The New York Times points out that research and development initiated by the U.S. government is often a way of determining how the future will unfold. Of course, the U.S. is the world's biggest investor in R&D, but its overall spending has been going down since 2002. Not surprisingly, The Times' analysis finds this alarming.
The article also notes that R&D spending is another way that financial analysts judge how a company might fare over time. As they point out, "It's one of the most important sources of value creation for any company and can reveal much about its prospects." So, now segue over to terrestrial radio.
From our view at 35,000 feet, we see situation after situation where research spending in radio has clearly diminished. While some companies continue to approach research in the same methodical way that healthy people get an annual physical, many others have quietly cut back on spending as their economic situations have become more dire. We get it - you have to cut somewhere. But is research the best place to reduce spending, especially at a time when radio is under fire from any number of competitive challenges?
While this entry is not a shameless plug for Jon, Larry, Mark, and the other traditional folks who have done radio research for eons, the decline of R&D in radio might be telling us a great deal about where we're headed as an industry. But perhaps it's also a statement about the type of research that stations have been buying and researchers have been conducting. As a young research guy at Frank Magid back in the '70s, I can tell you that today's research studies don't look a whole lot different than the ones we designed back then. Music was still being tested in Marriotts during the Disco Era, just as it is today.
This is not a knock on radio's cadre of research firms. As a rule, they are dedicated professionals, trying to provide actionable data in an environment that is changing rapidly. The "cell phone only" situation is just one example of the difficulty of gathering data, and representing everyone fairly.
This is another reason why we have championed Web polling, a different way of plugging into radio listeners, and one that is perhaps more stealthy, agile, efficient, and cost-effective. Web polling may have inherent flaws, but over time, we have watched our results echo more traditional approaches. And because it is quicker, easier, and less expensive to gather, it provides broadcasters with answers in less time, while it offers an opportunity to ask different questions.
Just as Kodak rejected the idea of digital cameras while the company hung onto its waning film franchise, we need to look at research, and the larger concept of R&D, through a different lens. What new technologies and techniques allow broadcasters to better understand today's fickle audience? How do we answer the big questions of the day to help steer radio companies back into the competitive mainstream? How do today's consumers view terrestrial radio, and what tools and assets does the business have that enable it to more effectively compete in the digital environment?
As advertising chieftain Mark Kaline told the radio industry a few months back, "Get comfortable with being uncomfortable." Research mavens - and we have some awfully smart people in our business - should challenge themselves to come up with new, better, more modern, and more flexible ways to get at the answers that radio execs need. Determining who is "the Classic Rock station" or "the station that plays too many bad songs" is interesting information, but isn't helping radio solve the more pressing problems at hand. It is no longer an issue of just the station across the street - competition today is coming from sources far removed from the AM and FM bands.
Everyone in radio needs to engage in more R&D, but those dollars need to be spent wisely and strategically. And CEOs need to understand that belt-tightening that chokes off R&D may help fourth quarter numbers, but it is a long-term recipe for disaster.
As The Times' article concludes, "Where will all the innovation come from to drive the American economy of the future?" Sub out "the American economy" and plug in "terrestrial radio" and there are some good questions that deserve some thoughtful answers.