Frank Eriksen: President of Creative Radio Productions, Boulder, Colorado, "A Radio Only Advertising Agency"
by Jerry Vigil
A "radio only" advertising agency? You probably figure this is just another name for a production house that writes and produces radio spots, right? Wrong. This guy makes the buys and takes the 15% commissions, too. This guy is Frank Eriksen, sole proprietor of Creative Radio Productions in Boulder, Colorado. A mixture of creative talent, good business sense, and an entrepreneurial spirit appear to have Frank and his "radio only" ad agency off to a great start.
R.A.P.: When did you get into radio and how did you develop your production skills?
Frank: I got into the business in May of 1978 in Aspen, Colorado. I worked in Aspen for about ten years. While I could have gone to larger markets, playing the game of packing a suitcase every two years, I loved living in Aspen. I was working at a great radio station with super numbers and was having a lot of fun, so I stayed. Later on, they hired a Production Director, but he was more like a person who just shuffled paper between the sales department and the jocks who were assigned the production. All the air personalities, including myself, were expected to carry their load of the production. It wouldn't be uncommon to cut four or five spots in a day.
R.A.P.: So, you basically had about ten years of jocking and producing in Aspen when you decided to start your own business.
Frank: Right. The business itself actually started three years ago, on January 23rd of '87 to be exact. The opportunity to start my own company just came along, so I started doing it part time. I was doing the morning show, so the hours worked out perfectly. I'd be in at six and out of the station at ten. My agreement with the station at this time was to do my four hour morning gig without any production responsibilities whatsoever. The rest of the day, I operated my own company.
In the beginning it was OK. I wasn't really all that serious about it -- I mean I was and I wasn't. My first clients, naturally, were the different retailers and shop owners that I had already done spots for. When I started the business, they wanted me to continue to do their production. I told them what I was doing and that I would have to charge them a nominal fee, and nobody was opposed to it. I started the business that way. The money I was making from the radio station paid all my bills, and whatever I picked up on the side in my production business was kind of like fun money. Then about a year ago I decided I should do this full time if I'm ever going to turn it into a success -- you know, find out if it's going to fly or it's going to die. So I left the station and jumped into it full time on Thanksgiving Day of 1988.
R.A.P.: Was the idea of a "radio only" advertising agency something you had thought about, or was it just a realization of "Hey, this is what I've got here"?
Frank: More the latter. When I started out, I was going to do my own full service agency. I was doing print and TV commercials and an occasional video marketing tape for some clients, but starting out as a one man show, it was just too much to cover. I knew nothing about print. I knew nothing about layout and design, and the costs became a little too prohibitive, at least in a small town like Aspen.
Sometimes, when you start a business, it eventually has a little mind of its own, and it eventually will show you what it should be doing. That's sort of what happened with this. This little mind said to me, "You really know radio. You do 90% radio and 10% other things." I thought, "Why even mess around with that other stuff? Just do what you're good at, what you know best, and devote all your energies to that end." So I did.
R.A.P.: You recently moved to Boulder. How much would you say the business has grown in the past year since you left the station and moved to Boulder?
Frank: I don't know if it has grown all that much. It has been pretty much on an even keel, maybe because of the economy or because I've moved the business to Boulder. So, I wouldn't say the business has grown, but it has been steady over the past year. I didn't see any growth potential in Aspen. In fact, I saw just the opposite. I thought if I really want to make this thing fly, I've gotta go to a market where there's a lot of business going on. I figured I had to go where there was more opportunity. There's more competition too, but competition I can cope with. The move to Boulder was on December first of '89.
R.A.P.: What are you using for a studio?
Frank: I was using the station's studio to start out with, and in September of '88 I got all my own equipment. I got a really great deal. In Aspen each year, they have this event called the Aspen Music Festival which is a festival of classical music and jazz. Top musicians and music students from all over the country attend. At this festival, they record everything they play, henceforth, they have their own audio department and they get tons of equipment donated by manufacturers. In the end of August, at the end of the festival, the festival sells all that equipment, with literally two months of use on it, at dealer cost. I just stumbled across this. I went out and bought a Tascam Studio 8 mixer and 8-track recorder, a little compressor/limiter, a Tascam 2-track, a couple of JBL speakers, a Yamaha amp, and I think I paid six grand for all that stuff. It was basically brand new, out of the box.
R.A.P.: What do you think of the Studio 8 from Tascam?
Frank: I like it a lot. I've had it for a year and a half now, and I'm still getting used to the equalization on it, but it's a super recorder. The DBX that's built in to it really cleans up the sound. I don't think it can be beat. Obviously, you can go into bigger machines with ½-inch tape, but I don't notice the difference that much. If you're recording music, then maybe you'd want to step up to something bigger like the ½-inch machines, but for what I'm doing, which is production music, sound effects and voice, it's real adequate. It's a great board if you're just starting out and you don't want to drop ten grand on a console and another ten grand on an 8-track recorder.
You really need eight tracks. The little 4-track stuff just isn't going to work; four tracks just isn't enough. With the Studio 8 you can put your own little studio together, with a couple of outboard effects units, for between seven and ten grand.
R.A.P.: Do you have your business away from home?
Frank: No, my office is in my house. It wasn't so in Aspen. I had a separate office there. When I moved to Boulder, I was going to set up a separate office someplace, but I decided what I really wanted to do was find a place big enough and try working right out of the house. I found a place and set up the office and studio inside the house. Now, I don't have to get up in the morning and drive to the office. I'll have to do that as things grow and I start adding some people to the staff, which is one of my goals for the next year, but for the time being, it's great. Last Friday night, I went to bed and woke up at 2:30 in the morning. I was wide awake. I decided if I'm going to be awake anyhow, I might as well do something. So I came into the office, turned on the computer, and started writing up some proposals and kickin' around a few ideas. There's no way I would have left the house to go to an office in the middle of the night.
R.A.P.: How have the other agencies in town accepted you as a "radio only" agency? Have you had any kind of confrontation with other full blown agencies questioning your calling yourself an agency when you only handle radio?
Frank: No, not at all. Occasionally in Aspen, they'd go, "Oh, you're an agency now?" or something like that. But it doesn't matter what you call yourself, it's whether or not you can get the work done and do the best job at the best price. So if there has been any of that, I can't remember it.
R.A.P.: Where do you feel your creative talents lie?
Frank: I'd say with the writing. If I went to work at a radio station, I'd be working more closely with the sales department than with the programming department and all their sweepers, promos, hot edits and so on. That's not necessarily my thing. While that's fun to do, and I have a lot of respect for those guys that do those incredible promos and sweepers that you hear on the air, the thing that really gets me going is writing copy for commercials -- clever copy, clever dialogue, using sound effects to put that 30 or 60 second movie together. That's what gets me going.
R.A.P.: What do you do for voices now that you don't have a lot of jocks hanging around?
Frank: I do a lot of them myself. Plus, down here you have a hundred jocks. I've already contacted a couple of the air personalities around here, both male and female. There's a real good talent bank in the area.
R.A.P.: You do place the buys for your clients, right?
Frank: Right.
R.A.P.: Radio rates in Boulder are much higher than they are in Aspen, so is it safe to assume that your income, based on a 15% of the buy, will increase considerably simply because of the move to Boulder?
Frank: Yes, but right now most of the business I'm doing is in Aspen. I'm still new down here, so I'm just beginning to pick up new business in the area.
R.A.P.: How do you get ratings reports and research information for the market, things you need to help you place the buys?
Frank: I can get any information I need right from the radio stations. They're more than happy to show you the Arbitrons. Plus, if you've worked in a market, you know what's going on. You know what stations are being listened to and what their audiences are like. The key now is not so much the demographics as much as it is the psychographic makeup of the audience. Any station that is worth its salt, now also has all kinds of psychographic data to share with you. They've got all the info. All you've got to do is pick up the phone and they'll fax it to you.
R.A.P.: When pitching clients on your service, are you pitching campaigns or single spots for a weekend sale or some other one shot deal?
Frank: A little of both. With the Boulder people, I've been trying to sell more campaigns, especially when I go see a new prospect. They shouldn't go on just for the weekend. That's not how radio works best for the client. I'll go in there with an idea or a campaign that can be taken over several months. That shows them that you want to work with them on a long term basis, and that you're not there just for the quick weekend sale. Although, you can't turn down that business either.
R.A.P.: What major obstacles have you encountered in this new business?
Frank: When I started this thing, I knew that I could write good copy, I knew I had a good voice, and I knew I could do nice production. The first thing I had to face when I started really going on my own was that I knew nothing about sales. That was a real shocker. I guess for the first six months I went through a period where I could not get any new business. I was pitching a lot of business, and a lot of my problem was competition from other agencies. I would go in and tell them that I just do radio and to use these other guys for their print or whatever. It wasn't that these other agencies were going in with a bigger total campaign, although that sometimes was the case, but I couldn't get the account and I knew that my creative was much better. I'd hear their spots on the air, and it was just the worst stuff. Anyhow, I just kept losing the business.
So, I finally sat down with a friend of mine, a very successful, older gentleman who made his fortune in sales, and I said to this man, "David, I'm out-creating these guys by a wide margin and I can't get the business! What the hell's wrong with me?" And he said, "Hey, they're not out-creating you, they're out-selling you. You'd better learn how to sell." He said, "Nothing happens as far as your production company goes until you make a sale." Sales is really the key to this whole operation. Until you can start selling people on the idea that you can produce their radio commercials, you won't produce any commercials because nobody wants to buy them. Sure, I've got a great voice and can produce great spots, but how can I convince other people I can do that? Well, I'll play them the spot, I figure. How do I get in the door? Well, I don't know. How do I close the sale? I don't know.
So I started studying and learning about sales: How to make cold calls; How to call up people just to develop prospect lists, whether it be names out of newspapers, television, or listening to commercials on the radio; literally making dozens of cold calls and trying to get the appointments. Then I'd go in, meet with them on a first time basis, not trying to sell them the first time out, but just getting the opportunity to create some spots for them and go back later.
R.A.P.: You mentioned bringing some people on staff. Would they be for sales?
Frank: YES!! As much as I've been studying and as much as I've been at it, I'm thinking that what I know best is production and the business end of it. In fact, today I'll be calling some of the Denver papers and placing some ads for sales people with broadcast backgrounds and see what happens. I'm going to get somebody on the street full-time whose knows sales and whose livelihood totally depends on that. There's an interesting thing about sales: The theory is that you're either good at selling tangible products or intangible products. Naturally, radio production and advertising is intangible, and when you're out of your element you have a struggle. I've tried to do everything, and I realize that I'm not very good at sales, not as good as I'd like to be. I'm not as good as I need to be. So, I'm going to try and find somebody that is and pay them a 20% commission or 25% if that's what it takes to bring in the business.
R.A.P.: Would this percentage be of the 15% agency commission?
Frank: Twenty percent of everything. Whatever they bring in: Production fees, media buying fees, or both.
I charge a production fee on top of the media buying fee, but when you're just getting started you have to be ready to negotiate on the spot. Say you're pitching a big client and they say, "We like your stuff, but if we just go with the radio station we don't have to pay a $500 or $600 production charge. They'll do it for free." Now if all this client is going to spend is a thousand or two, fifteen percent of that is three hundred bucks. You don't want to give yourself away. But if they're going to drop ten or twenty thousand or more on a campaign, and you're going to be handling the media buying, you need to be ready to negotiate on the spot. That's up to the individual how they want to work it. Most agencies farm out the production, and the client ends up paying for the production on top of the 15%. Different agencies have different deals. Some are just on a commission basis, others add on production costs and other creative time spent. You have to look at your own individual market and see what the market will bear. If nobody will pay extra for production, and you want to start your own agency, you may have to go the route of just doing it for the commission. If you can do that and make a living, that's great. But if you want to have your own studio, you have the cost of the equipment, office space and a staff. You either have to have huge accounts that are bringing in huge commissions, or you've got to balance it out by charging for the production.
R.A.P.: Do you find yourself producing a lot of spec spots?
Frank: Yes. I went through one stage where I said, "I'm not going to produce spec spots. That's a waste of time. I'm just going to go in and talk to these people and if they're not ready to do something, then to hell with them." Well, I had to change that attitude real fast. The thing about spec spots is that if you target some of the big businesses -- whether it be banking, the auto industry, hospitals or the real estate market -- if you do a really good spec campaign and they don't buy it, you can take the same campaign to somebody else and just change the name. You always have something you can peddle around until somebody buys it.
R.A.P.: How do you pick your clients? Do you listen for a bad spot on the radio?
Frank: No, I've been basically going after people that aren't on the radio. I figure people who aren't using the product are the biggest source of new business. So I go through the newspapers looking for people placing half page ads and full page ads. Many times they've never been approached about radio. It's just that the newspapers got to them first. Or maybe they tried radio in the past and had a lousy spot or a lousy account executive -- Whatever it was, it didn't work for them.
Sometimes they find me, but more often than not, I've got to go out after them. It's prospecting. There are a lot of places that you know are going to use radio: car dealers, restaurants, furniture and appliance stores. Sometimes it just takes going in there and really selling them on radio first. If they're on radio already, then it's selling them on the fact that you've got a better mousetrap.
In sales you occasionally run into somebody who is just a jerk. They know it all and they're real happy with what they've got, even though you know they're doing no business. They don't want to talk to you. Fine. You move on to the next guy. But with most people, you can approach them in the right way and say, "Listen, I can put together a campaign that's going to send your sales through the roof." Now, they gotta listen to you for that. You may be full of it, but what if you're right? So they've usually got a few minutes to give you the essential information you'll need to put a spot together, and they'll give you a few minutes when you come back with the spot and their campaign.
That's the way I approach it. I get in for the first time and talk about what their needs are. I don't ask them what kind of business they're doing right now, but I ask them what kind of business they'd like to do. If you say to somebody, "How much money are you making right now?" they'll react as if you're invading their privacy. But if you say, "How many cars would you like to be selling?" they'll say something like, "Well, I'd like to sell seventy cars a month!" which means he may be doing fifty or forty. Then you say, "Well, if I can come up with a campaign that I'm pretty sure will get you up to that seventy cars a month, would you at least be willing to hear it? Would you be willing to listen to my ideas?" No one is going to tell you no unless they're absolutely out of their minds. If they do, you know you never want to talk to that guy again, anyhow.
So you produce the ad and go back in and say, "Here's the campaign I put together that's going to get you your seventy cars a month." They either fly with it or they don't. This is also where the selling comes in. You know you've got a good campaign. You know if it were on the radio with the right budget, it would work. A lot of clients are simply afraid. They're afraid to spend the money. You've got to sell them on the idea that it'll work.
If you come up with some great ideas, and you believe in yourself, just keep at it. Keep your costs low, refuse to let the inevitable rejections get you down, and you'll do OK.
R.A.P.: What's your typical work day like?
Frank: It usually starts around 8:30 or 9:00. Mornings are when I tend to make most of my phone calls. Afternoons are devoted more to seeing potential clients and doing my writing and production, which very often goes into the late night hours. Some days I'm totally involved with selling, no production whatsoever. I work almost every weekend, too. Weekends are when I get caught up on paperwork and try to kick around some creative ideas for projects that aren't due "right now." Sometimes projects are due "right now." I might have a presentation to do on Monday morning and I haven't had a minute to spend on it the previous week. So I have Saturday and Sunday to come up with whatever I need to come up with. It's a good twelve hour day some days, and others I'm sitting around twiddling my thumbs.
Some days you just don't have the energy. You know those days, they come along every once in a while. That's when I say, "Hey, it's one of those days. Put your answering machine on and get out of the office. Go to a movie, ride your bike, have lunch with a friend, and don't worry about it." Then I get up the next day, the creative juices are flowing again, and I get back into it.
R.A.P.: Are you driving back and forth to Aspen a lot to handle the accounts you have there?
Frank: No. I use a fax machine and Fed Ex. A fax machine is essential. As far as time goes, it is so much easier and faster, even with a client that's just across town, to just fax them the copy.
R.A.P.: So you added a fax machine to your inventory -- anything else?
Frank: I also added on a new CD player. I have a production library with indexes on the tracks, and my old CD player wouldn't read indexes. So, I went out and did some work for a stereo store and traded out a new Technics CD player. I also invested in a Nakamichi cassette deck, a Valley 400 mike processor, and the Alesis MidiVerb II. On my wish list is the Eventide H3000B Ultra Harmonizer, an Aural Exciter, and some outboard equalization.
R.A.P.: What do you use for production music?
Frank: I have FirstCom's library. Not their new one, but the one before it.
R.A.P.: What kind of a deal did you work out with them since you're using it on several stations?
Frank: The thing to do, if you're just starting out, is to check around. Listen to all the different libraries and see which one will be most effective for what you'll be using it for at the best deal you can get. FirstCom is a super product. There's no question about that. At first, I just had twenty-five CD's. I wasn't on a lease basis. Instead, I was on a needle drop fee. They don't give you any dis-counts on needle drop fees because you're in a small market. Other companies will give you a discount if you're in Aspen, Colorado, but FirstCom will not. So I was on a needle drop basis, and it was sixty bucks a pop every time I used a track. If you wanted to make any money on it, you had to mark it up. Well, in a small town, you're lucky to get a hundred bucks for a spot, let alone more when you put on this sixty or seventy dollar music charge. So that wasn't working. I had the library and they kept sending me letters saying, "You know, you're not using this music without paying us, are you?" I wasn't. I was using some jazz tracks and different things like that, but I was thinking that I've got this wonderful library that wasn't getting used. So I called FirstCom up, told them what my problem was, that I couldn't sell any of it, and asked for their suggestions. They came up with a really super deal. They increased my collection from twenty-five to fifty CD's and gave me the DigiFex sound effects library which is twenty-three disks. They threw that in with a three year deal, and I pay $233 a month. At the end of the three years, I own the sound effects library and they still own the music. They also update the music library every couple of months.
R.A.P.: What are your major costs in this business?
Frank: The telephone, which usually runs a couple of hundred a month. Payments on the library are a couple of hundred a month, and payments on equipment are a couple of hundred a month. There are auto expenses incurred driving around all the time seeing people. Then there's whatever you want to pay yourself.
R.A.P.: Is business steady for the most part?
Frank: Some months you can't keep up with the work. Other months, you can't give away production. I've had months when I thought I was going to do absolutely nothing and was extremely busy. Then there were months when I thought I would be cookin' and nothing would happen. That's pretty much the way it is with most businesses. While you look at things on a month to month basis, you have to go by what you do yearly to look at your growth.
R.A.P.: What about bookkeeping? How are you handling that?
Frank: If you don't know anything about bookkeeping, it's best to get somebody to come in once a month, do your books, and tell you where you stand. You can do a lot of stuff on your own if you have a computer and some accounting software, which I do. The problem in the discipline involved with the data entry.
The key for me that I've found in the past year, is that you're not going to be good at everything. You may only be good at copywriting and production. What you need to do is realize what your strengths are and utilize those. Then find other people to fill in, even if it's part-time, on your weaknesses, whether it be bookkeeping or selling or whatever.
R.A.P.: Anybody reading this interview is going to want to know "how much money" can be made doing what you're doing. What do you see as a reasonable projected gross income for Creative Radio Productions in 1990?
Frank: What I'm shooting for this year is a gross figure between $150,000 and $250,000.
R.A.P.: Do you think that figure is possible for a one man operation?
Frank: Yes, I think it's possible, but I'm going to add a salesperson. I've studied sales, I've read the books, and I've got motivational tapes. I've got it all, but I'm beginning to realize that one of my strengths is not really selling. I'm not seeing the growth that I really want to see, and I know it's not my creative. The creative's fine. I've never had anyone say, "Sorry, that spot sucks. That's the worst spot I've ever heard." Everyone that has listened to one of my spec tapes has said, "Hey, great ad...great voice." It's being able to close the sale.
R.A.P.: How about some parting words of advice to anyone wanting to start their own "radio only" advertising agency?
Frank: Know what you're getting into. If you've never been in business before, try to get as much capital behind you as you can. What this does is absorb all the mistakes you're inevitably going to make as you're learning. If you don't have any capital, stay at your regular job and try to pick up stuff on the side. The key is sales, not production. There are a lot of really good production people around that do super work, but the key is selling. If you don't know how to sell, you had better either learn how to sell or find somebody who can because literally nothing happens until a sale is made. The best production in the world will just sit on a shelf unless you can convince someone of the benefits of using your service.
We wish Frank all the success he deserves with Creative Radio Productions. If you have any questions or would just like to chat with Frank, he said to feel free to give him a call. His number is (xxx) xxx-3322.