May 24, 2011
In the16 years he's been with Coleman Insights, as well as being President/COO for the past three years, Warren Kurtzman has seen the radio industry evolve dramatically, through the advent of the PPM and the growth of digital and multiple platforms. Yet in his eyes, the key to successful radio remains largely the same - and Kurtzman and everyone at Coleman Insights have been advising their clients on ways to achieve success no matter the economic climate. Here's how he sees radio prospering while overcoming its current challenges.
In the 16 years you have been at Coleman Insights, how has the profession of research and consulting changed in terms of pertinent issues and overall strategy?
There are some things that have changed significantly ... and some things that haven't changed at all. One thing that has stayed very consistent is the philosophy we follow about building successful radio stations. Even as we've seen big changes in technology, radio group ownership, the competitive media landscape and listeners' tastes, the principles have remained largely the same.
What has changed? New technologies have certainly allowed us to do many different things in terms of our ability to generate and analyze data. The PPM system has definitely impacted the way we interpret the research we collect. Globalization is another big change. We have been a multinational research company for almost 20 years, but the work we do outside of the U.S. has grown almost exponentially.
Are strategic programming philosophies different internationally than in the U.S.?
Obviously, we observe significant differences in music tastes and other cultural differences from one country to another. However, in terms of the programming, positioning, branding and marketing philosophies that attract sizable audiences, what we use in the U.S. is pretty universal and applies worldwide. It's like what big, multinational companies like Procter & Gamble have learned; there are certain principles of product positioning and marketing that apply everywhere. All you need is local market measurement of tastes and perceptions to apply those philosophies in each country and market.
How has PPM changed your consulting strategies?
It's been a learning experience for everyone involved. A big change happens when a market adopts PPM measurement, but it's not necessarily true you should adopt dramatically different strategies to succeed. One thing PPM has reinforced for us is that no matter what measurement system is in place, the strength of a station's brand and the quality of the content it delivers "in the moment" are the biggest drivers of its ratings performance.
Under the diary system, the strength of the brand is the bigger driver of how a station performs in the ratings. What PPM has changed is that not only do you still have to have a strong brand, but now there's greater pressure on executing high-quality content on a moment-by-moment basis. The PPM is a much more sensitive tool on how good the product experience is. When PPM first was introduced, many overreacted and became overly focused on the "in the moment" content delivery experience. We now know that there's a balancing act between branding and "in the moment" execution that every stay needs to perform.
So how does this impact the way programmers oversee their stations? A Coleman study inferred that some programmers have been overreacting to the weekly numbers. How does one prevent such overreaction?
I certainly think programmers who aren't strategic and can't see the big picture in the long term will -- at some time -- fail their own station or the company they work for. There is a tendency to play it safe and not do anything to undermine a station's "in the moment" performance, but programmers who are really strategic should have the luxury to think long term. Sometimes you have to do things that may undercut your performance in the short term, but improve your station's performance in the long term.
How do you counsel programmers to adopt that viewpoint when they may feel under the gun to produce optimum numbers today? Is there a certain length of time you believe stations should wait to see long term improvement?
There's no set answer for that; it depends on what the station's goal is ... and on the competitive landscape. Sometimes we do research and start seeing positive results in three to five months. Sometimes -- especially if you're talking about a start-up or a format flip -- there will be goals that can't be reached for two to three years.
What really matters is that there has to be a buy-in to the plan from everybody who has a stake in that process. When a radio station is solely being managed for short-term success, it's quite hard to do things that way. We generally don't have productive relationships with radio stations that are all about trying to do really well in the next monthly or the next book. We have far more impact and have most successful relationships with programmers, general managers and groups who understand that some of these things take time.
One common perception about the PPM is that some formats are far better suited for that ratings measurement, while other formats have little or no chance to succeed. Do you agree?
It would be fair to say that the belief you mention has been overstated a bit. The one thing we do know is it's very difficult for a format to enjoy big PPM success if your station doesn't exceed a minimum level of cume appeal in the marketplace. That's why some formats -- especially the niche formats -- have struggled a bit in PPM, because they have yet to generate a minimum amount of cume usage. In every PPM market, there seems to be a breaking point you need to get past in order to have reasonable expectations for success.
But can one program a Smooth Jazz station, for instance, to generate that minimum amount of cume?
Yes. While many Smooth Jazz stations have gone away, there are still stations such as KIFM/San Diego, The Wave/L.A. and WLOQ/Orlando that continue to survive and in some cases, thrive under PPM. I hate blanket rules that say this format works and that format doesn't. Almost any format can work under PPM measurement if it can get past the minimum cume threshold I mentioned earlier. It's all a matter of creating a sizable appetite for that format in each specific market, which is a function of the inherent demand for the format and the station's ability to market itself externally.
Do you feel Coleman Insights -- and radio in general -- fully "gets" the potential of social media to radio's future growth?
We're probably in the top of second inning in terms of understanding the best ways to use social media to enhance listener engagement. Anybody who claims, "We got this social media thing figured out and we know how to use it" ... is lying. It's still very early. Social media is going to evolve as well; currently there are things it can do for us and things it can't do ... but that is going to change.
I am also comfortable in stating that the overwhelming majority of people in radio don't have a good handle yet on the best way to utilize social media. Right now, we think it's a way to give listeners greater access to your brand and engage them in a deeper way than you can by simply having them listen to you ... but we're still learning. There hasn't been a great deal of research done by radio in this area, especially in comparison to some of the other media industry segments in which our company works. We anticipate, however, doing a lot more of it for radio. That's one of the things that spurred the launch of our new knowDigital division, which Sam Milkman runs for us out of our Philadelphia office.
Isn't there a dichotomy between radio that programs under a passive listening measurement system in PPM and trying to develop a web strategy that relies on active engagement?
I don't think so. Just because the PPM is a passive system doesn't mean it only measures passive listeners. In fact, our landmark "Real PPM Panelists Tell All" study three years ago made it very clear that the overwhelming majority of most stations' PPM ratings were generated from listeners who used their stations intentionally. PPM captures of lot of what we call incidental and invisible listening, but intentional listening is what drives the bus. Web and social media strategies the enhance radio station brands -- and increased listener engagement will generate more intentional listening.
More than a few heritage, big-name air personalities have felt the "wrath" of PPM and have since found themselves out of work. Are they, like low-cume niche formats, an inevitable casualty of PPM?
Here's the real problem: Too many air personalities are being evaluated strictly on their PPM-based ratings performances. It's wrongly assumed that for personalities to be truly valuable, their ratings must be dramatically higher than their stations' ratings in other dayparts.
We regularly see in our research personalities who may not outperform the rest of their stations from a ratings standpoint, but who are huge parts of their stations' brands. These personalities are often one of the critical elements in bringing listeners to their stations in the first place. I'm a big believer in the role of personality on music stations, and if more stations evaluated their personalities on a lot more than their daypart's ratings performance, these personalities would not be casualties of the PPM system. If radio as an industry only evaluates its personalities based on PPM ratings, we'll end up offering a product that is indistinguishable from what consumers can get from other sources.
Where does Coleman Insights step in on the air personality issue -- with the station PD, the group PD or the air personality?
The answer is all three. Many times, we work through station or group programmers with their personalities. Then there are personalities who essentially own their own shows and syndicate them; many of those personalities contract for our services directly. For example, a number of major radio personalities use our mediaEKG service, through which we test different types of content with panels of listeners online.
You must turn over your content research very quickly to test topical content.
It's less about the topic and more about how it's executed. Research rarely tells radio personalities what subjects to cover. It's not whether they should be talking about Charlie Sheen; it's more about how they should tackle the Charlie Sheen story, which will vary from personality to personality, based on the tastes of their audiences and on what listeners expect from them. Two shows can take very different approaches to the same topic.
That's really what you learn from research. It's not about what you should talk about, or what categories or topics in general consumers want to hear, because you can't control the specific stories available each day. How you handle those stories is where you really learn how to build on your success.
Bottom line: Can radio grow significantly in revenue or -- as a mature medium -- can it essentially only improve its financial stature marginally?
Radio reaches well over 90% of consumers each week, so on the mature medium question, it's pretty clear that we're there. It's not likely we're going to get to 100% reach. It is what it is. But what we can't grow in raw listener counts, we can make up for by increasing listener engagement and therefore delivering even better results for advertisers.
I remain very optimistic, especially as our definition of radio continues to evolve. It's no longer just about sending a signal from a tower to a local market. You now can have distribution via IP protocols and other new technologies. As a result, I think radio -- in one form or another -- will continue to reach a very large portion of the public and generate revenue by delivering advertising results. The key is whether we can take advantage of new technologies and new ways of engaging our audience even more effectively in the future.