Burkhard Works - Fear & Ruin in Direct Response Radio

Why? Smart Media Buys!

Car dealers, furniture stores, airlines, and a host of other mainstream B2C and B2B advertisers have cut their budgets to the bone. Many Big Agency media planners who once bought a few low-cost radio GRPs now struggle to stay on TV. Local advertisers are tapped out. Radio accounted for only 7.5% of the national ad buy in 2007. This year it might account for 4% of a significantly smaller pie.

However, the average station still runs 12 minutes of advertising per hour, about 2,000 minutes per week. If they can't sell their own spots at Fixed Position, ROS or remnant rates, they have to run Pro Bono PSA copy or Per Inquiry commercials.

In early 2009, canny Fear & Ruin advertisers wrote smart contracts with networks and station ownership groups. They combined a limited amount of up-front cash with aggressive Inquiry volume & cost targets. They assigned discrete 1-800 numbers to discrete stations, destination programs, and networks. The calls run through third-party metering firms.

General Sales managers now get paid, more or less, by the call.

Do the Math.

A typical Fear & Ruin advertiser averages $1,000 to $5,000 in revenue per customer. They can easily afford to spend 20% to 30% or more on media and convert only 10% of calls to sales.

$2,500 x 20% MCPS = $500 per customer.
$500 x 10% conversion = $50 per call.
$5.00 per gallon (1,000 impressions) = 1 call per 10 gallons.

A canny PI negotiator might offer the radio rep $25.00 for the first 200 calls a month, and maybe $35.00 for any extras.

So the GSM has a choice: run Smokey Bear et al or run yet another Fear & Ruin commercial and hope to squeeze a few bucks out of his otherwise unsellable airtime./p>

The net effect is that the average listener is bombarded with the same message: "Are you Frightened? A Failure? Or Flat Broke? Call Now!"

What Must You Do to Succeed in D.R. Radio?

All the normal rules outlined on The Basics of Direct Response Radio apply in full force. Here are four additional ideas you should strongly consider.

Number One - don't sound like a Fear & Ruin advertiser, even if you are one.

Here's a simple spot I made for Credit Answers. It addresses the core issue on the minds of people who are hopelessly in debt on their Credit Cards - namely, how to get back in the game. (This spot outpulled the Control 4:1 in a measured 2MM impression streaming test. I own it.)

The Party Is Over

Real People Radio is an excellent way to stand out from the Daily Drone of Urgent Announcer Copy. Here's the ideal test campaign (for a Tax Resolution firm): One fusillade and two interviews.

   UTG Intro
   Will
   TTerri

Number Two - don't buy the idea that "Frequency Builds Response."

Frequency builds receipts for radio reps. Frequency can build awareness and brand preference, but it cannot expand market demand for anything.

If your product or service is of value to this week's Steam Heat/a> component of a station's cume audience, you need only buy an Effective Frequency of 1.0 to 1.8 per week to attract a majority of available response.

I'd suggest you run all your 1-800 spots Tuesday through Thursday. You might buy a little more tonnage Week One to introduce your brand, but thereafter you should revisit that station or program no more than once every two to six weeks.

Number Three - when in Rome...

If you can route calls through a third-party metering service, there's no reason you can't combine some up front cash with aggressive Cost per Call targets, too.

Remember, though, you're competing for unsold avails with Fear & Ruin advertisers willing to spend $25 or more per call. If your Thing sells for $150 you shouldn't spend more than $57 in media per sale, so you'll need to covert half your callers to buyers. Have you Slickified your TMs?


Tune in your favorite AM or FM radio station today. Count the Direct Response commercials that sell credit card relief, debt relief, tax relief, mortgage relief, gold, silver, or some other way to escape the financial consequences of the current Recession and the government's unbridled lust for money. The overall Fear & Ruin category now accounts for about a quarter of all Direct Response Radio advertising. A handful of advertisers blitz the same listeners with the same Urgent Announcer Copy 10 to 50 times a day on the same stations. Recently Google has cut off PPC for over 400 "loan adjustment" sites. The feds have closed down a lot of credit card debt negotiators who were, frankly, scamming their customers. Yet new Fear & Ruin advertisers pop up every week, with apparently huge budgets. Why did this happen and how can you compete with the incessant drone of Doom & Gloom?
Why? Smart Media Buys! Car dealers, furniture stores, airlines, and a host of other mainstream B2C and B2B advertisers have cut their budgets to the bone. Many Big Agency media planners who once bought a few low-cost radio GRPs now struggle to stay on TV. Local advertisers are tapped out. Radio accounted for only 7.5% of the national ad buy in 2007. This year it might account for 4% of a significantly smaller pie. However, the average station still runs 12 minutes of advertising per hour, about 2,000 minutes per week. If they can't sell their own spots at Fixed Position, ROS or remnant rates, they have to run Pro Bono PSA copy or Per Inquiry commercials. In early 2009, canny Fear & Ruin advertisers wrote smart contracts with networks and station ownership groups. They combined a limited amount of up-front cash with aggressive Inquiry volume & cost targets. They assigned discrete 1-800 numbers to discrete stations, destination programs, and networks. The calls run through third-party metering firms. General Sales managers now get paid, more or less, by the call. Do the Math. A typical Fear & Ruin advertiser averages $1,000 to $5,000 in revenue per customer. They can easily afford to spend 20% to 30% or more on media and convert only 10% of calls to sales. $2,500 x 20% MCPS = $500 per customer. $500 x 10% conversion = $50 per call. $5.00 per gallon (1,000 impressions) = 1 call per 10 gallons. A canny PI negotiator might offer the radio rep $25.00 for the first 200 calls a month, and maybe $35.00 for any extras. So the GSM has a choice: run Smokey Bear et al or run yet another Fear & Ruin commercial and hope to squeeze a few bucks out of his otherwise unsellable airtime./p> The net effect is that the average listener is bombarded with the same message: "Are you Frightened? A Failure? Or Flat Broke? Call Now!" What Must You Do to Succeed in D.R. Radio? All the normal rules outlined on The Basics of Direct Response Radio apply in full force. Here are four additional ideas you should strongly consider. Number One - don't sound like a Fear & Ruin advertiser, even if you are one. Here's a simple spot I made for Credit Answers. It addresses the core issue on the minds of people who are hopelessly in debt on their Credit Cards - namely, how to get back in the game. (This spot outpulled the Control 4:1 in a measured 2MM impression streaming test. I own it.) The Party Is Over Real People Radio is an excellent way to stand out from the Daily Drone of Urgent Announcer Copy. Here's the ideal test campaign (for a Tax Resolution firm): One fusillade and two interviews. UTG Intro Will TTerri Number Two - don't buy the idea that "Frequency Builds Response." Frequency builds receipts for radio reps. Frequency can build awareness and brand preference, but it cannot expand market demand for anything. If your product or service is of value to this week's Steam Heat/a> component of a station's cume audience, you need only buy an Effective Frequency of 1.0 to 1.8 per week to attract a majority of available response. I'd suggest you run all your 1-800 spots Tuesday through Thursday. You might buy a little more tonnage Week One to introduce your brand, but thereafter you should revisit that station or program no more than once every two to six weeks. Number Three - when in Rome... If you can route calls through a third-party metering service, there's no reason you can't combine some up front cash with aggressive Cost per Call targets, too. Remember, though, you're competing for unsold avails with Fear & Ruin advertisers willing to spend $25 or more per call. If your Thing sells for $150 you shouldn't spend more than $57 in media per sale, so you'll need to covert half your callers to buyers. Have you Slickified your TMs?		Media Cost Per Sale Real People Radio The Basics of Direct Response Radio. Fish Like a Pelican
Number Four - do what you want your own prospects to do. Pick up the phone. (407) 895-3092. I am the only human in America who combines Big Agency media & creative strategy with the bare-knuckle tactics of Direct Response Radio. What you've just learned in the last two minutes is but a tiny fraction of the knowledge, experience and profits I can bring to your table. That number again...