JacoBlog - Jacobs Media's Blog

I Want My MP3

By now, everyone knows the dilemma.  Whether you're Toyota, Chrysler, or Hummer, there are simply too many cars on dealer lots.  At a time when consumers have pulled way back on spending, and loans are tough to acquire, the auto industry finds itself in the quagmire of all quagmires.

But what about consumers who actually want to buy or lease a new car or truck this year?  Our Tech Poll indicates that among our rock sample (more than 21,000 responses overall), 12% indicate they're planning to purchase/lease a new vehicle this year.  

That's no small number.  So what are they looking for, and how can the automakers best market to this critical group? 

That's the question we asked, related to features and options in the dashboard entertainment department.  So, side airbags and rear-wheel drive aside, here are the key features that consumers find to be most important:

Once you get past the obvious - AM/FM radio and a CD player - the big winner is an iPod connector.  Nearly half of our prospective car buyers point to iPod connectivity as a major desire in their next vehicle.  And check out what's well down the list - a DVD player, satellite radio, and even HD radio.  Yet, how many expensive car ads do you see touting Sirius XM?

The new Kia Soul commercials have the right idea - hamsters driving around, jamming out with their iPods plugged into the dash.  For the other car makers, all it takes is being on the ground, researching your consumers, to see what they value in their next car and what moves the needle.  

It sure would be nice to see more new cars on the road, especially a few more Malibus, Fusions, and Chargers.  And maybe it's as simple as figuring out what consumers want, and giving it to them.  

It works in radio.

Blowing Up The Brand

"You either have a strategy that could win for the brand even with the competition or you basically have to stop, and our conclusion was we didn't have a strategy we were satisfied with that could let us win with FILL IN THE BLANK.  We don't have the resources or the marketing muscle to put behind the brand, and our conclusion from that was we need to discontinue the work we are doing there." 

So, who said this, and what is he talking about?  

It's new GM CEO, Fritz Henderson, and the "blank" is, of course, Pontiac.  However, he could have been talking about any number of radio stations - and that's the point.  We often get stuck on our brands, long past the point where they have any viability left. 

It's easy to get emotionally attached to a brand, and for an old school Motor City guy like me, this is truly the end of an era.

Back at Cooley High School in Detroit, the main after-school activity was cruising the perimeter of the school in some of the coolest muscle cars you've ever seen.  My favorite of them all was Chris Hofer's 1964 GTO - the first year that Pontiac came out with that incredible muscle car.  The headlights were still horizontal that year, and the car just kicked ass.  

Like the first kiss, I never forgot that Goat - white exterior, red interior, and just an incredibly hot car.  It singlehandedly vaulted Chris from his "just another guy" status to one of the cool guys in the school.  I'm sure all those girls remember that car, too.

But alas, after all those years of Bonnevilles, TransAms, Firebirds, Fieros, Sunbirds (yes, we're heading downhill), Aztecs (that one may have done it), and G3s, the brand is literally out of gas.  Even those cute little 2-seater Solstices couldn't re-energize Pontiac.

How many radio brands are facing the same dilemma?  Through the years, there have been format changes, modifications, adjustments, morphs.  Relaunches, restarts, remarketing campaigns, repositionings.  In the mornings, more music, all music, all talk, talk plus music, syndication, local.  

Bottom line?  In the mind of the consumer, there are better brands, newer brands, more exciting brands.  Without the baggage that the name "Pontiac" conjures up.  

And perhaps that is a big part of what's motivating GM.  They can now focus on their "keeper brands" - Chevrolet, Cadillac, GMC, and Buick (OK, you got me there).  Just like how broadcasters might focus on the other more viable stations in the cluster... if they could just get rid of that dog station that keeps sucking money and resources, they'd be in much better shape. 

It takes a lot of guts (not to mention pressure from the Obama Administration) to blow up Pontiac, take your lumps, and call it a day.  But like a lot of tired radio brands, GM will be better off without this albatross.  Sometimes you just have to suck it, make that tough call, and let it go.  It ultimately works better for the company, the audience, and if you make the right move, a new and better station can take its place. 

I still look forward to my first sighting of a '64 GTO at every year's Woodward Dream Cruise each August here in Detroit.  But like that old girlfriend, I know better.  Time to move on.

We Need More Ram

No, not that Ram, but the economic guru, Ram Charan.  Paul and I were fortunate to attend a conference that he keynoted, and moderated.  If you've never heard of him, Ram is a visionary economic expert, and full of wisdom and philosophy that is especially pertinent during these trying times.  With one part Maharishi Mahesh Yogi (advisor to the Beatles), one part Yoda (advisor to Luke Skywalker), and a couple of parts of his own unique blend of learning and smarts, Ram provided perspective, guidance, and motivation in ways that bear repeating. 

For the purposes of this post, there were a few key takeaways from Ram's presentation that I wanted to share with you because they apply to all industries.

How are you communicating with your employees right now?  Ram talks about how the key is to muster up the right combination of integrity, intellectual honesty, straightforwardness, and the skill to confront reality.  He makes the case that companies need to focus on the vision of what is possible, so employees have a sense of what can be done.  As he calls it, "realism tempered with optimism."  It's a balancing act that wise CEOs must acquire in order to best utilize their key staffers.

How are you going about understanding what your target customer is thinking?  Ram calls it "the information bridge," using the power of observation to better understand what's going on.  While he emphasizes the importance of understanding a company's (station's) metrics, Ram feels that greater wisdom to create "game changers" comes from spending time on the ground with customers.  

This advice made us think of Dr. Ed Cohen's brilliance when he pushed us to design "The Bedroom Project" for Arbitron back in '07.  Of course, there was the part that you saw, that dealt with how young consumers are using technology, media, and gadgets.  That was important information for better understanding how they interact and consume media.  But the part that was proprietary for Arbitron concerned the PPM meter, the box that respondents receive, and the other "real time" reactions that can only be learned by observing consumers in their own habitat. 

Ethnography isn't cheap, but as Wayne Gretzky reminds us, “I skate to where the puck is going to be, not to where it has been.”  When I think about some of the visionary things we learned from "Bedroom" - the explosion of social networking sites, the desire for an elegant, all-in-one device like the iPhone, the way that young people were using their phone alarms rather than clock radios - it brought home Ram's prescription about how to learn from your listeners in order to create a better customer experience.  You don't get that from studying financials, Google analytics, or PPM reports. 

How can you seize the opportunity created by the recession?  Ram was all about strong defensive strategies - protecting cash flow, reevaluating employees and their skillsets, etc.  But he also posited that smart CEOs (and programmers) can capture market share during difficult times.  We talked about how some companies are doing just that at this time.

Hyundai used smart research (think again about spending time on the ground) with consumers to learn about how fear of job loss was curtailing the decision to buy a car.  By providing an "Assurance Plan," Hyundai created a game changer that the other car makers eventually adopted.  They have also been big advertisers, at a time when it would seem more prudent not to spend.

Dunkin Donuts and McDonald's have moved toward similar strategies - against Starbucks.  By understanding how Starbucks had diluted their brand with food, music, books - while not focusing on the coffee experience, they each aggressively and successfully created fiscally responsible coffee reputations.  At the same time, they have repositioned Starbucks as the home of the $4 cup of coffee - out of step with the times.  Another example of seizing the opportunity at a time when it might be safer to sit on cash.  

Ram's new offering, Leadership in the Era of Economic Uncertainty, unlike the typical "I've got all the answers" approach is basic, simple, and to the point.  It asks the questions that managers and CEOs ought to be pondering - and acting on.  As advisors to many companies, in and out of radio, it was a fresh reminder to Paul and me that we are living in unprecedented times.  And despite the pressures, the angst, and the darkness, there is a way out of this.

Ever Heard of Spel Checing?

Ask anyone in my office - if you want to get my day off on the wrong foot, just let something out of our office with a typo.  Of course, it happens.  We're all human.  But when I see some obvious mistakes that spell checking would catch - well, it makes me a little nuts. 

That's why whenever I receive a station email blast, and it's got one, two, or even more typos, it just makes you wonder how this stuff is allowed to happen.  When you figure that thousands of your best listeners are going to receive that kind of email, it just sends the wrong message. 

Same thing with the station website.  It's frustrating to see an otherwise good promotion or feature get deflated because of lame typos or other simple quality control mistakes that should have been caught.  I realize that radio stations, like many businesses, are staff-challenged.  Oftentimes, there just aren't available people to catch these errors.

But on the other hand, if you're in charge of emails or updating the website, and perhaps you were more focused on Radio 101 in school than you were on English Lit 400, get some help and assistance.  Sometimes, I find the best way to make sure there aren't problems is to read an email or a blog out loud. 

Just so you don't feel bad, the incident that inspired this blog occurred recently on a Major League Baseball field.  It seems that when you suck, things can only get worse.  The Washington Nationals - the worst team in baseball - were on the diamond wearing these snappy uniforms.  

GO NATINALS!

One Billion!

Years to one billion sold: 15

 

Months to one billion downloads: 9*

*In a recession

Tulsa Time

Last week, Paul and I were treated to something you don't see or hear about very often in radio these days - a large group of positive broadcasters, eager to learn, grow, prosper, and serve their communities.

We were invited to present by Oklahoma Association of Broadcasters President Vance Harrison.  This year's convention was held in Tulsa, bringing together some of the most enthusiastic radio and television professionals you could ever hope to meet.  While we so often hear about jaded radio folks, especially in the Top 5 markets, the scene at the OAB was anything but.

Vance put together a great agenda, and it was heartwarming to see so many radio folks realistically sizing up their situations, and forging ahead in a positive, energetic way.  Oklahomans aren't into gimmicks or steroids.  A "Less Is More" campaign wouldn't fly with this group.  Instead, the OAB was about doing it the right way, staying profitable, and being community-focused.  Hundreds of broadcasters showed up, there was a huge, well-sponsored exhibit hall, and sessions that were well-attended and enlightening. 

It was a great wake-up for Paul and me, and reminiscent in many ways of Michigan Association of Broadcasters get-togethers I've had the pleasure of attending in recent years.  We ran into some major players along the way - attorney David Oxenford (David Wright Tremaine) and Learfield's President & CEO Roger Gardner.  But we also spent some quality time with salt of the earth, lifelong broadcasters, like Dorea Potter, whose Bartlesville operations are proud to call themselves "hometown stations."  And along the way, the great team at KMYZ - Chuck Browning, Paul Kriegler, and Kenny Wall - whose Alternative station - Z104.5 The Edge - has survived the ups and downs through Cobain, Alanis, Korn, and Kings of Leon.  And Chris Baker whose steady hand on legendary KATT has contributed to that station's brand equity.

Sometimes, we get so close to the trades, the transactions, Wall Street, covenants, debt loads, operating synergies, hostile takeovers, and EBITDA that it's easy to lose sight of radio's value.  I'd highly recommend a state broadcasters association convention to reconnect with an industry that still has a great deal to offer consumers, communities, advertisers - and you. 

It was a great time to be in Tulsa.

A Bad Habit

If you regularly read this blog, you've heard me opine that living in Detroit in this economy often feels a lot like being at "ground zero."  As tough as it may be wherever you are reading this, it's a few clicks more desperate - and insane - here.  

Consider: Our mayor recently went to jail - before resigning because of a text messaging sex scandal.  Our core economic base - cars and trucks - is in the throes of bankruptcy.  Our football team just went 0-16.  We are in danger of losing the North American International Auto Show - here in DETROIT!!! - because our City Council meetings resemble mud wrestling tournaments.  

But if you do morning radio here in Detroit, it's a fountain of great material.  Whether you're Mike Clark, Deminski & Doyle, Dick Purtan, or Paul W. Smith, there is never a shortage of things to talk about, parody, or stir up on the phones.

There's only one problem, especially for a fiftysomething guy like me.

We don't have a newspaper in this town anymore.  Oh sure, the Detroit News and the Detroit Free Press still publish, sort of.  But home delivery is down to three days a week.  On the other four days, you either pick up an abbreviated edition at newsstands.  Or you still subscribe so you can go to a website where you can still read "the paper."  Or you can go to www.freep.com and read a less detailed web edition.

In short, it sucks.  Because reading a daily newspaper is a habit that you just cannot practice on certain days of the week when it economically suits the Detroit Media Partnership, the company that now runs the business operations of both papers.  And the only real alternative - the suburban daily, the Observer Eccentric papers - shut down last week. 

So, you know what's happening?  I'm getting out of the newspaper habit.  I find I'm reading the Sunday paper, but I'm even losing interest in it.  

And yet, all kinds of things are occurring in Detroit.  Major films are being made here, under the auspices of the Michigan Film Office.  The Wings and Pistons are in the playoffs.  The NFL Draft is this weekend, and you never know what the Lions are thinking.  Will GM have to declare bankruptcy?  But I'm not reading about these events in any paper.  I'm sort of web wandering to find the news.

This isn't how the Detroit Media Partnership planned it.  I'm supposed to get hooked on the online subscriber model, and pay for my web version of the Free Press.

It's not happening.  I appreciate how newspapers are grappling with trying to find a viable business model.  As we have often discussed in this space.  Radio better be taking copious notes while we watch newspaper companies flail away at different concepts and monetization strategies. 

To some degree, our new Tech Poll speaks volumes about the dilemma being faced by big newspapers.  Overall, less than 60% of our respondents say they now read a daily paper on a regular basis, with the highest readership coming from upper demos people like me.  And among 18-34s, less than half now read a newspaper with regularity.  

But here's the rub:

Among the heavier 25-54 readers, half lean toward the print format.  Among the lightest newspaper fans, it's reversed as they skew toward the online edition. And yet, the Detroit papers are trying to entice their most regular readers toward a format they are less likely to embrace.  What a mess.  

And then I started thinking what would happen if an embattled radio company took the same approach as the Detroit Media Partnership.  Imagine if your favorite radio station made this announcement: 

Because of the economy, we can no longer afford to broadcast seven days a week.  So, on Monday, Tuesday, Wednesday, and Saturday, we're shutting off the transmitter.  But you can still access us on our websites.  The same great programming, but on those days, you'll have to listen to us online. 

Yeah, right. 

We may be moving along technologically, but there's a lot to be said for habit.  Let's face it - for morning shows and stations themselves, it's often about getting into that everyday habitual listening that moves the ratings needle.  You can't broadcast only sometimes, and build the kind of consistency necessary to become a regular part of people's lives.  And you can't limit home delivery to certain days of the week, and expect consumers to chase your content on the Internet. 

This is a bad model, and I now wish the Free Press would have come to its customers with a request for a price increase.  It probably tested poorly in their focus groups, but I would definitely pay more if that damn paper were in my mailbox everyday.  After going through this checkered experience the last several weeks, I bet I'm not the only one that feels this way. 

Meantime in radio, we have to figure out a way to keep that habit going, keep the content coming, and do a better job of marketing our brands in a tough economy.  But trust me - whatever we do, let's keep the transmitters on.

Say It Ain't So, Bono

At a particularly important time in the struggle over performance fees, an important voice has been heard.  Bono, expressing thanks for all the radio support U2 has received, has come out in support of a performance royalty from radio.  Here's his thinking:

“While we [the band] have many friends at radio and appreciate the many things that radio has done for our band over the years, we believe it’s only fair that when radio makes money by playing a recording artist’s music and selling advertising, the artist should be compensated.” 

Bono is a person who speaks his mind, and his opinions about the world's injustices are well-known and respected.  He has the ears of heads of state, and well-respected thinkers worldwide.  In this case, however, many in radio - and I heard from a number of people - are angry over what they see as a poorly timed statement.  Just last month, U2 received an incredible amount of support from radio for special programming heralding their new CD.  Again, timing is everything.

It makes you wonder about how radio ought to calculate its value, and why the labels - and smart guys like Bono - cannot grasp the difference between spins on Pandora, Sirius XM, or a sporting event - and broadcast radio.  Our new Tech Poll says it all - given all the different sources that consumers use to find out about new music, there's only one that really matters:

And if you think this poll is skewed toward radio people (well, it is), knock 15-20% off that big FM radio bar, and it's still no contest. 

I am often skeptical when I see promotion directors put together client pitches that add the value of hundreds of mentions and promos for proposals.  But it's a valid exercise when you consider the incredible amount of intangible benefits that artists like U2 derive from radio - when they have a new album or single, when they play in concert, or anytime they ask.  

There are a lot of difficult decisions being made these days in conference rooms all over the world.  They aren't always easy and they aren't always kind.  

Looks like Bono just made his.

Not So Festive

As more and more businesses and institutions are under distress because of the weak economy, it should come as no surprise that music festivals aren't getting a hall pass.  The LA Times reports that many are under serious financial pressure, while some are going on hiatus or simply shutting down. 

The Langerado Music Festival in Florida was canceled due to weak sales, the San Francisco Blues Festival is taking a year off, and the Appel Farm Arts & Music Festival in New Jersey is officially on hiatus.  A similar weakness in festival revenue is occurring overseas as Scotland's Hydro Connect Festival and Britain's Red List Live have also been put on hold.

So how do you explain the success of this year's Coachella Valley Music & Arts Festival, now in its 10th year?  Coachella's founder, Paul Tollett, has the answer:  Classic Rock.  With the addition of Paul McCartney and Roger Waters, Coachella has a lot more to offer than the standard fare like Kings of Leon or the Killers - both great bands - but how many expensive festival tickets can they sell.

As Tollett notes, "Prince or Roger Waters or Paul McCartney - artists who haven't done a million festivals - it helps give us a unique outlet."  Well, yeah, and it also doesn't hurt that they are legacy acts that guarantee ticket sales because of their huge followings. 

To read some of the worshipful McCartney blog reviews, click below:

>Click here for the LA Times Coachella Music Blog

>Click here for the NY Times Coachella "Paul McCartney Ever the Uniter" Blog

So, it shouldn't surprise anyone that marketers are depending more and more on heritage brands that have stood the test of time.  New ads for Post Shredded Wheat, Lowe's Home Improvement, and Allstate are all pointing to their time in grade, and their stability during uncertain times.

As Lisa Cochrane, Allstate's VP of Marketing points out, "We're trying to bolster trust and confidence by saying that we started in the Great Depression, and we survived 12 recessions.  We're saying we know how to approach things." 

The same could be said for heritage radio stations - not the stations that seem to be in the "format of the month club" - but brands that have been around for decades.  As newspapers die and other media companies come and go, a radio station that has been there for both advertisers and consumers over the years has a leg up in this economy.

As cluster managers and corporate bean counters go through the trying process of determining who should get available resources in this environment, special consideration should go to station brands that have longevity and credibility.  There have been too many instances in post-consolidation radio where great stations have been left hanging because of the company's penchant for treating all stations in the cluster the same.

They aren't.  And to starve great heritage radio stations is short-sighted, and ultimately damaging to the company.  There's a difference between McCartney and The Knux.  Just ask Paul Tollett as he's counting his box office receipts this week.

Have You Seen It?

Last week proved once again the power of video streaming - in both incredible and horrifying ways.  On the touching, moving side, Britain's Got Talent gave birth to another star.  This time, it was the unlikeliest of the unlikeliest - dowdy Susan Boyle knocked out the judges on the British version of American Idol.  This video - when I finally got around to it - had already been viewed more than 19 million times (and there are several other versions of it floating around YouTube and the Internet, too).  There's nothing more powerful than watching these judges - including Simon Cowell - get blindsided on video.

Forty-five years ago, when the Beatles played on The Ed Sullivan Show, there were only three TV channels available, and Americans all watched the same shows.  It wasn't difficult for overnight hits to be born.  But in today's fragmented, "Long Tail" world of entertainment, viewing is dispersed across thousands of outlets, making it so difficult for mass appeal hits to materialize.  Those who are moved by them pass them on to friends, co-workers, and family members.  That viral quality creates even more impact.

We're seeing this big-time in our new Technology Poll, just released to our participating clients last week.  Video streaming continues to become more popular among just about everyone.  More and more, consumers are spending time with streaming video, and while YouTube is still very hot, network television sites, Hulu, and even radio websites are moving up in our survey.  This speaks to the need for radio to be thinking more visually - a drum we've been beating for several years now.  Personalities, jocks, and programmers need to get past "the theater of the mind" and embrace the change that video has ushered in, or else we'll end up like Kodak, who was in denial for too long about the impact of digital photography, while trying to hopelessly protect their film franchise.

 

What's the dark side of YouTube and video sharing?  Domino's Pizza felt the power (and the fury) of word-of-mouth last week when a couple of their employees in Conover, NC created a crude homemade video, depicting gross acts during the preparation of pizza.  They posted their masterpiece on YouTube, and of course, it spread like wildfire.  Before the video was pulled, 1,000,000 viewers watched in horror.  While Domino's fired these employees (who have been arrested on felony charges even though the tainted food was not delivered), the brand damage was done.

A company spokesperson, Tim McInTyre, noted: "We got blindsided by two idiots with a video camera and an awful idea."  And in the process, online surveys show that Domino's reputation has been seriously dented by the incident. 

Amazing when you think about it:

Two idiots with a video camera - and a nationally known and respected company is on its knees.

A middle-aged woman blows them away on Britain's Got Talent, and we're talking about it thousands of miles away.   

How can your radio station harness the power of viral video to overcome negligible marketing budgets during a time when YouTube might be a better tool than buying 350 GRPs a week on your local television stations?  

How can your morning show enhance the experience and create buzz with tools such as webcams, viral video, and the power of your consumers? 

(Just don't spit on the pizza.)