Aiming to increase ad rates for inventory it was selling at deep discounts, Entercom on Tuesday announced its entry into the network radio business via a new unwired network. Entercom Audio Network won’t involve increasing spotloads at its radio stations, the company says. Rather it intends to regain control of inventory that it had been handing over to third party resellers and offer it as part of a new national platform.
Speaking to investors during Entercom’s first quarter results call on Tuesday, CEO David Field said the network will allow the company to “meaningfully enhance our yield by transitioning out of a poor sales channel and shifting that inventory into higher value channels,” which also include a still-under-construction national business development initiative.
The company says Entercom Audio Network will allow it to capitalize on its scale of 235 stations and reach of 112 million monthly listeners to participate directly in the $1 billion network radio business. Entercom says the new network will launch July 1st. Chief revenue officer Bob Philips says it will give brands “the national scale they need, including seamless activation and superior ROI.”
Increasing yield for its inventory is one way Entercom hopes to grow revenue to fulfill the promise of the company’s merger with CBS Radio. Stepping up advocacy efforts on behalf of both the company and the industry is also part of its strategy. Next week, Entercom will begin a second wave of a marketing campaign in the form of a new multipage ad buy in AdAge and other influential advertising trade publications. It follows the “Marketer’s Guide To Radio” campaign that ran in December in AdAge, Adweek, Variety, The Hollywood Reporter, Billboard and Broadcasting & Cable.
Field and iHeartMedia chairman and CEO Bob Pittman have long preached that radio is grossly undervalued by advertisers, despite its Nielsen-certified status as the top reach medium. Part of Field’s hang-with-us message to investors was that some advertisers are slowly waking up to the fact that they have overlooked radio and how it can help drive results. “As advertisers become increasingly frustrated with their other media options, which are being highly disrupted, we believe many advertisers will consider shifting more dollars into radio to capitalize on radio’s reach, ROI and other compelling characteristics,” Field said. “I am cautiously optimistic based on the conversations we are now having with senior decision makers across a significant number of marketers that the opportunity for radio to grow its share of their ad spending is real and significant.”
The new unwired network, the company’s national client development teams and other vehicles will put it in a position “to develop a substantial amount of business and grow outside of this industry,” Field said with an eye toward that becoming reality starting in the second half of the year.
Like Beasley CEO Caroline Beasley did on her company’s results call earlier this week, Field predicted better days ahead for the overall industry once iHeartMedia and Cumulus Media emerge from bankruptcy protection. “A heathier industry is a more rational industry and an industry that does a better job of taking advantage of its opportunities to compete more effectively with others,” he said. “It is a good thing for the industry and a harbinger of things to come.”