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Facing tough economic conditions in the new year, Katz Media Group took two major steps Thursday (Jan. 8) to improve the national spot radio business and trim its costs.
In addition to laying off about 122 staffers (about 8 percent of its workforce), Katz also announced the creation of a new group dedicated to leverage multi-platform radio campaigns for advertisers.
Part of the impetus for the new group, called Katz Marketing Solutions, was the new, dominant size of Katz’s radio representation portfolio following the demise of Interep. At the end of last year, Katz picked up all the major radio groups formerly repped by Interep including groups such as CBS Radio, Entercom Communications, Lincoln Financial Media, and Beasley Broadcast Group.
Led by Bob McCurdy as president, Katz Marketing Solutions will work with national advertisers and agencies during the planning process to create innovative and customized campaigns across all audio channels. The new unit has a similar mission to the one Katz created last year for the Clear Channel Radio Sales division, but broadens the service to all the radio groups now under the Katz rep umbrella.
Stu Olds, CEO of Katz, to whom McCurdy reports, sees the formation of KMS as critical to lifting an ailing national spot radio market and making radio easier to buy across all platforms, whether online, HD side channels, or mobile.
“We have a responsibility to the grow the industry at large,” Olds said. “There has been so much fragmentation, some advertisers haven’t been able to harness [all of radio’s platforms], so we needed to consolidate. We can bring advertisers 90 percent of the radio stations in the U.S. and provide customized solutions quickly, efficiently and effectively with a one-stop solution.”
While Katz may have cut staff, KMS is earmarked for growth and some newly-created positions that have yet to be filled. The group intends to hire an analytics expert to help advertisers determine spending effectiveness and return on investment as well as an executive to head up planning. KMS also intends to partner with research firms to provide customized studies to demonstrate success using metrics that match the advertiser’s marketing goal for the campaign.
“With our creative tactical solutions for advertisers, we need to quantify success. Any medium that is not accountable will be underappreciated,” McCurdy said.
Katz already has a track record producing a number of breakthrough campaigns for clients such as NBC, Verizon Wireless, and Walmart that expand the standard definitions of radio inventory and tap into other radio platforms. The goal is to make those customized solutions standard practice.
“We are responding to a marketplace and trying to transform our offerings in this climate,” Olds said. “There is no single solution. Radio has done a lot of work to get itself in a better marketing position, but it’s been hard to harness. We want to help change the direction of the business.”
A turnaround won’t be easy. In November, the Radio Advertising Bureau reported that national spot tumbled 24 percent. In 2009, Wachovia Capital Markets’ Marci Ryvicker’s forecast radio could be down by as much as 13 percent overall with national down 17 percent, and even that she said, “may be too optimistic.”
