To Current's home pageOriginally published in Current, July 31, 1995
By Jacqueline Conciatore
A group of public radio broadcasters is developing an affinity marketing program that would give stations a 2 to 5 percent piece of listener transactions with participating national vendors. The Listener Alliance for Public Radio hopes to be operating in time for stations' fall membership drives.
The Alliance, headed by Walt McRee, president of Public Broadcasting Affinity Phone, last week requested an undisclosed sum from CPB to help launch the service. Given cuts in fiscal 1996 federal support for stations, "we consider this an urgent request,'' says McRee. "We're hoping CPB agrees with that.''
Developed by the nonprofit Alliance for Public Broadcasting Inc., the program would generate revenue for public radio stations via deals with national vendors of such goods and services as computer hardware and software, books, CDs, travel services, Internet access, and long-distance telephone service.
Vendors would provide discounts to listeners--probably at least 10 percent, says McRee--as well as a 2 to 5 percent share of transaction revenue to public radio stations.
McRee says his own long-distance telephone service may become one of the vendors, but the Alliance's directors have the say over which services to utilize. The Alliance is "in conversation and negotation'' with several companies, including America Online, he says.
Stations would likely market the Alliance on-air and in program guides. Interested listeners would phone a toll-free number to sign up and would identify their stations at that time. The company would build demographic caller profiles to give directly to stations, asking such questions as how long the callers have listened to the station and whether they contribute to it, McRee says. "We want to help stations build a warm base of potential new members.''
The Alliance would require about 10 to 15 percent of income for overhead, he says.
In what McRee says are conservative estimates, the Alliance is projecting that one out of 10 listeners will participate and that the average consumer will spend $1,000 per year on goods and services. This means a station with a 100,000 weekly cume could annually see between $200,000 and $500,000 in total rebates. Audience data from the Alliance shows that big stations like WAMU, with a 400,000 weekly cume, could earn about $800,000-$2 million. A smaller station like WBFO, Buffalo, with a cume of 58,000, could earn about $116,000-$290,000.
To date, about 65 stations have expressed interest in the Alliance.
If CPB doesn't provide assistance, "the board of directors is looking at rich friends' inheritances and pawn shops,'' McRee joked.
Paul Damberg, president of the Public Radio Association of Development Officers (PRADO), has written CPB Vice President Fred DeMarco endorsing the affinity marketing concept. Though he wants more information about the vendors and their services before giving the Alliance a "whole-hearted vote of support,'' he also says the program looks like a good option for stations with limited development resources. The program is "a relatively labor-free, time-free investment,'' says Damberg. "We can't take on new projects that are going to add to our workload. We're all struggling hard to improve traditional streams of funding.''
Some stations are worried that the program might erode local membership bases, but McRee sees it as a way to tap the wealth of the many public radio listeners who never give. Stations that already participate in affinity plans, such as KUNM, Albuquerque, have not found that supporters drop membership once they sign up for affinity plans, he says.
Others in public radio question whether the consumer market isn't glutted with affinity plans. But McRee implies that this is all the more reason to take action now: pubcasting should stake out its place on the bandwagon. "It's clear to me public broadcasting needed some marketing presence, a development strategy for this,'' he says.
Other stations have raised questions about how underwriting guidelines might affect the Alliance's plans. McRee says the FCC will allow on-air promotion of the Alliance, since it exists solely to raise money for stations. Beyond that, "we don't intend to stretch any envelopes about what's legal and what isn't,'' he says. The company will field for stations any specific legal questions that arise about what can and can't be said on-air, he says.
McRee says he will extend the Alliance to television eventually. "It's one of my key motivators. I've had it as a programmer and viewer, seeing programming screwed up and [stations] relying on an archaic way of raising money.''
The Alliance for Public Broadcasting's board of directors includes: Donna Apidone, director of membership and individual giving, WITF, Harrisburg; Mary Kokuniewicz, development director, KUNM, Albuquerque; David Creagh, manager of business development, Christian Science Monitor; Peter Dominowski, president, Market Trends Research; William Johnson, development director, WRTI, Philadelphia; Jim Paluzzi, g.m., KBSU, Boise; and Ernest Sanchez, communications attorney and former NPR general counsel, Washington, D.C.
"The board is a very prestigious collection of public radio people,'' says Damberg. "That was one of the things that added a lot of credence to it for me.''
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