Two stories broke this week. Each from a giant advertising concern. In fact, the same one.
Story #1: Omnicom Media Group Signs $200 Million Deal With IHeartMedia The story is that Omnicom is doubling its spend in radio over last year. It's a powerful story when one of the world's largest ad agencies validates the power of radio. Though you could whine that it's not your company, it's a powerful story for radio, and that will help every radio broadcaster. To quote that WSJ story:
"Radio is still a really important medium to a lot of our clients, especially our retailers," said Omnicom Media Group CEO of North American investment John Swift. "For a lot of our retailers, from a traffic-driving perspective, [radio] complements the rest of its media at a very efficient cost."
Mr. Swift said the increase in investment with iHeartMedia is a reallocation of spending within the radio category among fewer partners rather than a shift of spending across categories.
"This isn't about shifting spend from one channel to another," Mr. Swift said. "It is more about focusing on deeper partnerships with a select number of partners, combined with some growth in spend as well."
OK, so iHeartMedia got a bigger piece of Omnicom's radio money shifted to its radio, digital, and entertainment platform. That may sting a while, but it certainly is great salesmanship by the iHeart team, and especially President of National Sales/Marketing and Partnerships Tim Castelli.
The next step, of course is that every radio company needs to present a platform and show they too have great abilities, and get Omnicom and other agencies to consider upping their spend.
When Bob Pittman came on board at what was then Clear Channel, I wrote a piece saying he would be good for radio because of his vision, his big thinking, and his ability to open doors. This is more evidence. And though iHeartMedia is benefiting now, don't kid yourself: The positive impact of this will ripple across all radio.
What I also find exciting is that iHeart broke new ground. Rather than just selling radio spots, they're selling their whole platform, and "as part of the partnership, iHeartMedia will work with Omnicom Media Group to develop new audio and cross-platform advertising products for the agency's clients and provide research on the efficacy of clients' campaigns." Brilliance. In this world it has to be about giving the clients exactly what they need, not just what we want to sell them.
Story #2 Omnicom Advises Marketers to Move 10 percent to 25 percent of TV Ad Dollars to Online Video The story here, from the same media giant, is that online video is hot and that this major agency is shifting 25 percent of television budgets to online video. The company that oversees roughly $54.4 billion in advertising spending around the globe and advises advertisers such as PepsiCo, Visa, McDonald's, and Apple is showing that it has less confidence in TV and growing confidence in online video.
This isn't important because it hurts television. Frankly, a 25 percent loss of business is a sad thing for any industry. It's important because Omnicom did not shift 25 percent of radio budgets to digital, and because, in fact, the organization just demonstrated its confidence in radio. Again, this is an important story to share with advertisers.
It's important not to miss the larger point of these changes, though. Omnicom is all about what advertisers are asking for and the trends they are seeing. This investment in radio is because iHeart brought a platform that met their needs, including digital radio and customized content. Understanding the whole picture is important when you relay this story to advertisers.
Selling radio is no longer about spots. It's a much deeper proposition. It's very much about your platform, which includes your streams, your digital offerings, your radio product, listening carefully to what your advertisers are asking for, and finding a way to deliver it. It's no longer "If you build it, they will come." It's about, "If they ask for it, you will build it."