Planting Brand Seeds

Radio - all radio, AM/FM, Internet-Only/Internet Simulcast Streaming - is about to learn about its next great challenge for listeners in-car.

It's no secret that AM/FM radio's final bastion of exclusivity - the car - is up for grabs.

Today's smart phones have legitimately removed the need for Wi-Max/Wi-fi for streaming radio consumption in-car. With my iPhone, I can listen to any Internet stream through my car sound system.

Ford's Sync system developed by Microsoft will be capable of providing in-car passengers the great personalized experience of Pandora.

So, how does traditional radio or any audio content found on the Internet get a leg up on its competition?

Ford's Sync system is a pioneer in in-car audio content delivery and its voice-activated capabilities, though limited for the moment, will expand very soon to provide for safer driver-audio system interaction. Most auto makers are making a 'reasonable effort' to minimize in-car distractions for motorists.

Paul Green, a professor at the University of Michigan Transportation Research Institute who studies the effects of distractions for motorists says that Ford's system should make it easier for drivers to keep their attention on the road.

This is why voice activation for selection of your personal audio entertainment is coming and all audio content providers must figure out how to tackle this challenge.

If I want rock music and I simply say "Rock" to my in-car system, what type of Rock music will it select. Who will categorize these descriptors? Which streaming station will be fed to me? How will this work?

All indications now are that motorists will preselect a limited bucket of 'stations' or channels they wish to have access to and thus the system will recognize the voice command. This may be as many at 50 preselected channels.

So, brand continues to be the secret sauce in this ever expanding "infinite dial" of options for in-car entertainment and strength of brand will continue to dictate popularity.

Meanwhile, radio's electronic measurement system - Arbitron's Personal People Meter - seems to be confining what traditional radio offers. The science of the device does not seem to encourage experimentation in programming and radio brands are becoming too generic which may inevitably hinder stations' ability to compete in the new world of voice search in-car.

But the branding process starts long before the new car owner uses this voice activated system.

Frankly, it starts long before now. It started yesterday.

Consumer habits are being formed every day and brand trust and expectation will go a long way for any content provider to land-grab in-car real estate.

If your company is competing in this brave new world, brand development and the delivery of the brand's promise should be job One starting today.

Because what you sow today will surely bear much fruit far down the road.

The Last Brand Standing

Choice is a good thing, right? Not so fast.

Having choice has its place, but the staggering array of consumer goods from which we must choose overwhelms the average consumer, and in a 2005 book psychology professor Barry Schwartz argues that that's not such a good thing.

In the book "The Paradox of Choice", Schwartz tells us that constantly being asked to make choices, even about the simplest things, forces us to "invest time, energy, and no small amount of self-doubt, and dread." There comes a point, he contends, at which choice becomes debilitating rather than liberating. Did I make the right choice? Can I ever make the right choice?

It would be easy to write off this book as merely an extended riff on that well-worn phrase "too much of a good thing," but that would be a mistake.

Part of the professor's point in the book is that rules and constraints in society help us make decisions and this is a good thing and should be embraced.

The book's concepts are easily applied to media consumption as well. Because of the growing number of choices we are presented with, consumers of media don't always have the time to look at all the information out there to make the best choice or to even consider all of the options. People expect certain decisions to be made for them.

The term "decision stress" has also been tossed around by marketers over the years and Professor Schwartz's concepts hinge on similar rationale that when faced with too many choices a consumer will often "short-circuit" with too much information overload and tend to decide on what to purchase or read or listen to using the easiest method.

In most cases brand is the balm that soothes decision stress.

And it is for this reason that those of us running media companies in 2007 should consider just how powerful our brand is - or should be.

In our recent studies of media consumption - especially in the Internet radio space - Bridge Ratings has discovered that with tens of thousands of Internet radio options, most average consumers of Internet radio will gravitate to a brand they are familiar with. In many cases they do this to reduce or eliminate the "decision stress".

We have seen new consumers interested in Internet radio go directly to AOL.com for their Internet radio experience without much thought about what else is out there. Why? It's a brand they know and it makes the process of deciding easier.

This process of "going to the brand" is more prevalent in media than in other consumer products and services. Why? Because in most cases, media is simply a utility, something that doesn't hold significant importance to our lives and like the light switch on the wall, we as consumers of media tend to "throw the switch" on whatever media we are consuming without much thought.

Of course, this is a generalized perspective. There are passionate consumers of media that give great thought to what they watch or listen to, but generally, we have found that the average consumer has too many decisions they need to make each day and any time the decision process can be eliminated or reduced, most consumers will take that road.

Certainly, deciding on which radio station to listen to doesn't hold the significance in consumers' lives that selection of which doctor should be seen or which food product will enrich health, and therein lies the most key of all of the factors leading to "decision stress". The hierarchy.

To make the process of decision easier, consumers have an internal mental product ladder upon which they have placed their favorite brands.

They go to a store looking for a product and, in most cases, when faced with too much choice, a consumer makes the easy choice - almost without thought - and goes for the brand they know.

If brand building has not been a part of your business strategy, it is time to invest time, energy and yes, even financial resources, into building, maintaining, supporting and/or strengthening your brand.

Because media consumption isn't getting any easier for the consumer. Whether you run a radio station, and Internet radio business or produce content for other digital and mobile media, your brand will be they key to unlocking consumer use and recall.

The easier you make it for the consumer to make that choice, the more likely they'll choose you.

The Merger of Satellite Radio & What's Wrong with Business in America

Once again the spectre of the two satellite radio companies merging into one business unit that would theoretically enjoy the fruits of 'consolidation' is gaining attention. Both companies are bleeding red ink so why not merge?

Because it is not in the public interest. A new group calling itself the Consumer Coalition for Competition in Satellite Radio was founded by a group of George Washington University law students whose take is "if the only two satellite radio companies are permitted to combine, consumers will be totally at the mercy of a monopoly provider." Yet, once again it doesn't seem to matter where the public interest lies; Wall Street's mouth is beginning to water over the implications of these two behemoths combining to form what they think is a viable business model.

The proposed merger of satellite television's Echo Star Communications and Hughes Electronics was grounded by the FCC on the basis that the companies did not "demonstrate that the merger would serve the public interest." Critics of the proposed deal said the merger would create a satellite television monopoly by combining the nation's number one and two DBS operators. Sound familiar?

The FCC Chairman at the time, Michael Powell stated "If economic history has taught us anything, it is that healthy competitive markets not regulated monopolies, maximize consumer welfare."

Proponents of an XM-Sirius merger claim that a single satellite radio entity would be optimal for both parties. The combined firm would have more pricing power, lower operating expenses and would no longer face the risk of bidding up the cost of exclusive content and distribution agreements.

It seems to this writer that the reasons for the merger don't consider the interest, use or preference of the consumer. The reasons seem to offer an exit strategy for two companies that have mismanaged and miscalculated the sector's potential.

During the holiday season of 2006, Bridge Ratings' satellite radio study revealed that during the course of 2006 despite all of the hype, marketing and special promotions, consumer interest in satellite radio was slipping. Satellite Radio's "Brand stimulation" diminished after Howard Stern's blockbuster 2005 holiday season introduction; consumers were finding it more difficult to find reasons to subscribe. We discovered that satellite radio's product lifectyle became stunted during the critical "Introduction" and "Growth" phases; the sector's growth stage fell victim to consumer apathy which has caused both satellite radio companies to reconsider their marketing plans for 2007 and beyond.

Yet despite the increasing costs of subscriber acquisition, spending more to keep the satellite radio boat afloat is really their only option. The boards of both companies will likely approve multi-million dollar increases in these budgets plunging both further into the net loss abyss creating louder cries from Wall Street for a merger to save the sector. And it goes 'round and round.

But aside from the financial and consumer apathy side of the equation, there is the distressing thought that a potential merger would likely swallow the culture and essence of XM. Its better programming and image I believe is founded in an in-house culture rich in music appreciation and a desire to push the envelope of radio programming. The product is clearly king at XM, spilling out of the creative mind of Senior Programming Officer Lee Abrams. The hallway culture of the Mel Karmazin-run Sirius reeks of corporate oversight. If you ever want to discover for yourself the difference in these two companies, go for a tour.

For whatever reason, somewhere along the way, in many business sectors, the consumer's interest is no longer the focus of business. As consumers we have lost something integral to our enjoyment of products and services in America. There are exceptions (Starbucks), but we have entered an age where investors and Wall Street have overwhelmed the importance of consumer satisfaction (traditional radio), and I wonder if we will ever find our way out of the woods.

Decision Stress - Traditional Radio's Friend

2006 has been the year of extensive reportage about the demise of traditional radio. Many of these stories focus on all the wonderful choices listeners to traditional radio now have and how these choices will whittle away at radio's tune in and time-spent.

Research we have conducted this year with over 12,000 listeners of traditional radio all across the U.S. has uncovered a little secret that I'll let you in on. Radio's got a friend called "decision stress". Not a new term, this marketing term originally coined by Alvin Tofler in the classic book "Future Shock" gets to the heart of choice in the human brain. In his book written in 1970 about life in the future, Tofler examines what he foresaw as the overstimulated individual, the bombardment of the senses, information overload and the decision stress associated with all of this over stimulation.

If traditional radio has done anything right, its brands are comfortable and recognizable.

Related to today's entertainment choices, decision stress plays a major part in how the average consumer selects what they will view, read and listen to. When faced with too much decision, the average person will respond by attempting to postpone decisions or reduce the choices - sometimes logically, other times emotionally. In most cases, most consumers faced with this decision stress, will gravitate to brand strength to aid in easing the decision-making process. It clears the stress of making a decision even though considerable thought may allow them to choose more wisely. Nonetheless, brand strength can be the antidote to decision stress. In study after study this year, over 80% of the time consumers we interviewed about their radio and digital options chose brand over generic.

Why is this important? If traditional radio has done anything right, its brands are comfortable and recognizable by the average consumer and when placed in a position to remember or choose, for example, from among thousands of Internet sources for music and their traditional radio station(s), they choose to recall terrestrial radio brands. As you know, building brand takes years and there are only a handful of products competitive to radio whose brands have broken through the consumer psyche - Apple's iPod is one.

Reading media reports this year, you'd think traditional radio needs all the friends it can get in order to succeed into the future. Perhaps one of radio's most important friends, decision stress, has not been considered by those in and out of the business when considering all of the tools from which radio benefits.

2007: Content is Not King; Distribution is

Content was king for a while, but it's fallen to #2 on the hit parade of what's going to garner listeners, viewers or readers in the foreseeable future. Now distribution is king! It's not that content doesn't count; it's just that in 2006 distribution became more available to the masses thus surpassing content in importance.

We heard good news last week that year-end statistics reflect that traditional radio's on-line listening hit something of a tipping point this year with significant increases in listening to terrestrial radio's on-line streaming - and that's a good start.

But the public has access to all sorts of distribution. It could be the death of old time media if we don't get it right next year. Even my 89 year old mom is aware of new channels of distribution. THIS is the story. And it's magnified 100 fold for the youth generation that's losing interest in traditional radio as one of their distribution choices. Ever try to remember a dream when you wake up? You know how fleeting the memory of it is? That's what is happening to 12-21 year olds. They're slowly forgetting we even exist.

Get your brand, your best content & your most entertaining talent OUT THERE to the masses on as many channels of distribution as you can. It's distribution that will keep you competitive. What good does the best content in the world get you if that content can't be heard by the greatest potential audience. Guess what? Your 100kw transmitter alone can no longer compete! Today, the battleground is access to the public on as many distribution channels as possible. Traditional radio has a unique opportunity to spread its content. Let's not blow this one!

Traditional media and many new forms of digital distribution are not mutually exclusive either. Use them to power each other and expand your reach.

May your 2007 be your most exciting and successful yet.