Wednesday, November 28, 2007

A Great Programmer and Person

Got some sad news late on Tuesday that Jim Steel has passed away.


Jim was the Operations Director for the Clear Channel stations in Lincoln and Omaha when I worked with the markets. Jim was just working with Lincoln at first, but the management team couldn't get enough of Jim so he ran between the 2 markets taking on all kinds of exciting and challenging programming experiences. He handled all of them with exceptional leadership, creativity and a deep love for the art of programming.


Jim had the love of music, the love of people around him and one-ness with the audience. All the ingredients of great programmers. Both markets grew from his efforts. He also deeply served his community - helping with any project he could find time for.


Jim called one day and explained that he had ALS - Lou Gehrigs disease. It was a sad moment for his family, the teams in both markets and all Jim's friends throughout our industry. He fought ALS for the last 5 years or so. Even though his condition became worse the stations fought to keep Jim on-board and did so with e-mail communication and stopping by to help him through the day at his home. Clear Channel owned Lincoln till last last year and still owns the Omaha stations and kept Jim on board through this awful disease.


No doubt it was a long battle with a terrible disease. Jim - we'll miss you and remember your leadership, creativity, and love of radio, but most of all we'll miss a great person.

Friday, November 16, 2007

Sample Sizes and PPM

Arbitron continues to face a lot of challenges in rolling out PPM. On one side we have the reality that some ethnic formats are seeing less listening in the PPM system, on the other side the weak samples, especially in the younger 18-34 demos, are also a big concern. It sort of came to a head this past week as the news hit that Clear Channel, Cox, Radio One and Cumulus crafted a letter that calls for a full review from Arbitron. It's also spread to the media with NYC newspapers sounding some alarm bells.

Sample sizes are really at the heart of the issue. With the big increases in cost for each participant in PPM Arbitron is looking for ways to keep the sample as tight as realistically possible. In the diary samples in the medium and smaller markets 18-34 returns have been a disaster for nearly 20 years. Arbitron has tried to pay more and recruit harder but we still end up with a lot of books out there where 18-24 and 25-34 males (and even females) are doubling the value of the diaries to make the demo samples match the population proportions.

The reality in PPM is that the samples are a lot bigger than the 30 response minimum Arbitron requires to print a demo in the big PPM markets. There is no planned PPM market where there is a danger of living with as few as 10 people as rumored. You have to keep in mind that with the PPM meter keepers holding the device for every day of every week for up to 18 months you get a lot more data than in a diary system.

Look at it on a monthly basis. Let's say in a big market you have 1000 diaries in an average month. In any given week you have an average of 250 people with a diary to fill out. Now let's say you have 500 people holding the meters, bet remember in any given week you have all those 500 meters gathering data. In the diary system you only had 250 people so the data collected is really on twice the sample and a lot more reliable.

The big issue here is the 18-34 sample. As long as we are using land line phones to reach them it's a losing battle. This group is mobile and ignoring land lines for cell phones at a rapid rate. Till Arbitron finds a way to reach them via Text, IM, Email or maybe even in person they will be challenged in these demos and have to weight them up a lot.

The other issue is costs. They are paying more to PPM households and in some cases paying a lot more to hold them in the sample. Arbitron hasn't really spelled out the compensation, but off the record comments from some insiders claim it's a lot more to insure a successful roll out. PPM is a different system than the diaries and comparing the two in sample is misleading.

We all know we need PPM to compete with the stronger metrics advertisers get from other media. No question PPM is a lot better and more accurate than the old recall diary system. Both sides (Arbitron and the stations) need to work together and listen to each other carefully.

Monday, November 12, 2007

Recession

Surely CNBC will have bigger ratings as economic issues are clearly taking the spotlight. Rising Oil, the mortgage lending mess, the weaker dollar and the high cost of the war are starting to all combine and head us close to or into a recession. Retailers are already expecting a weaker holiday spending session and we've already seen the auto industry struggle for most of the past year. It's also affecting radio as the results from 3rd quarter in radio are disappointing and in some groups it's more about 'just getting 07 over with' at this point.

So let's say we go into an official recession which would probably be declared after more than a few months of a significant decline of economic activity, according to the National Bureau of Economic Research. According to the NBER we've been chugging along for the last 7 years without a recession - look at the history of 'official' recessions for the last 60 years:

July 1953-May 1954 10 months
Aug. 1957-April 1958 8 months
April 1960-Feb. 1961 10 months
Dec. 1969-Nov. 1970 11 months
Nov. 1973-March 1975 16 months
Jan. 1980-July 1980 6 months
July 1981-Nov. 1982 16 months
July 1990-March 1991 8 months
March 2001-Nov. 2001 8 months

They are usually not that long and over the last 20 years we've only 2 of them lasting a total of 16 months.

I bring this up not out of a desire to give up radio programming for economics, but perhaps to help your team as you plan for 08 just ahead. We shouldn't let the 'R' word worry us even though there will be lots of 'hype' around it. We also shouldn't let the 'R' word spook our advertisers and the teams inside the stations.

Remember we sell advertising and there are always products and services looking to brand themselves regardless of the economic conditions. Actually a recession is the perfect time to build a brand. You will likely see less competition, less clutter around your message, and remember the audience is STILL THERE. Just because they may be holding their wallets a little tighter they are still looking for entertainment and we offer it for free every day.

Wednesday, November 07, 2007

Promoting With Sales - Good? or Bad?

We all know the scenario here. Programming doesn't have any big money for a book promotion and puts together an idea to give away a big prize. For this example let's say it's a motorcycle. So the sales team goes out and tries to cut a deal for a bike. Often we see the dealer, who was going to spend 15K over the Spring months on the station, decides 'let's just give them a bike and I've got tons of exposure' (probably more than 15K) and since the dealer only paid 10K for the bike he's got a real deal. So he cancels the 15K order and shines up the bike for the promotion.

Meanwhile the station loses the 15K he would have spent in spots and probably the sales team loses a pile of the commission on the deal. From the sales and revenue picture this doesn't look like a good deal at all and the Sales Manager, who wants to help the station, has to draw the line when he misses the budget and watches his sales people working on this deal instead of spending time on 'real revenue' potentials.

There is a way to make this a deal for the motorcycle shop, the sales team, the revenue line and the programming side, but you have to look at all sides and build a promotion that has bigger potential and can involve more than just the motorcycle shop. Every market and sales scenario will be different here, but look at this example of a promotion outline and the revenue potential:

1. Motorcycle - Walk in 4K from the promotion budget and INVEST it in the prize. Put together a package for 12K with the bike dealer and you will pay him 4K for the bike as well as do the promotion with at least 10K of advertising exposure for him from sweepers, remotes, liners etc. Now sales gets 12K in revenue, still 3K less than they hoped for but at least they get 80% of the deal and there's commission for the team.

2. Remote Package - Put together a remote package with a big send off for the bike at a big bar and then sell packages with lots of promos, a schedule and a remote. You can price it over the usual remote since you have lots of extra excitement in the promotion. If you have a launch promotion for 2K and 8 smaller remotes at bars, retail stores, etc priced at 1.5K now you have 14K in revenue over the month.

Sales gains by having extra value added incentives to pass on without giving away inventory from the spot logs. Sales also gains by having a potential of 14K more in revenue for the month. The Sales manager is now looking at the potential of taking that 15K order from the bike shop and turning it into 24K of revenue even after we pay 4k for the bike in cash. Programming can have an exciting promotion that's all over the community and still have that book promotion.

It takes more planning and advance thought and it's not as simple as filling out the order, but both sides (sales and programming) end up with revenue potential and on-air excitement that hopefully will drive some ratings boost.

I know that every deal may not work like the example in your market, but I think you see the concept. Also many of you already do this, but you've learned that advance planning, organization, and being careful with the details. I've also seen examples that reflect more of the beginning of this story - where everyone has just tossed in the towel.

It works best when the programming team and the sales team commit to working together and laying out a solid plan WELL IN ADVANCE. Now is the time to start thinking for Spring 08. You probably know the budgets at the station level and if you lay the foundation before the holidays you have just enough time to pull it off by April.

Friday, November 02, 2007

Every Market Is Unique!!!

As consultants we often get tagged as a big part of the cause in the sameness of radio programming, along with the consolidated larger radio groups. Many see us as the pioneers with cookie cutter formats that ended up sounding the same in many markets. The same tricks, imaging, promotions, and music lists standardized.

While I can see the reason for the accusation with some I'm not a believer in the sameness of markets. Every market IS unique. I've worked in over 100 markets as a programmer, VP of Programming or consultant and there are obvious and clear differences in each one of them. Some of the differences come from the economic base of the market, the levels of education, housing situation, terrain, climate, heritage of the population, and their growth situation. Others come from the competition and the heritage of the station we are working with. And some just come from the style of the people in the area.

Some cities are friendlier, others more guarded. Some are more active and hustling, others more quiet and low key. Some are growing quickly, while others are watching their population and growth fade.

All of these are factors in helping a station reach it's full potential. If you don't take a careful and long look at all the factors in the 'market environment' you are going to leave audience, images, and dollars on the table that if wasted will limit your growth. It's also important to look at the competition and see who has impacted the audience and for what reason. For the real successful stations in always goes beyond 'the music position or mix.'

It does take an extra effort going beyond looking at perceptual research and ratings history. You have to 'get a feel' for the market and look at as much data as you can. Pouring over the Prizim data which defines the population into 15 social groups based on income, living conditions, occupation, age, and overall lifestyle. We used to get Prizim data in the front of the 'printed' Arbitron reports. But, it's not there in the E-Books and we also don't see it in Maximizer. I wonder why Arbitron took this page out? Perhaps no one was reading it, but it's packed with useful data on the real 'core' of the market and gives you a measurable system to look for key elements that make each market unique.

If you don't look at the unique moments in each market you are leaving A LOT ON THE TABLE. The key is getting as much data and also a real 'feel' for what makes a market unique.

One of the things I started to do as a PD was to take the first 90 days I was in a market and keep a log of the unique and different things I saw. I still do this in my notes on the first 2 market visits. The first impressions are always very important as you're eyes and ears are wide open to see the unique and different ingredients which are often the most valuable to key on. After you've been there a year as the PD I bet you don't see as many differences and unique moments as you did in the first 3-6 months.

If we want to really 'be local' and really connect with a community it doesn't happen because 'the community is just like someplace else.' It happens because 'this market is unique.' Cue on those moments in your strategy and tactics and you will make a much bigger impression with the audience.