of-Mind Awareness." Since 2005, we have been asking people, on a quarterly basis, questions such as, "When you think of supermarkets, what's the first supermarket that comes to mind?" We do this for all major categories. We have an enormous amount of data on all of our major advertisers. So when we run a new commercial for, say, a supermarket, we can see within 60-90 days whether that spot has prompted a major shift in awareness for the client. Top-Of-Mind Awareness is a predictor of future sales.
Say a majority of stations start filtering their spots through this initiative. Are you concerned that if all these stations start airing commercials with the same "engaging" characteristics, a general 'sameness" in them might blunt their effectiveness over time?
The best way to answer this is to compare it with an accomplished painter. They get a formal education on the basic principles of painting. All educated artists get basically the same grounding on fine art. It's their individual genius that makes a difference.
With our Webinar, we are laying out the fundamentals of copywriting. It takes the innate genius to make Engaging Commercials.
If this does work out, will you have to add to your trio of experts to analyze what could be a glut of spots?
Dan Hill will train as many experts as we need. That's a nice problem to have!
So who takes the first step in getting everyone together on this? Do you want interested parties to contact you directly â€¦ or would you like the RAB to be "ground control" for putting this together?
I plan to send your interview with me to all of the group heads and ask for a phone call to discuss, in depth, how we can move the Radio Industry forward. And yes, I very much want the RAB to play a role in this, along with Katz and McGavren.
Obviously, currently you're very invested in getting the "Engaging Commercials" Initiative off the ground, but what about the long term? Can you see yourself acquiring more stations, or conversely, can you see a time when you'll decide to finally call it a day in radio, to just sit back and enjoy the fruits of your labors?
I love radio. I have no interest in acquiring more stations. I do plan to put all of my energies behind Engaging Commercials. That is where the gold is!
Jerry Lee is willing to answer your questions about the "Engaging Commercial" Initiative. Send them here, and he will answer as many of them as possible in AllAccess.