We learn things from smart people and
Erik Hellum, President of Gap West Broadcasting, is one of those people. Prior to joining Gap West he was VP/Market Manager for Bonneville Phoenix which includes Sports 620 KTAR. Erik shared his thoughts on how radio and Sports Radio can take advantage of new media to build a brand and generate revenue.
RS: What is Gap West (for those that don’t know about the company)?
EH: Gap West owns 56 stations in 12 small to mid-sized markets in the Western United States, including Washington, Montana, Idaho, Wyoming and Minnesota, with headquarters in Scottsdale, AZ. We are owned by Oaktree Capital out of LA, who also owns Gap Central (run by George Laughlin) and Triton Media.
Our focus is simple. Buy stations in small to mid-sized growth markets, where 90% of the business is local and almost 2/3 direct. That way, we can control our business because we are working with the client directly, and not as reliant on transactional agency business as most larger markets are. In that way, we are very similar to sports radio, where personalities, connecting to the community and results for clients mean much more than ratings.
We have a three pronged strategy. First, be the best local radio operator, run great local radio stations, and take the majority of the local radio dollars off the table. Second, extend those brands digitally, offering our listeners many different ways to connect with our station and personalities, and then offer those connections to our advertisers, and start expanding our share of local digital ad dollars. Finally, use the reach of our radio stations to build new digital businesses, taking digital dollars away from newspaper and pureplays. For example, we own saveonthelot.com, an auto portal that lists available local car inventory, similar to cars.com and autotrader.com. The big difference is that we can promote our auto portal 24/7/365 on our stations, and our local account executives have strong ties to the local car dealers. Our initial rollouts have been a big success and have shown us that we really can grow new digital businesses.
RS: Why are you such a huge proponent of extending the product through other channels?
EH: Three main reasons. First, our listeners are consuming content in dramatically different ways than they did a few years ago. We need to catch up with them, and at some point, get in front of them. At one point, radio had a lock on providing great audio content. We don’t anymore and aren’t innovating as quickly as we should. The IPod beat us to the punch at 21st century music discovery. We weren’t the first to the table in podcasting. We streamed, then stopped and then started again, while AOL, Pandora and others grabbed share in this space. We have to be the audio content provider/leader in every way imaginable. Or we will get left behind.
Second, these “other channels” allow us to build our brands, by providing the listener more of what they want when they want it. Using sports radio as an example, in addition to airing 
great sports talk over the air, if you can also provide separate podcasts, personality blogs, online sports news, text/Twitter breaking sports news, sports audio search and more, you aren’t just a sports/talk radio station, you are THE sports brand in the market.
Third, while I believe that radio has a strong future, there is no question that ad dollars are quickly shifting to digital, which just surpassed radio in total ad revenue in 2008. If we want to grow our business, we have to take a larger share of local digital ad dollars. Right now, we are taking about 1% as an industry, while TV gets 9% and newspaper over 25%. That’s crazy, and we have no one to blame but ourselves. But it’s not too late. We just need to move very quickly and smartly to catch up.
RS: What are the ways you are doing that now with your radio stations?
EH: Most radio companies seem to be focused on the basics, but then find other ways to drive online audience and revenue. Like everyone else, we have station websites, stream our content live, and sell banner advertising, on line sponsorships and in stream commercials. In addition, we have worked with Mass2One (A Triton Media company) to build our database with a VIP Program that offers listeners various prizes for points that they accumulate. It’s a frequent listener program, and we have quickly built our database to almost 10% of our total cume. Listeners can redeem points for client provided prizes, and our clients have gotten great results with the program.
As I mentioned earlier, we are also building local digital businesses like saveonthelot.com, and will soon be rolling out lifestyle-based community portals in most of our markets.
RS: What is the response you are getting from advertisers about the digital opportunities your are offering them?
EH: Three different types of responses from three different types of clients.
The first type is the client who is already buying digital advertising and is glad to see radio get into the game and offer new solutions and an alternative to the local newspaper site. Their response is a combination of “what took you so long”, “do you really know what you’re talking about because I do”, and “glad you figured it out and are bringing this new solution to me”. With this type of client, you better be well trained, know your product and know what it can do, because they will chew you up and spit you out if you don’t.
The second type is the client that has either bought limited or no digital media, but knows that they need to learn it and make it work for them before their competition does. This type of client provides great opportunity, not only because they are interested in what you are selling, but because if you can really train them how to use digital media and help them get measurable results, you can control their ad budgets moving forward.
The last type is the client that isn’t interested in digital, is comfortable with what they are doing and doesn’t want to change. You don’t give up on this client, however, because you are still selling them traditional radio advertising, and when they are finally ready to buy digital media, hopefully you have positioned yourself as the resource and they will come to you.
Bottom line is you need to be well trained, know your product and understand how to help the client get results with it.
RS: With so many opportunities - it’s almost paralyzing trying to figure out where to start – how do you determine what you want to do and how you want to do it?
EH: Start by doing the basics well. Make sure that your team is trained on digital media and how to use it. Then, pick something bigger, like the database, or a sports portal, and do it really well. This boosts confidence internally, gives your listeners something new and exciting and shows your clients that you know what you are doing. If you do this, each time you roll out a new digital product, it gets easier and easier.
RS: You are a big fan of the Sports Radio format – and digital media and feel it is a great match. What are some of the opportunities you see for Sports Radio on the digital frontier?
EH: In the sports radio format, there are unlimited opportunities. But I would focus on two main things.
First, your goal should be to become THE local sports brand in your market. What ESPN is nationally you should be locally. The newspaper is cutting back on local coverage and many columnists have been cut. They are losing ground in this battle. Local TV is losing ground even faster. Their focus is local news, weather and traffic, and they have cut back on sports resources because they know they can’t win this game. But you can. With great sports/talk, the best sports media personalities in town, a strong network affiliation, play by play coverage, podcasts, blogs, breaking sports news on text and Twitter, sports radio should be the focal point of local sports. And when the internet is in the dashboard, even better. If a sports fan anywhere in the world wants to know about Phoenix sports, there is no better place to find out what’s going on than to listen to KTAR-AM.
Second, think of your content like sports teams and ESPN do. Create as much unique, entertaining, and compelling content as your resources will allow you to, offer that content as many ways as you can possibly can (radio, streaming, online video, text, mobile websites, etc), and then sell inventory across all those delivery systems. That’s why Bud Selig is making $13M per year. Not because the game of baseball is better than ever. But because the business of the baseball is better than ever.