October 4, 2016
As a media strategist who has worked with the likes of iHeartMedia, CBS Radio, Pandora and Apple, Mark Ramsey knows the importance of innovation and staying ahead of the curve, as well as the financial restraints the radio industry has that complicates that challenge. Here, Raney offers his insight into conquering challenges such as better ratings research, creating compelling content, optimizing the tools of new technology and breaking down silos through his Hivio conference.
By the time you headed up Mercury Research in 2003, could you see where radio was going?
The temptations is to say, "Hindsight is 20/20," because nobody can necessarily see where it's all going right now, let alone then. We're making it up as we go. Time will tell whether making it up is the best way to maximize shareholder value for broadcasting corporations -- and consumer value for real live people. But we're absolutely making it up. Ten years ago, there was no iPhone; 15 years ago there was no YouTube or Facebook. Five years ago, there was no Snapchat. So how can we say with any certainty of what will happen next?
What did you hope to accomplish with your own company that you weren't able to do at Mercury?
Control. You're beholden only to yourself ... you're only responsible to yourself and your clients. You can focus on doing good work and doing what's best for all.
Let's get to the issue of PPM and multiple monitors in a household. Is the simple solution a limit on PPMs per household, or just have a larger sample to offset multiple-PPM households?
You can have the same sample size and just spread out the PPMs to more households; that would be great. Ideally a larger sample is required, but I don't know if anybody else would agree to pay for that unless they work at Nielsen. The fact of the matter is that this is biggest sample we will be provided at this price -- and that is all. It doesn't mean it's the best sample or right sample ... and it certainly doesn't mean the most representative sample
So it's strictly a money issue? No one willing to pay more for a larger sample?
For smart rational business people, this is the highest price you're likely to pay for answers which are "good enough." Under those economics, of course, you could have samples as large as we have for the diaries - if only you had diaries instead of meters in PPM markets.
You work with major radio groups -why do you think they haven't been more outspoken in improving the PPM?
Individually, they have no leverage. Behind the scenes, radio is pretty distributed where even large groups have relatively small pieces of the pie -- except for maybe the largest one. So there's no centralized leverage and you're dealing with one monopoly with all the leverage. Many in the industry who warned about it for years have now seen it come to pass. We have made a deal with the devil ... and now it's a deal we have to live by.
So there's nothing radio groups can do - even if they don't like the way things are?
They can organize and lobby for change. They can exert pressure when they renegotiate - or terminate - contracts with Nielsen. They can use alternative measurement technologies. They can do all of that, but it would be very costly for them. The beauty of being a monopolist is that what you do has become accepted currency - and once it becomes accepted currency, it's very hard for others to cannibalize you. The point at which radio did have some leverage was when PPM was first being developed and introduced. Then there were no rules or policies.
But if you look abroad at other countries, you can see different ratings models. In some countries, their diaries are working just fine and that methodology is perfectly accepted by the ad community. In countries like Canada, its equivalent of Nielsen is not a private corporation but it's viewed more of a public good.
A meter system can be pretty effective for large groups with many radio stations across the country, but if you're a smaller group with fewer stations or concerned with only your market, how many meters determine your fate? For iHeart stations, thousands of meters determine their collective fate. If it's just a radio station in Tulsa, how many meters determine its fate? Just a handful. So the incentive for an alternative is greater when you're more dependent on a smaller number of meters. Those same stations also have reduced leverage, which increases the likelihood of being victimized by Nielsen.
In a Jacobs Media blog, Fred Jacobs wrote that the PPM matter is not as much a ratings problem as it is a sales problem. Do you concur?
Although I haven't read his column, it certainly is a sales challenge. But that's less about PPM and more about selling reach in a world that can reproduce reach in other ways; a world where impact matters more than it used to.
Broadcasters want to give clients what they want, but clients want a bigger and better audience than the days when they could only choose between outdoor, radio, TV and print. Now you have a million digital flavors, starting with Facebook, which can target people with precision. Internet radio and Pandora possess targeting capabilities heretofore unknown to radio. Even though radio now has its own digital platforms with websites and podcasts, some clients are starting to realize that with their own e-mail database, they already have their own media brand and maybe they don't need larger media brands such as radio or TV. Depending on the size of its audience, they can exert a whole lot of leverage on people who are already their customers. They become their own loudspeakers.
More recently you posted something on connected cars, where you asserted that it's "not the toys, but the content. Focus on being worth listening to and you will drive consumer demand for radio content, regardless of platform, forever." And exactly what kind of content would that be, if radio is not offering it now?
I don't know if it's the kind of content, per se, as much as it is a larger investment in that content. I did a Facebook post today on a morning show talent in Australia, Hamish and Andy, who did a video where they found the most lifelike animatronic dinosaur in the world and put it in a parking garage. They lured people in there to get scared by the dinosaur - and it was utterly hilarious. I thought, "Wow ... when was the last time that came out of an American morning show?" That's the kind of content I'm talking about -- how can you not listen to show that creates things like that? It was a video that had inspiration, execution and production value. Why don't we do that? Why is that such a unique thing? Great creative requires effort - thought, skill and more than anything, it requires caring and the desire to create content that encourages people to come back to it again -- not because it's built into a car, or is playing the latest hits, but because what's between the songs that's so utterly damn compelling.
Even when such content requires an investment of time, money and thought, as you mentioned, it doesn't always work. Do you expect radio management to allow its talent to fail when it doesn't work?
Look at the world of TV and film ... and how much investment Netflix is making in original content. Only a fraction of their content hits big; a larger fraction basically vanishes. Throughout history, hits have financed the system -- including the losses - but the hits only come from taking chances. Now we have Star Wars ... a universe of films, stories, sequels, remakes and spinoffs ... but once upon a time, it was just a space western by the guy whose biggest success to that date was American Graffiti.
What's your take on NextRadio?
I have great respect for the guys at Emmis and for the vision behind NextRadio, but I'm not seeing any traction among real consumers.. NextRadio is a radio-centric solution to a radio-centric problem of how to make radio more interactive using FM. But consumers don't care about the radio industry's problems; they care only about their own. If you go to consumers and ask them if they have a problem with radio and if they want it to be more interactive on FM, they will be confused. They like being interactive with a lot of things. They already have a lot of ways to listen to radio. If they want to interact with it, they can go to a mobile app and interact, they can tweet, they can hashtag on Facebook, they can call, they can e-mail, they can text. Further, I don't see evidence that consumers are going out of their way to buy smartphones with enabled FM chips, which explains why Apple hasn't been interested in providing it.
Consumer demand for a chip-enabled smartphone is little more than a delicious radio industry fantasy.
Should radio make exclusive content for its online or NextRadio broadcasts?
NextRadio doesn't talk about original content at all; they just envision new ways to deliver coupons to the consumer and other forms of interaction. What does that have to do with content? The universe has to be larger than what you hear over the air; that's what the best podcasting is.
Do you believe it behooves radio to put a lot more effort into podcasting?
That potential exists, because radio should realize it is in the audio business, not just the radio business. They really should wake up to that fact. They also should abandon their old business models for new ones that they're only now developing for podcasting. It may be a matter of timing now; it's time to do experiments and build fans via the podcast platform but again, with what content? When stations are stripped of talent, where everything between the songs is only seven seconds long, what the heck do you have to podcast? Repurposing over-the-air shows online only gets you so far. Too many broadcasters think of podcasting as simply "efficiently repurposing what's on the air." It's not. It's more than that. Ask your listeners.
Let's talk about the Hivio conference. Why did you start it?
I started it because I felt there was no place for people across all across the audio spectrum to gather together. There are those who go to a Sports radio conference; there are News radio conferences and Country radio conferences that go deep into their own niches. I wanted a place where all people could come together -- not like another NAB, which is only for broadcasters, or RAIN, which is a great conference primarily for online radio people and where broadcasters may not feel welcome. Other podcasters seem more at home at Podcast Movement than they do at NAB. All these vertical silos don't relate at all to the experience of listening to audio as a consumers, who listen across a variety of platforms and choose the platform they want at that particular time. I wanted something that brought together people from all parts of the audio spectrum to talk about talent, social media, digital and terrestrial radio, podcasting, and everything in between -- under the assumption that all of these categories are connected by audio. If you don't see the market that way, you won't understand why you're losing listeners.
How has Hivio evolved over time?
Anytime you promote random collisions between people who wouldn't normally be in the same room together, you create a greater good. Every single year, people have met others they wouldn't normally meet and traded connections with them. Hivio has been terrific because of that; it allows people to see over the horizon in a way that they don't see in their own category niche or format silo.
There are many new things you discover every year at Hivio. A few years ago, we had a YouTube star onstage with someone who researched where YouTube stars came from, and they discovered that many of those stars were living in the markets of broadcasters who weren't even aware of them. In every market, you had YouTube stars lurking- and radio stations didn't either know them or ignored them.
Carbon paper, typewriters, 8-track tapes, Western Union telegrams ... what can radio do to ensure it doesn't become just another signpost of history?
What do all those have in common? Everything you mentioned is a distribution channel that has been supplanted by something that disseminates content more effectively. It's brings back the old story of the failure of railroads, which only considered themselves to be in the railroad business and not the transportation business. If you continue to believe you're in the radio business and not the audio entertainment and information business, you'll see the world differently than how your consumer sees it ... and by the way, how your clients see it, too.
Where do you see your business and career evolving with the industry?
I still do quite a bit of strategic work with broadcasters and I do consulting work in the audio space for brands. I hope to be making an announcement soon about a content development initiative that I can't talk about yet. I hope to announce something soon that will have people scratching their heads ... "You're doing what?"
You have to realize that this is the greatest time to be in audio. The greatest time ever, yet broadcasters have spent their time wringing hands instead of investing energy exploiting the amazing opportunities at hand. It's not only going to take innovation, but a concerted effort to develop new business models because the old ones aren't suited to the times that are coming.