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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11 July 2009

Mmmm.... Peanut Butter! Part 1

Both radio and peanut butter have humble beginnings, making their big splash this side of the border. Marconi used Newfoundland to receive the first Trans-Atlantic broadcast and Edson patented peanut butter from his residence in Montreal.

Canadians are awesome. (insert smiley face emoticon here)

A number of years ago, in the grocery aisles where I grew up, there were three dominant brands available to consumers: Skippy, Squirrel and Empress.

Empress. What can I say, it was the Safeway store brand before there the invention of no name or generic products. It was a decent enough product, and half the price of the others. You knew better than to ask for allowance when there was Empress in the pantry cause things were tight if we were eatin' store brands. Quality was always good, but flavour was a bit lacking and this was true of most of the house brands, the jams that Empress made however were top shelf. Today, the Empress brand is reserved for jams only, other products along with the peanut butter moved into large tubs with lousy packaging that equal the taste.

Skippy was the fun one, it had colourful packaging, and was noticably sweeter and smoother than the others - their secret was the use of icing sugar rather than granular or liquid sugars. The packaging was marketed to kids, and as a result, it was the top pick amongst us kids. The Canada Corn Starch Company manufactured this under the Best Foods banner until it was sold to Unilever in the 1990's.

Squirrel peanut butter was a novel treat from time to time as it gave you one of the first unique packaging experiences known - when you opened the jar you were greeted with a whole peanut, sitting on the top of the peanut butter. The first scoopful was always a treat - the rest of it was so-so, mostly because it wasn't the kids first pick. I may be wrong about this, but I believe Kraft had this under their umbrella and manufactured it for many years before finally selling to Best Foods in the 1990's. CCC, AKA Best Foods, quickly liquidated many of their lines which included the unloading of Squirrel and Skippy to Unilever.

When Unilever acquired both Skippy and Squirrel, they decided the consumers only needed one peanut butter or they only wanted to manage one peanut butter with the accounts. Customers wouldn't notice, or if they did they wouldn't be vocal about it - luckily I didn't have this blog then. They did it slowly, they slowly killed off the number two seller in the category. Some companies in the food industry would die to have number 1 and number 2 sellers in a category - there certainly must have been other issues to arrive at the decision they did to nix the poor squirrel.

So, Skippy came out on top and its name would carry on down the sales trail - but how exactly would they 'off' good ole Squirrel? Well, they decided to do somewhat of a merger of the two brands - a sort of brand integration 'til the end. I actually would have advised the same tactic at the time. They merged the two brands by calling it Skippy the Squirrel and in a collaborative effort between wordmarks and fonts the slowly worked the squirrel out of the brand. It was the Skippy formula with the Squirrel peanut on the top... for a while.

Whether through customer feedback or just sheer lack of understanding of their brand legacy, they changed the formula and dropped the whole peanut. And, over time, the packaging featuring the little mascot squirrel and the name squirrel started to shrink, and each time you purchased a jar, it got smaller and smaller until one day they were gone entirely. Gone from the shelf, but not from our memories.

I used to love having a peanut butter sandwich... raspberry jam was my all-time favourite, but strawberry jam or honey worked out nicely too. And, if my dad taught me anything it's that the amount of peanut butter is at the very minimum twice as thick as the complimentary spread - dad always made the best peanut butter sandwiches, not sure if mom was spreading it thin as a means to make the jar last longer or she just didn't know any different. I never told her this fact because she would change it for sure and there would be no difference between the two - then dad's wouldn't be looked forward to as a treat.

These days, a bit of me gets disappointed when I eat a peanut butter sandwich. I get excited about the idea of a PB and J, I lay out the bread 4 up on the counter with the tops of their crusts touching. My mouth waters as I make the sandwiches, but when I take the first bite, something is different. It's not the same. Is it that I am old and loosing my taste buds? I don't think so. I think the formula has been changed ever so slightly over the years, a bit here and a bit there... enough to make my childhood treat, my comfort food, my sit back and relax snack, a distant memory.

Don't get me wrong, I still enjoy the sandwich, it's just different. It's not the same as it once was. And, it once was great.

Kevin's helpful shopping tip: if you're looking for real jam, it should read 'jam' on the label, fruit spread is not an acceptable substitute in my book.

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03 July 2009

Steadfast and True

Business is booming right now for us. It's encouraging to know that all the hard work my staff and I have put into making Francomedia a great company has not gotten washed away or eroded with the global recession we are faced with.

Quite the opposite in fact. Despite the downturn in the economy, we have posted two record setting months; April and June. And, I think that's just the beginning.

2009 hasn't all been great though, we did operate for 2 months at a loss and 2 months of just breaking even. I was expecting 3 or 4 months of down time and although I didn't really budget for it, I managed to keep everyone employed while things got back to black.

What I didn't count on was the swell of clients coming to us from agencies that have been taking advantage of the market conditions prior to the winter. When I say taking advantage, I mean over-charging. The market turned in October, and when things get tight, the first thing many companies do is look to cut some dead weight and reduce expenses. They begin to analyze their spends a little bit.

When they see that their ad agency charged them $200 to burn a CD of their own web assets they begin to question the relationship and the value they're getting - and justly so. Soon, they begin to shop around for another agency or service provider.

We have been on the receiving end of more than a few of these companies that were looking for some 'fresh ideas' and honest billing.

Luckily, we've built a solid reputation in the market place for being very creative and we operate cleanly. Meaning we are fair and honest with all our clients. Sure, we could have taken advantage of things when times were good, but that's not in our make up - that's not who we are. Making money has never been our primary objective, we've always put the work first. 'Be creative and serve the clients needs and the money will follow' - that's what I've always believed.

It may not be the best business strategy, I understand a business needs to be profitable and make money, it's just not our sole purpose. Making money is a necessity and a benefit of what we do, our purpose is creation. At times it's tough to balance and sometimes we give clients ridiculous deals just so we can do something creative.

So, the tide is turning and our reputation is prevailing. More and more companies are coming to us and looking for some good old fashioned, honest, creative.

We are happy to oblige.

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