Should Radio Stations Risk Selling All Unsold Inventory to Remnant Buyers?

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Advertisers paying rate card for spots get to dictate their scheduling, for the most part. But why is it that remnant companies are requesting, and receiving the same demands?  Paying “something” for every spot seems to be the trick these days. But watch out! The wool might be creatively being pulled over your eyes.

Like all companies, remnant companies are in business to make money. An advertiser that pays rate card for a spot expects a certain level of effectiveness, and a return on their investment; otherwise, they are bound to take their advertising dollar to another station. With remnant, the media becomes the one needing to expect a certain level of return, with little knowledge as to how much money they could be leaving on the table. The remnant buyer is left with the capability to call the shots when buying numerous spots and dayparts. Does this seem reasonable?

The solid option is for the media to schedule Pay-per-Inquiry (PI) spots.

But how could the media benefit from accepting PI advertisers to fill spots that could potentially have no return?  The answer is easy. With all spots sold to remnant companies, a radio station’s sales force is left with NOTHING to sell.  A station should always have a percentage of unsold inventory.  Otherwise, this simply means that the station’s rates are too low and that it is undervaluing its inventory. With the remaining inventory, a station  can run a PI spot and know that the full value is coming their way.

It is unrealistic to think that every spot utilized on a station garners some return in revenue for the client. It is also unrealistic to think that some don’t bring on a much greater return than what was invested for the spot.

With PI advertising, you are in control. You get to schedule the spots where there are holes and dictate what advertisers you run. PI companies depend on station response to make money, so they will always look out for the media. Remnant companies may not be taking that risk, perhaps preying on vulnerable stations.

Regaining control of its inventory is crucial for a station’s healthy future, and PI advertising might be what the doctor ordered.

Adam Zolmierski
Media Sales Representative

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