Export Radio Advertising
( Originally Published 1932 )
RADIO advertising in export markets is rapidly be-coming an important part of the commercial broadcasting field. As a former agency man, interested in both radio and foreign markets, the writer has gone into this field as thoroughly as it is possible to do in a year's study —first-hand in some sections such as South America, the West Indies and Mexico and through representatives in various European countries and the British Colonies. This work, with the material gathered, together with government reports and other available data, form the basis of this chapter.
After the United States, Latin America, because of the uniformity of language and the great commercial possibilities of the southern continent, will undoubtedly prove the richest territory for radio advertising and for a high level of program achievement. Indeed, radio in the Latin-American republics may well play a great part in helping to hasten prosperity throughout the world through the stimulus it can give to the sale of imported goods to consumers hitherto unreachable by the printed word, whether in newspaper, magazine, billboard, or other media.
Broadcasting in South America has gone through much the same process of development as it did in the United States. There was the boom period beginning about 1922 when radio enthusiasm took hold of the public, and local merchants in various cities looked upon broadcast advertising as a great medium for gaining good will. The very novelty of hearing a human voice over the radio held listeners at attention while advertisers fed more advertising than entertainment into the microphone, and the radio audience was grateful for it.
For the first three or four years radio was a mania, vast quantities of receiving sets were sold by department stores, music houses, electrical shops, and even through such abnormal outlets as garages. Thousands of amateurs feverishly built their own sets, and it was these amateur radio fans who formed the numerous radio clubs now spotted all through South America, many of which have maintained broadcasting stations by voluntary contributions through every sort of adversity during the past eight years. Thus we have the Radio Club of Rio de Janeiro and Radio Club of Argentina (known as the R.C.A. and often, therefore, confused by foreign advertisers with the Radio Corporation of America). In most cases these radio clubs were given substantial contributions and were often even initiated by radio dealers in order to increase the sale of receiving sets and parts.
Scores of firms of every type, from manufacturers of soap and food, to radio dealers and newspapers joined in a mad rush to secure wave lengths and licenses from the different governments to erect broadcasting stations. In many instances fly-by-night companies were incorporated to tie up all the wave lengths possible and peddle them around to the highest bidder. Most of the station transmitters were made from parts bought from various countries. That is, they were assembled sets put together by native engineers and in some cases by mere amateurs. In one set of transmitting equipment one might find material made by the Philips Company of Holland, Western Electric Company, Telefunken Company of Germany and Italian and British companies. The whole broadcasting situation was confused and hopeless. Just as in America, public interest was maintained because of radio's novelty, but when the novelty wore off the broadcasters had to set their house in order. There followed five or six years of hard work and slow improvement until now, once certain difficulties have been overcome, South America stands on the verge of a tremendous development in radio broadcasting.
More and more, commercial broadcasting has become a specialized art, and the radio audience has become more and more discriminating. There are stations to-day in Latin. America that compare favorably with good stations in the United States. Foreigners—American and British—in the Latin-American countries are inclined to compare broadcasting there unfavorably with American broadcasting, thinking in terms of the big New York stations. They forget that throughout the United States are scores of stations which compare unfavorably in their local talent program material with the better stations of Argentina, Brazil, Chile, Cuba and Mexico.
Throughout South America the American sponsored program system is used to support broadcasting. Careful reading of articles in South American newspapers on radio and examination of radio amateur and trade publications revealed not a single criticism of the American method of radio broadcasting. Invariably, editorials calling for improvement in broadcasting in South America pointed to the American plan as the best one to follow.
Some countries also require license fees on receiving sets. This is resorted to in some cases merely to keep track of the homes in which sets have been installed so that in case of internal political disturbances the government knows just which people may be the subject of propaganda from oppositionists using stations outside the country. In other cases licenses are only a source of government revenue, and the monies obtained are not used for broadcasting purposes.
Broadcasting Chains.—In South America there has been and can be no chain corresponding to the National Broadcasting Company or the Columbia Broadcasting System. The great distances between population centers make a South American chain economically unjustifiable. Telephone tolls would be so high that chain rates would have to be exorbitant to cover the costs. The political subdivisions with their intense nationalism also make central control of radio programs—and therefore a chain —impossible. It is true that for such great international features as the Prince of Wales' speech at Buenos Aires some time ago, a hook-up between Argentina and Chile was made. In this instance, however, the International Telephone and Telegraph Company supplied their lines over the Andes for a nominal charge as a gesture of good will to the countries concerned, as well as to the Prince himself. It is hard to conceive of any South American government permitting its country's daily programs to emanate from some key station in another country.
Chains in individual countries have also been thought of but only in Argentina and Mexico have they materialized. The Argentine chain has on telephone hook-up five stations, and the Mexican chain has the same number. These hook-ups are not continuous, however, but are used only when some outstanding feature, such as an important political speech or sporting event, is under way.
The Short Wave.—Because of the impossibility of having a chain in South America, attempts have been made to substitute the short wave relay system. The Westinghouse short wave station at Pittsburgh and the General Electric short wave station at Schenectady have sent programs to South America on an experimental basis. In some cases these have been picked up and rebroadcast by local stations. This rebroadcasting has been successful, but whenever code stations are operating close to the broadcast wave length, reception cannot be guaranteed. Station managers in South America tell us that whatever the cause of the poor reception they sometimes get from short wave stations in the United States, whether interference from other stations or atmospherics in the equatorial belt, the uncertainty gives the local rebroadcasting station owners some hectic moments once they have committed themselves to picking up the program for their audience. They do not mind taking the chance, however, if some particularly notable event is involved.
The Federal Radio Commission has denied permission for short wave broadcasting of commercial programs by stations in this country to South America, declaring it was uneconomic and pointing out that short wave lengths are needed for experimental purposes for the present. If permission is ever granted, the advertiser will have to pay both for the time of the short wave station and of the local rebroadcasting stations.
As to direct short wave reception (without the intermediary of a long wave rebroadcasting station), the fact that there are very few short wave sets in Latin America makes this method commercially worthless at the present time. Talks with advertising agencies, radio dealers, station managers and radio manufacturers as well as with the United States government representatives in South America place the number of short wave sets in Argentina, the most advanced country in radio on the continent, at not more than five hundred as compared with a minimum of half a million long wave sets. The proportion is larger in tropical countries which have local stations inferior to those in Argentina. It will be some time, however, before enough short wave sets can be sold to make the short wave a worthwhile advertising medium.
There is a strong feeling of nationalism in all of the South American countries which brings a loyalty to native stations provided they are broadcasting programs which are equally as good as programs received from abroad. There is a good will element which should be taken ad-vantage of by North American advertisers.
All of these points, together with the easier merchandising tie-up that is possible with electrical transcription, make the latter method by far the most practical way of advertising at the present time by radio in South America. It is possible that some time in the future the short wave will be the "chain" of Latin-American broad-casting. But transcriptions made in New York, where there is always available the best Spanish talent residing here for the purpose of making phonograph records, will occupy the most important place because of the ease of tying-in merchandising in certain markets at certain times.
Transmission and Reception Facilities.—Stations in South America range from the best to stations resembling those of amateurs in this country. There is considerable dispute as to the power of many of them. The writer went to various stations with an engineer and in many cases found that they claimed higher power than they actually had. That is, they took the power input as the amount of power they were getting on the antenna. Some stations claiming 10,000 watts were getting effective power on the antenna as low as one or two thousand watts. However, the more reliable stations endeavor to give a correct estimate of their power. Often little known stations claim two or three times that of the best stations. In most cases the power rating has been accepted by the various governments of the countries but even here it is more a case of laissez faire than the result of a check-up.
There is one superpower station in Buenos Aires having 40,000 watts power, eight stations with 10,000 watts, and five with 5,000 watts. Mexico has two 5,000-watt stations and one up near the Texas border with a power of 10,000 watts. Chile has just opened her first 5,000-watt station. Aside from these, however, there are no stations in Latin America with more power than 2,000 watts.
As mentioned before, many stations in South America have "mongrel" transmission equipment often poorly assembled from parts furnished by various manufacturers.
The installation of leading stations has been superintended by competent engineers, however, and the results are good. Philips of Holland, and the German firm, Telefunken, have given American manufacturers a stiff run in the sale of transmission apparatus. For example, in a recent check-up of stations in Buenos Aires about 45 per cent of the tubes used were of Philips make, 25 per cent were Telefunken, and others came from the United States and Great Britain. The municipal station at Buenos Aires (which does not take advertising) has Western Electric equipment throughout and it is the only one of its type in Argentina. The PRAE of Sao Paulo has the only completely Western Electric equipment in Brazil. The Telefunken Company is installing for LR3 of Buenos Aires, the key station of the chain, the latest type of its equipment. The plant is modeled on the internationally known station at Budapest. In Santiago, Chile, the new station CMBE, owned by Universo Publishers, has new R. C. A. and Western Electric equipment. The installation of this excellent equipment by leading stations is tending toward a general improvement through-out the broadcasting industry.
It seems to be the general opinion of the trade that there is a distinct preference for American-made receiving sets as compared with those of European or local manufacture. European competition has depended mainly upon low price and small power consumption ad-vantages, both of which are easily compensated for by the better presentation and greater volume of the American sets. Cheap German sets have had the disadvantage of inferior appearance and a lack of selectivity.
Due to their merchandising methods, extensive advertising, good quality of their product and the fact that the manufacturers have catered to the amateurs by "kits," preparation of hook-ups, etc., Philips tubes for battery sets have gained a strong foothold in South American markets, sales amounting to fully 80 per cent of the total sales in Argentina, according to reliable estimates. Of the remaining sales about 15 per cent are estimated to be of American manufacture. A wide variety of models, types and brands of loud-speakers are being sold. Here as elsewhere the dynamic speaker has been well received and is replacing a large number of cheap speakers. The Philips Company has introduced a dynamic speaker which has found favor and which is offering American-made speakers good competition. There are a sufficient number of sets in most of the South American countries, Cuba and Mexico to make radio an excellent advertising medium.
Local Programs and Talent.—Until a year ago radio stations in South America were very reluctant to pay the high prices that vaudeville and other artists demand. Newspaper stories of the sensational fees paid radio artists in the United States have quite naturally made well-known artists in South America perhaps place their charges higher. But they forget that these excessive prices are often paid for programs carried by the great chains and not for programs on an individual station. In spite of that, forward looking broadcasters, such as the Argentina Broadcasting Chain (Cadena Argentina de Broadcasting) have recently been very liberal in their financial arrangements with artists of note, particularly Italians, French and Spaniards who have had theatrical engagements in larger cities. And a definite school of radio artists is being built up as broadcasting becomes more lucrative.
There are always a few good programs on the air, but in general the programs are not so good as those in the United States, and there is an excessive amount of advertising. The fact that scores of stations are being sup-ported in the city of Buenos Aires, for instance, and get a sufficient amount of local advertising in spite of the poor programs, is a tribute to the pulling power of radio.
Programs range from the excellent operas put on by the best European opera companies in Rio de Janeiro and Buenos Aires, the broadcast of prizefights and races, notable political speeches, and orchestras of all grades, down to the mediocre talent similar to that found in a medium-sized American city. The use of phonograph records is general, the smaller stations using them fully three-quarters of their time, with no attempt to build up studio programs. In this case the advertiser merely buys an announcement lasting a minute or he buys his announcement by the word—thirty to sixty words usually being the minimum. Because the advertiser is not sponsoring a full program period of a quarter-, half- or full hour, the station in order to make up for its time often sells from five to fifteen such announcements between each number. The better the station the fewer such announcements they sell between numbers, but this practice has been so abused that it is curing itself by definitely souring the audience against the offending stations and turning them toward the reliable stations which seek a higher level of program achievement.
Frequent complaints come from listeners about the excessive use of phonograph records by broadcasting stations, and newspapers and radio magazines are constantly poking fun at this practice. This parallels the experience in the United States. Three or four years ago many stations here filled a great majority of their time with phonograph records, and the public reacted in much the same way as in South America. When electrically transcribed programs appeared, however, even though they were on discs, the public readily accepted them, for they offered a program built up as a unit and gave the effect of a studio production.
Occasionally local representatives of American advertisers have gone on the air in South America, but there has been little attempt at coordinated programs (such as we have in the United States) especially built for the advertiser's account. Most of them have been content to buy a certain amount of time on the air and let the stations fill it in with a routine program, inserting advertising messages that are in practically all cases too long and too insistent. Unsatisfactory as these would appear to a North American listener, clients in most cases have had satisfactory enough results to continue their program.
Australia is one of the good radio markets of the world. There are 328,307 registered sets in the commonwealth with a good many "bootleg" sets owned by those known as "pirates" who avoid the payment of the twenty-four shillings per year license fee. Since it is extremely difficult to detect whether or not a home owns a radio set it is believed that a great many are not registered with the government. Since three-tube sets cost from fifteen to thirty pounds and six-tube sets from sixty to eighty pounds it can be seen that the owners of the sets have considerable purchasing power.
Until the Emergency Tariff Act was passed in Australia in 1930, a large percentage of the sets in use were imported from the United States. That act, however, prohibited the importation of sets partly or wholly assembled. So that now the business of assembling the sets is done in Australia and imported parts are built into locally made cabinets.
There are two systems of broadcasting in Australia. The National Broadcasting Company carries out services under contract with the government and is financed from the license fees paid by the listeners. These stations are not permitted to put any sort of advertising in their pro-grams. There are in addition to these stations a number of licensed stations, privately owned, which exist solely by advertising.
The programs are fair: the morning is given to much the same sort of programs we have here, mostly for women and include beauty hints, home crafts, cookery and baby welfare. The stations still take too much advertising which they wish to drop as soon as they get enough good sponsored programs to fill the time. Talent, of course, is limited.
THE BRITISH ISLES
The British Broadcasting System is well known and needs no discussion. Advertising has never been permitted, although now there is some discussion as to the need of an additional source of income for the broad-casting system other than the tax on receiving sets, through which it is now supported. The possibility of selling time as in the United States was discussed in the Daily Telegraph of September 10, 1931.
Irish stations at Dublin, Cork and Belfast, although run by the General Post Office, all take advertising, although it is not developed at all to the extent it is in this country. A new station being erected near Athlone, almost in the center of Ireland and sixty miles west of Dublin, will be one of the most powerful in Europe. It is expected that this station will take advertising and will prove to be very important to American firms exporting to Europe.
Advertising on the radio is forbidden in Denmark, Sweden and Finland. Norway permits advertising at certain times of day but this has not been used for "sponsored" programs. There have been merely what they call "propaganda discourses." Norway has one 60 000-watt station at Oslo, the remaining stations are 1,000 watts or less. There are at least 75,000 receiving sets in Norway with 450,000 sets in Sweden, 345,000 in Den-mark and 100,000 sets in Finland.
All broadcasting in Italy is done under the "Eia"—Ente Italiano Audizione Radiofoniche—and commercial programs are permitted on all stations. The right to sell the advertising is given to one firm, and broadcasting is done under the continual and systematic supervision of the Artistic Commission which is composed of government officials. This commission has power to approve or cancel programs. There are member stations in eleven Italian cities and the power ranges from 200 to 10,000 watts.
Spain also permits commercial broadcasting, and there is one group of seven stations which occasionally "chains up" and is worthy of the consideration of the American advertiser. This chain covers the seven principal cities of Spain, and the stations range in power from 200 to 10,000 watts.
In France there are three popular stations each of which covers almost the whole country and which take commercial programs. Up to this time the advertising has been done in a very obvious manner and does not add to the quality of broadcasting. Of the three stations, Radio Paris is the most powerful, with 15,000 watts. It covers all the country well and is heard in Belgium and England. Petit Parisien covers Paris and suburbs and Radio Toulouse has a good coverage throughout the south of France. There are approximately 1,000,000 radio sets in France and so the medium is obviously a good one, and American advertisers in France will do well to build programs for this market.
There are no broadcasting stations in Austria which accept commercial advertising. Broadcasting is in charge of a private company jointly formed by the government, certain large banks, and leading industrial companies which is known as the Ravag. This company, which is in reality a club, had on March 31, 1931, a total of 387,-290 members. These members pay a monthly fee of two shillings or about twenty-eight cents and an additional fee of one and a half shillings, approximately twenty-one cents. Payments are made through the postal offices. From the money raised in this manner excellent programs, which vary in their subject matter, are given. Music, literature, science, current topics and the weather reports are the chief fields from which the programs are drawn. The radio public seems to prefer to pay for selected programs with an absence of advertising, for an attempt was made unsuccessfully some time ago to introduce advertisements into broadcasting.
Commercial broadcasting is a government monopoly in Hungary and advertising by broadcasting is prohibited by ministerial decree.
In Czechoslovakia, also, broadcasting stations are owned or controlled by the government, and no commercial broadcasting is permitted.
In Poland the Polskie Radio controls and operates the broadcasting stations. Advertising is permitted but so far it has been of a strictly local character and consists of simple announcements or so-called entertainment talks and dialogues. The principal Polish advertisers are government and social institutions. Trade advertising is confined largely to articles of necessity, such as foods, clothing, household furnishings, etc.
Tradio Broadcasting is a State Monopoly in Turkey, and exclusive rights have been granted by the government to Telsiz Telefon T. A. S. Regular programs are broadcast between 6 P.M. and 11:30 P.M. from two stations, one at Istanbul and the other at Nukara. Both stations have ample power for clear reception in all parts of the country. It is estimated that there are between 4,000 and 5,000 radio receiving sets in Turkey at the present time, the largest number being in Istanbul. Other cities such as Izmir, Ankara, Bursa, etc., also have a considerable number, but in the rural districts there are very few.
The volume of radio advertising is extremely limited and consists only of short talks describing and recommending commodities. No form of entertainment accompanies these talks, which on the average take less than one minute to broadcast. The language used for broad-casting is Turkish and, to a very limited extent, French.
There are three broadcasting stations in Yugoslavia which accept commercial advertising: Radio A. D. of Belgrade, 2,500 watts; Radio Zagreb, 700 watts; Radio Ljubljana of Ljubljana, 3,000 watts. Commercial broad-casting is being done on a relatively limited scale but probably will increase in the future. Comparatively few well-known international concerns use broadcasting facilities for advertising. The Philips and Telefunken companies both use it, also local radio apparatus distributors. Local products such as soap, confectionery, watches, etc., are advertised by radio. Local talent is available at all stations. Phonograph records may be used in Zagreb and Ljubljana although they are not recommended by the stations. The Belgrade station uses the Serbian, the Zagreb station Croatian, and the Ljubljana station the Slovenian language.
The programs throughout all of Europe are usually reported dull as compared to those in the United States. There is available excellent talent in many of the cities, but program building is poor.
The Philippines have one of the best of foreign stations—KZRM with 50,000 watts, R. C. A. equipment, 100 per cent modulation, crystal control. This station reaches all of the Philippines as well as China and japan and northern Australia. It runs both Spanish and English programs for the Philippine audience, so export advertisers can use transcriptions made in either language. About 80 per cent of the programs are in English.
Honolulu has two prominent stations, each powered up to 1,000 watts and owned by newspapers. The number of listeners, about 75,000, warrants the expenditure of at least some part of the appropriation in radio.
The only Indian stations of much importance are located in Calcutta and Bombay. Both were started as private enterprises and have been taken over by the government. Programs are broadcast in three languages --Indian, Hindustani and Bengali—and the appeal is largely to the Indian people. Calcutta has the more important station, and since Bombay is situated in what is known as a "blank" spot, broadcasting there is not very effective. There are only about 3600 receiving sets.
Undoubtedly radio advertising will solve a problem that has vexed exporters for years, particularly in markets where illiteracy is high. This is the scarcity of good
advertising media. Whether as a supplement to the regular newspaper and outdoor campaign or as the sole means of advertising, radio promises to be an efficient tool to speed up international trade.