by Jerry Vigil
In a recent RAP interview with Dayle Honda-Stice, we learned how Dayle took a one-man production department at KZST-FM in Santa Rosa, and turned it into a profit making, fully staffed "in-house ad agency." The new division of KZST was called KZST Creative Services, and it was developed to offer that "something extra" to clients that wanted more than a quick voice over music spot. What makes the division more than a glorified, creative production department is the fact that its services aren't free. If a client wants something special, something better than the spot he'd get using KZST's "free" production department, he pays for it. It was this fee and subsequent profit potential in Dayle's proposal to management that enabled her to get the division off the ground. Within a year, station revenues increased substantially, and KZST's airwaves became decorated with creative commercials instead of boring laundry lists. With the increased revenue, Dayle was able to add several people to the production staff at KZST, buy new equipment, and purchase more production libraries. It was a smart move for the station but probably a smarter move for Dayle. As a result of the many contacts she made, she eventually left KZST and now runs her own successful ad agency in Santa Rosa. Since the interview with Dayle, we discovered another "Creative Services" division, this one at RAP member station WEZF-FM in Burlington, VT. Like KZST Creative Services, WEZF Creative Services has also proven to be a successful revenue generator for the station. It appears that clients do want better spots, and what's more, they're willing to pay for them.
There are several differences between the two divisions at KZST and WEZF, but the basic structures are the same. At both stations, one person more or less IS the Creative Services division. The sales departments at both stations sell Creative Services to attract new clients or beef up the buys of existing clients by offering a concentrated approach to their advertising, and the clients pay the stations for the service.
Probably the major difference between the two stations' Creative Services divisions is in the way the funds are handled. At KZST, salespeople are commissioned on fees incurred by clients which gives the sales staff more incentive to sell the division. At WEZF, salespeople are not commissioned, but they offer a ten percent credit towards Creative Services as an incentive for clients to make larger buys with the station. In both cases, salespeople still have something more to offer their clients. At KZST, Ms. Honda-Stice was commissioned on all purchases of services provided by her department in addition to a base salary. At WEZF, the Director of Creative Services is not commissioned, but paid a better than average salary for a comparable position in the market.
Who runs the show at WEZF Creative Services? Meet Mary Collins-Angier. Her mornings and middays are spent cranking out the creative spots and dealing with the clients of WEZF Creative Services. At 4 p.m. she changes hats and becomes the station's afternoon drive personality. Not unlike Dayle Honda-Stice, Mary is also a veteran copywriter and producer of radio commercials (and also has a hyphenated name). Mary began her radio career twelve years ago in Burlington with WEZF. WIZN (also in Burlington) was Mary's second stop in radio. Mary left WIZN to start her own production company, and, after a successful period of time with this, she contacted WEZF management with a proposal. She presented her idea of a creative services division, and with the bottom line showing a potential profit, she was hired on to do the job. WEZF Creative Services celebrated its first anniversary last month, and, judging from its acceptance and success, it looks like WEZF Creative Services has a long and profitable future.
How did Mary structure the Creative Services division at WEZF? WEZF still retains a production department which is separate from WEZF Creative Services. The production department handles the dubs and tags and takes care of agency copy and clients who are content with spots produced without the creative attention from Mary. Even though the staff of WEZF Creative Services consists of only Mary, the spots she produces utilize a talent bank of over eighty-five people. Mary uses the production staff and air talent of WEZF very rarely.
A rate card is given to prospective clients. Most charges are incurred by the hour. Studio time is $60 per hour. Talent fees range from $50 per hour to $100 per hour as opposed to a "per spot" fee. Mary says this hourly rate usually pays for about two spots per hour. Dubs are $7 each.
WEZF Creative Services offers custom jingles and music beds. Estimates for music composition are given upon request and generally range from between $2,500 and $5,000 per package. For these packages, Mary contracts musicians and singers, and an outside recording studio is used for the actual production of the music/jingle. All other production is done at WEZF.
There is a "copy/concept" fee of $50 per hour. When a client wishes to purchase WEZF Creative Services, Mary joins the AE on a visit to the client. The $50 per hour "copy/concept" fee begins with this visit and includes time spent actually writing the copy.
Year one of WEZF Creative Services showed a profit, even with the 10% Creative Services credit given to clients that signed a large contract for spots. Mary states that Creative Services has in this first year handled, on the average, about ten clients a month. How much money is this? "At this point," Mary says, "Creative Services income has been averaging around $6,500 per month. Some months brought in as much as $10,000, others were as low as $2,000." How much are individual clients spending with WEZF Creative Services? "I'll have clients that will come in, and it'll cost them $400 or $300. Then I'll have somebody that'll come in and have a total campaign effort done for around $3,000."
When you put a calculator to it, WEZF Creative Services grossed nearly $80,000 in its first year. The only expense to the station was Mary's salary. In addition to the eighty grand, there are the numerous clients who bought WEZF because of WEZF Creative Services. Add to this the existing clients who bought more spots because of the better results they started getting from Mary's spots, and you have a pretty good size number, especially when you consider the market size of Burlington (217th)!
Mary went on to tell us the effect WEZF Creative Services has had on other stations in the Burlington market. "In this market, because of the work I'm doing I believe, there are radio stations that are now building bigger studios and trying to draw better talent into their companies. It's really taking off up here."
What future plans does Mary have for WEZF Creative Services? "As the department grows, I'd like to develop a staff and also develop more work throughout our regional network of stations. This is the experimental first year, and they're keeping me very close to home. I see it exploding. It's something that any station or network of stations certainly can do to do an incredible amount of new business and create a new revenue generating profit center for the station."
Establishing WEZF Creative Services required more than just hiring Mary Collins-Angier and printing up some new business cards that said "WEZF Creative Services" on them. The marketing of WEZF Creative Services is handled in the same way an advertising agency would market itself. Complete brochures were designed and printed and given to the sales staff for distribution to clients and prospective clients. On this month's Cassette, you'll hear an edited version of the nine minute presentation produced by Mary for WEZF Creative Services. This presentation is passed out like any literature that sells a station. The only difference is that it sells an aspect of WEZF not previously pushed on their clients. The presentation doesn't sell the ratings. It doesn't sell perfectly targeted demographics. It doesn't sell the super staff of dyn-o-mite jocks. It sells the same thing multi-million dollar advertising agencies success-fully sell to their clients every day. It sells creative advertising.
One page of the WEZF Creative Services brochure reads like this: "There was a time when simple, straightforward production was good enough for most radio advertisers. Well, 'good enough' is not enough for WEZF. WEZF Creative Services is the division of WEZF Radio which creates sophisticated radio campaigns. Under the direction of Mary Collins, WEZF Creative Services provides sophisticated advertisers with the full range of creativity -- concept development, copywriting, voice talent, and composition of original music. Advertisers benefit from the best of all radio worlds -- the creative team to develop imaginative radio campaigns and the marketing consultants to place advertising campaigns most effectively on WEZF, the powerful regional FM radio station. Radio works. And radio works best with WEZF Creative Services."
The next page lays out exactly what WEZF Creative Services offers: "Campaign Production - Includes full campaign development, copywriting for multiple advertisements, outside voice talent, music and sound effects from the WEZF production library. Music Logo Production - Includes production of an original music logo (jingle) with multiple mixes, as needed. Full Campaign and Music Logo Production - Includes full campaign development, copywriting for multiple advertisements, outside voice talent, and production of a music logo with multiple mixes, as needed. Corporate Audio Service Production - Includes all phases of audio production for corporate use: soundtrack, slide show and video presentations including music development, voice talent, sound effects, and duplication of master tapes."
There's one very interesting aspect of having a creative services division. Right up front, from the very beginning of putting together a good spot for a client, it is established that this "good spot" is going to take some time, time the client is going to pay for. How many times do you deal with a salesperson who gives you a production order and says the client wants something really creative, and oh, by the way, it starts tomorrow? Under the umbrella of a creative services division, you are given the time to do the job right. The client expects it to take some time. The salesperson expects it to take some time. And, amazing as it may seem to some, it actually takes some time.
"This Creative Services thing sounds like a great idea," you say. "Why doesn't every radio station have a Creative Services division?" To begin with, at the core of such a division is at least one individual with the creative talent to write and produce very good commercials. If you've ever been a PD, or are a PD that has looked for a talented copywriter/producer for your station, then you know why every station doesn't have a Creative Services division. Another reason might be because nobody at your station has ever considered it, or nobody has been willing to take the time to set it up. Furthermore, such a division does compete with ad agencies to a degree, and there are few managers and salespeople who want to tick those folks off. Finally, there has to be hundreds of managers out there who simply don't understand creative advertising and production enough to see the possibilities. There'll be those that will say to you, "What? I thought you were already giving our clients your best! Are you saying you want to charge clients for what they should be getting anyway?" And you'll hear things like, "We're not in the ad agency business here. This is radio." Or, "Last week you were telling my how you don't have enough time to do the work you have. How do you plan to spend even more time with clients? I'd have to hire somebody else, and that's JUST NOT IN THE BUDGET!" Management will find a ton of reasons NOT to develop a creative services division at your station. That is, they will if you don't show them FIRST how much money the STATION can make. At both KZST and WEZF, a proposal was presented to management that showed the numbers. It showed positive cash flow on the bottom line.
What about those stations that DO have a creative person in production? Why don't they have a Creative Services division? Maybe they do, but instead of it being XYZ Creative Services, it's actually the Production Director's freelance company. If this hits home, consider the advantages of marrying your freelance company to the station's sales force and client roster!
Ultimately and ideally, with such a division at work at your station, the station makes more money. You make more money. You get more time to produce spots. Better spots get on the air. Ratings improve as a result of quality stopsets. Advertisers are happier with the results and your station, and they buy more spots more often. And probably what's most appealing, when you actually realize profits from such a division, you all of a sudden have some serious dollars to spend on things you have yet to be able to get management to fit in the budget -- equipment, libraries, and even that raise! The negative side of this concept is very vague, if existent at all. When done properly, a creative services division seems to simply be one big plus for you and your station.
It's hard to believe this idea is new when it should be as old as ad agencies. In fact, there are probably several stations employing this concept. KZST and WEZF just happen to be the only two we know of. If your station has a Creative Services division like WEZF's and KZST's, we'd like to hear about it. Tell us how it has worked at your station and how it is structured. If this is something that has been going on for decades at stations across the country, it has been kept pretty quiet. You don't read about it in any of the trades, and several people we questioned over the past month had never heard of such a division in a radio station. If it is new, based on the success stories we've received from KZST and WEZF, it's likely creative services divisions will become the next major element of a successful station's structure.
If you would like more input on how to get a creative services division at your station off the ground and make it work, Mary was nice enough to offer her input to anyone with an interest. Give her a call with your questions. She can be reached at WEZF at (802) 655-0093. Also, she adds that her services, as well as those of her talent bank, are available to anyone who needs them. A demo is available.