Hear 2.0

See it online now: "Seducing PPM: The 7 Habits of Highly Successful Ratings"

Whether or not your ratings are measured by PPM, there is stuff you will learn in this presentation. It's really designed for any station in any market that expects to attract and retain audience.

Thanks to Arbitron for supporting this effort and to the many broadcasters who publicly and privately assisted in the execution of this project. It is brought to you by Mercury Radio Research and is being presented to the radio industry concurrent with this posting at the NAB Radio Show in Charlotte.

View Quicktime Movie Version (55mb) (includes the full presentation and narration)

Download PDF notes
(Note: The narration in the movie adds a lot. If you simply download the notes you will lose quite a bit of the presentation - but it sure is a lot shorter)

Meet your new Online Radio competition: Newspapers

This past week I had to the opportunity to visit online radio studios under construction.

But here's the catch:

It was at a newspaper.

The San Diego Union-Tribune, to be exact.

The U-T's Ron James and Marc Balanky are gearing up to leverage the paper's notable local news assets and just as notable local web presence and mix them together into an online radio alchemy that may just be the Next Big Thing in the world of newspapers (no wonder they're getting calls from newspaper markets far and wide for the how-to).

And it will surely be another force fighting for online radio dollars with your stations and their streams.

Think about the implications of a front page banner ("What's on now") inviting 3 million unique monthly visitors to sample radio-style content from name-brand local columnists and legendary local radio talent - hear their talk shows and even call in!

Live and on-demand.

Here's a unique peak inside Ron and Marc's plans in a Q&A I did with them this past week from their very radio-like studios down the hall from the printing presses.


MP3 File

I STRONGLY recommend you give this interview a listen, because it may be the model many other newspapers follow in medium and large markets nationwide.

A very intriguing glimpse into the future of the newspaper business, and an indication of the commitment they have in converting from "print" companies to "media" ones (their web staff alone is likely to be bigger than everybody working on the web in radio in your entire market).

Their online radio effort has not yet launched, but when it does it will live at signonradio.com.

Even now they have a streaming Alternative station online which features Indie tunes. And listen to this: Its average daily traffic is about 75% of San Diego legend 91X's.

Pretty amazing.

You will be hearing much more about this. And you heard it here first.

Long Live the Audio Industry

Interesting presentation from Forrester Research at today's NAB showing some as yet unpublished research.

Although I can't quote any numbers, one point in particular caught my attention:

Of all of radio's competitors in the new audio media landscape (e.g., podcasting, streaming, downloading to PC, CD's, mp3 players, satellite, etc.), the one that had the LEAST impact on radio listenership was...

That is, (in my words) all of the other media are closer radio substitutes than CD's, which are really more of a complement to radio (since they offer a distinctly different benefit) than a substitute.

This echoes something I have argued for a long time: That if it looks and acts and sounds like a duck, it's a duck. Or, more to the point, if it functions like a radio and takes the spot of radio in your life, it's a radio. Or, put even differently, we're in the same business as all that other stuff and we should act like it, plan on it, and invest accordingly.

The radio industry is dead. Long live the audio industry.

And guess who sits atop that hill?

I see them all around me here at the NAB Radio Show in Charlotte.

(P.S. As an aside, I might point out that this research makes a dandy case favoring XM and Sirius's merger plans, since the majority of satellite radio users spend their audio listening time with media other than satellite radio, thus implying those media are substitutes or competitors to satellite and that satellite, like radio, is not an island unto itself and thus cannot be a monopoly)

Want to increase your ratings by 32% overnight?

Did you know that one station used one tactic which alone increased their ratings by 32%.

Want to know what it is?

Find out Friday at the NAB Radio Show in Charlotte.

And, I'm happy to add, this is the last tease I will ask you to endure.

Seducing PPM: The 7 Habits of Highly Successful Ratings
September 28, 2007 • 9:00AM - 10:15AM
Charlotte Convention Center 217BC

Exclusivity and Control and Howard Stern

Here's a really interesting summary of a (tough to read) working paper from Harvard Business School that studies a key question: When is it better to provide something exclusively, and when is it better to provide that something on multiple distribution channels (i.e., "multihome")?

Here's the key section:

High-quality content will [be] multihome, because foreclosing a portion of the market by being exclusive will be too costly. Mid-quality content will be exclusive and can soften price competition at the platform level enough to offset the losses from excluding a portion of the market. Low-quality content will multihome, since it would not yield any comparative advantage if it were exclusive.

If we assume "quality" is reflected in the price of content acquisition and/or the popularity of that content, then, for example, major league sports play-by-play is "high-quality" content and thus is available across numerous distribution windows.

But, Mr. Karmazin, isn't Howard Stern also "high-quality" content? And if this Harvard model is correct (and on this point I definitely think it is) aren't you foreclosing a large portion of the market by forcing Stern to be exclusive? Aren't you leaving both revenue and listeners "on the table"?

Let me answer: Yes, yes, and yes.

It seems to me that distinguishing between "high," "medium," and "low-quality" content is an exercise everyone in satellite radio should engage in.

It's not Howard Stern's fault that his audience is smaller than it used to be. It's the fault of a distribution policy which isn't matched to the quality of the content.

Are Ford and HD Radio in Sync?

You know it's NAB Radio Show time when the news releases about HD radio start.

Today we hear that Ford will make HD radio a dealer-installed option across its product line. This follows on the heels of BMW doing the same thing in 2006.

To date, it has never been reported how many BMW buyers have taken the HD radio option. No news, of course, is rarely good news.

Obviously, it's better to offer HD radio as an option than not at all. But the key issue, as I have long said, is not to feature it as an "option" but as "standard" equipment. If you have to trade off an HD radio vs. a sunroof, then most folks will choose the sunroof. But if the HD radio is as standard as the steering wheel, it will be in every car that comes off the line and in every Ford-enabled driveway.

(And by the way, this is every bit as true for satellite radio as it is for HD).

According to the Ford press release, "price points will vary by dealership." But anyone who has done anything at a dealer knows it can't be cheap.

And there's another factor mixed in here, too. Ford is also the company evangelizing Microsoft's "Sync", its a fully integrated, digital, voice and Bluetooth-enabled audio system that, among other things, allows you to play songs from a connected media player via voice command. Sync is priced at $349 (about the same as the cost of a high end iPod) on models where it is optional. But it is standard equipment on higher end models - and these, of course, are exactly the models targeting consumers who are more apt to spend extra on a radio.

The radio industry will, of course, promote Ford for free in exchange for this development as part of the presumably soon-to-expire pledge of airtime to the HD radio effort.

Will we sell more Syncs than HD's?

Let's hope that new car buyers don't know how to pronounce "sync."

DVR for your radio

It's RadioShift.

Is there any question that we're moving into an "on-demand" world?

Assuming you have unique programming that's IN demand, sooner or later it will be ON demand.

And value will flow to those who aggregate and organize, not simply those who create.

Is "Friday the new Thursday" in PPM? Nope.

"Friday is the new Thursday," says Arbitron.

No, actually, it's dead wrong.

And not only is it wrong, but acting as if it's right will hurt your ratings.

Want to discover the truth?

Where will you be this Friday morning?

Get ready.

Seducing PPM: The 7 Habits of Highly Successful Ratings
September 28, 2007 • 9:00AM - 10:15AM
Charlotte Convention Center 217BC

Measuring HD Radio "awareness" is a waste of time

Here's yet another study about awareness and interest in HD Radio.

The title of the article seems to suggest that "awareness" or lack thereof is a significant problem for HD Radio.

I couldn't disagree more.

Folks who make this argument assume that awareness precedes consumption. But I argue that the two measures move hand in hand.

If nobody's buying an HD Radio then there will not be high awareness. Rarely is awareness high for product categories that don't interest you. Don't have a dog? How many dog food brands do YOU know?

And, conversely, if there's not high awareness, I'll bet you nobody's buying the product.

Hence, the pickle we're in.

You see, awareness and interest and consumption are all tightly integrated. It's not like you go through one door to get to the others. You can conceivably skip awareness and go right to consumption if the elements are right - just as you can discover a station and it can be your immediate favorite without you ever having been a marginal or occasional listener before, let alone "aware" of it.

So for our purposes, measuring - let alone tracking - awareness for HD Radio is a pure waste of time and suited only to spark some press ink.

That's apart from the issue of what's really at the root of consumer confusion over HD Radio:

It's a bad and fundamentally confusing name applied to a solution in search of a problem.

And that's why theoretical questions about the prospects for HD posed in surveys are universally wrong. The only thing harder than telling an interviewer "I'm not interested" is driving out to the Best Buy and plunking down a hundred or more bucks on a new-fangled radio.

Your radio station needs to ZAG - an interview with author Marty Neumeier

Marty Neumeier is president of Neutron LLC, a San Francisco-based firm specializing in brand collaboration. He’s also the author of a handy and terrific book called Zag: The Number One Strategy of High Performance Brands.

If winning is your goal, does your radio station need to Zag? Marty thinks so, as he says in this edited version of our conversation. For the full 20-minute interview click the “play” button below, or download the mp3 file.

MP3 File

What is a Zag and why do we need to do it, Marty?

All of us are facing a super-cluttered market and a world that’s moving faster than ever. Innovation is leapfrogging all the time. So in order to keep up with that, in order to win in that environment, you have to not only differentiate yourself, you have to radically differentiate yourself. So I called that a Zag, a radical differentiation.

If you look like everybody else, if you’re a me-too brand or a me-too product or service, you don’t matter. This is really the point. How do you matter to your audience? What makes you different and compelling?

That sounds like the basics of positioning and branding. How are you taking that to a new, deeper, more edgy level?

Well, I think you’re right, this is positioning. It’s basic positioning. But I think what people need to understand nowadays is that when you’re inside a business it seems like you’re different because you’re so close to it. But from the outside, it may not be different at all. I think people underestimate how different they have to be in order to make an impact.

And when they really confront what it takes to be very different, extremely different, they get nervous about that. What’s gonna happen to their business?! You know, why should I do something that nobody else is doing?! Isn’t that risky?! Because that’s the traditional way to look at business. If nobody’s doing it, I’d be crazy to do it. And I say if nobody’s doing it, it might be brilliant to do it. But how do you make your company safely innovative?

What you’re looking for is “white space.” Where can I go where no one else is so that I really stand out from the crowd? Even if the audience is narrow, it may be very deep for you. It may be an audience that you can create a lot of loyalty with.

If I’m a radio station and I’m committed to be dramatically different the way you say, how do I go about building a Zag? Where do I start?

Well, we like to start by looking at the brandscape. In other words, who do you and your customers consider to be your competition? Make a list of those. And then make a grid. On the left side you would write your competitors and across the top you would write the key features that drive your success or the success of this category. And you will see how strong each competitor is in each of those areas, and you’ll see where the white space is.

So the big question is where people are not competing. What are they not doing, not doing very well, or not doing very much of? Further, what are the players in this category not doing at all because they haven’t even imagined they could do it? Or what are they doing so much now that if we did the opposite, we would create a whole new category of success?

You need to explore what’s missing in the brandscape, what you have a passion for, and what you’re willing to take a risk on. Exaggerate those and stop competing in the areas where the competition is too intense.

Okay, I see a couple of the difficulties. One is that the white space is where the risk is at its maximum. And the other is that what’s popular and what’s different can be very difficult to find. How do you deal with these two problems?

You want to be different and good, because that’s where you’re going to create new market space that didn’t exist before and has a nice long run before anybody copies you.

There are lots of examples of this in different fields. In TV, All in the Family created a lot of white space. Just a whole different look and feel and attitude at the time. In cars, the Prius I just bought was good and different and people looked at it and said, “Well, that’s a really weird looking car.” But I guess, you know, it might be okay, since you get 50 miles to the gallon.

Or the Aeron chair, which everyone thought was really bizarre when it came out, yet at one point 30 percent of its manufacturer’s revenue came from that single product.

So all these kinds of products started out baffling people and getting very strange feedback, but they also were perceived as having some value. And so that creates a kind of recognizable pattern that you look for when you’re trying to find that white space.

When you expose people to a prototype of your product, what you’re looking for is a response like: “That’s weird or different. Hmm, I don’t know if I agree with that. I don’t know if I would buy that, but I certainly see the value in it.”

When you get those two things together – different and good - that’s when you start to think you may have a home run, and then you need to figure out how to de-risk it. And one way is to start small. Invest in little tests so you’re not fooling yourself into thinking it’s a winner when it’s really a loser.

In radio we’re dealing with multimillion dollar stations and obligations to owners and Wall Street and so on, and when you flip a format, you’re making a wholesale switch where the risk is huge. But could we perhaps conduct these experiments online?

Yes, maybe try it online. Maybe start a brand, a separate brand, that won’t affect your main brand if it fails. And if it looks like a success, then switch over. Often what happens is the big successes won’t come from these large brands and large companies. They’ll come from the small ones who have nothing to lose and will do anything to leap ahead of you. So the market is always moving faster than any one company. That’s the danger.

What’s really risky to stay the same. So you need to keep up with the speed of the market, and to do that you must think out of the box, try little experiments on the side, perhaps. You don’t have to spend a lot of money, but you need to prototype your ideas, build up a small audience to the point where you see it could grow. If it looks like you’re going to ride a trend, so much the better.

And then you flip the switch.

For long-running and established radio brands, how do you strike that critical balance between novelty and consistency? Especially when a station is doing well today by not changing?

One thing I’ve observed is that long-running brands tend to do best right before they go under. Companies sometimes get so good at what they’re good that, they forget why they got in business in the first place, which was to innovate.

And so they get this sort of cultural lock-in where they just can’t change because those processes are just so ingrained, and there’s nobody in the company who really wants to change, so they don’t. And eventually they just go through that sunset effect - out they go and something fresh takes over.

You need to look for ways to stay young so you don’t face that sunset prematurely. Don’t be rigid.