14 July 2009

Mmmm.... Peanut Butter! Part 2

To understate the fact, I enjoy peanut butter, maybe more than the average person and I admit this with a mix of pride and some reservedness as there is still some stigma attached to any addiction.

Peanut butter is not my only love. I also love radio.

Radio's early days were fraught with experimentation leading to it's primary reason for existence, entertainment. I'm excluding it's other uses like news and communication because what I love about radio is it's awesomeness as an entertainment vehicle.

The early part of last century saw radio becoming the central component in a home for entertainment. Every home was plugged in and listening to their favourite shows acted out on the airwaves. Some of these shows are still played by a few radio stations and many of these are still more entertaining than TV. You get to combine the use of your imagination to visualize the happenings without the awkwardness of having to read a book.

Back then, radio was the hub. And for a while it stayed that way until television showed us visually what was happening.

In a way, this 'hub' style entertainment is exactly what Apple is trying to recreate with iTunes. For those that are plugged in and using iTunes to it's max, you know that you need not go any further for any entertainment - rent movies, download courses, music, TV shows... and sync your communications. Early adopters are in love with this, but it's still got a long ways to go for mass acceptance and use.

Growing up, there was only one radio station in town. There were actually 6 stations but with 1140 CKXL on dial nobody listened to anything else. XL as it was affectionately termed had the highest ratings of any station in North America as it related to the population, or market share. It was the king of the airways and enjoyed that spot for well over 10 years.

What was XL's secret? Well, they were a popular music, AM station, but they weren't confined to a single genre - they played everything from country, pop and disco to heavy rock and parody songs all in the same hour. Bottom line was they just played good music, they didn't confine themselves to a restricted playlist of a single genre. They had great on air talent and great marketing, they were involved in the community and didn't take their success for granted (not outwardly anyways).

So, what ended their reign? There were a few factors, first and biggest was the advent of AOR (album oriented rock) which in turn popularized FM radio - a much better platform for music listening (hurray for stereo!) - this pretty much ended most AM music stations throughout North America. The second was the increase of competitors (more stations) and the third was the poaching of their much loved on-air talent. With more choice in the market and B-sides to listen to, the audience was fragmented and diluted. They still had a core listenership, but there was just too many pieces of the Calgary radio pie and everyone was fighting for the extra slice.

Now, I'm not an expert in the radio or peanut butter business, but I did spend a few years working in radio and a few years working in the food industry. So, my insight is perhaps a little broader (or narrower) than most.

What I can say is that radio is a funny business, and I mean funny peculiar, not funny haha.

Radio and peanut butter react to market changes in a similar manner in that they change their product without considering what made their product popular in the first place. However, in the case of peanut butter, changes usually are made slowly, in increments over long periods of time, whereas radio changes are usually done overnight and are very dramatic.

Some of these changes appear to be knee jerk reactions, panic decisions that are based on some numbers and not on what the products or core values are.

In Calgary, some radio stations change their formats more frequently than I change my Facebook status. The decision to change a station format is generally based on audience loyalty (or lack thereof) which is determined by the measuring stick called BBM. Obviously, ratings are important as they determine advertising rates and sales - which is why stations rely so heavily on their verdict.

In my opinion, the method of gathering data by BBM is dated and renders inaccurate results of the actual market. I've participated in these surveys for TV and there is no accurate way of monitoring exact use unless it's electronic and synced to the device that is being monitored. At best it is a partial sampling of some of the listeners in a market.

The only saving grace is that BBM is what all stations use, so they're all playing with the same deck of marked cards. The BBM is comprised of surveys filled out by listeners who jot down what they are listening to in a diary... yeah, by hand - you can imagine how accurate this is. This type of survey is great if it's 1972... hopefully there's some better way to accurately measure listening habits of people, what with the interwebs and such. In fact, I believe an electronic version is in the works, and I trust BBM is leading the charge in this so they can remain the leading authority on all radio ratings, as they do have a great reputation in the industry.

So, radio stations use the BBM reports to measure their market share and make a lot of their programming decisions based on the findings of these reports.

Here's how it plays out:

About two years ago, a new station starts up and promotes themselves as Calgary's newest music source, their format, meaning what their positioning statement and their playlist is comprised of is considered 'good music'. And, after 3 or 4 BBM reports with no measurable impact (no upward swing in audience) they revise their format and try to target a niche that is open, they call this new format 'classic alternative'. For 1 maybe 2 BBM reports, they operate under this clever new format (if you are an avid music listener you may consider this format a bit limiting and somewhat laughable) and realize that it isn't helping so they change their format again, this time a complete change up, to 'Top 40' - which these days is mostly pop, dance and hip-hop.

So, what this means is that for about 2 years they hooked listeners with the promise of one type of music (good music), slightly modified it in hopes to increase their share of the market and then completely changed their offering.

In measuring the performance of a radio station, Average Quarterly Hour (AQH) ratings are important, but so is loyalty (that's where most of the AQH comes from). Changing formats does nothing to increase loyalty, in fact is has the exact opposite effect. The listeners that were happy listening to Green Day and Pearl Jam are for sure not tuning in now that Britney Spears and Fergie are playing. This means that they are starting at ground zero with their audience base and discarded the loyal listeners they earned in the process.

I genuinely feel sorry for the marketing people at these stations, for months they work on branding and positioning a station as THE place to be for XXX then after two bad BBM reports, they are repositioning to be YYY.

This is a black hole to which no amount of marketing can escape.

It happens all the time in radio. And, it's the stations that consistently change their formats that are always the ones struggling to keep up in the ratings game.

Marketing and brand building comes down to a being authentic, being true to the brand and what it stands for. And, if it's a good idea don't waiver - don't stray from your brand motto, you can make subtle changes and modifications to keep up with the market, but never make and about face change - that is almost certain death for a brand. (insert link to new Coke here)

Some good examples of local radio stations that have stuck to their guns over the years and remain successful because of it are as follows:

CJAY 92 - Classic Rock and has been for a couple of decades - they continue to be in the top half of the ratings game year after year. Many stations have tried to knock them off their perch, but have given up after a few bad BBM's and changed their format - this only strengthens the loyalty of listeners to CJAY.

COUNTRY 105 - Western Canada's country music powerhouse, not because they're the only country station, quite the contrary, it's because they have remained true to their original vision - sure some of the announcers have changed and the playlist has adapted over the years with the whole country music genre, but it's still the same great brand as it always was.

CHQR 770 AM - Calgary's talk radio station and has been for some 18 years, the talk format is definitely the best use of AM radio. The format of a talk radio station is very similar to a TV station in that people will tune into their show, not necessarily the station - this helps and hurts the ratings - but they've got a huge loyal audience.

Kudos to these three local stations for staying true to their brand.

When you think about it, who would want to invest any time in becoming a fan of a new radio station when you know that the first sign of a ratings drop they will change format? Radio is no different than any other brand, make adjustments to your current product, don't drop it and try to reinvent yourself unless the brand idea is no longer relevant (like a disco station would have been in 1982).

When it comes right down to it, commercial radio is no different than any other product in the grocery aisle. You build a brand through loyalty and delivering on peoples expectations consistently. Sure change is inevitable, but it can't stray from what your core values are as a brand. Be true to your brand motto always.

I still love peanut butter and I still love radio, especially now with Satellite Radio.

These days I listen to Little Steven's Underground Garage on Sirius - with DJ's like Little Steven and Andrew Loog Oldham you are treated to some great inside stories and some 10 minute intro's into songs - it's back to being an entertainment source for me and I can't wait to turn on the radio to hear what's going on...

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