Colleen B. Brown

Radio's eternal "live and local" mantra may ring a bit hollow to those brought up in an era consolidation, syndicated and nationalized personalities and the development of Net strategies where there are no market boundaries. Not to Fisher Communications Pres./CEO Colleen Brown. Under her leadership, Fisher has averted the heavy leverage trap that has befallen other radio groups, prospered through the difficult transition to PPM, and has invested in time and energy to enhancing its presence within its local communities. Here how Fisher's "hyper-local" successes have paid off for the company nationwide.

Are you bullish on Fisher's prospects for 2010?

I believe the worst of the economic recession is behind us and that the industry, including radio, is poised for growth. One of the reasons for my optimistic outlook is the number of highly contested elections this year. I don't believe you can get out of the way of political spending, which will be significant as we head towards November's general election. For example, in Washington State, we should benefit from increased political spending given the strong market presence we have through our KOMO-TV and radio properties, as well as KVI, our conservative Talk station.

Looking beyond political spot revenue, what's the key to future growth in 2011 and beyond?

In general, I see automotive coming back strong. There's also resurgence in retail that's just getting its legs. We're not back to the pre-recession spending levels, but it's very helpful to have it strengthened going into 2011, when we can really judge the comparables.

With talk of CBS Radio and possibly others selling off properties, is this a good time for Fisher to expand by acquisition?

We are always looking for ways to deliver increased value to our customers and shareholders, but as a matter of policy, we do not comment on acquisition-related questions.

Is there a danger that suitors will make the same mistakes in leveraging when buying new properties?

You need to have a full understanding of what buying entails and the cyclical nature of our business. That may not have been fully appreciated in the past by certain buyers, but those of us who have been in the business for a long time know how cyclical radio can be. It's a wonderful cash flow business, but it has its ups and downs -- and it's very tied to retail sales and the GDP.

Many of us started getting concerned when we saw buyers, who were relatively new to the industry, try to leverage up to 60% of the company. That kind of leveraging is too risky ... and we saw what happened when the economy crashed.

The lessons learned should be: getting value for equity, buying at the right price and being much more realistic about our assets. The last thing to consider is that since a lot of assets have changed hands a number times, many of the typical synergies that you would get through an acquisition already have been captured. As a result, it may become more difficult to cut anymore without losing customers and revenue.

How has the PPM changed the competitive environment in Seattle, and how have the Fisher stations fared?

Any new change in technology takes a while to get comfortable with, to get the patterns down and to not overreact, particularly with something as immediate as the PPM. I will say that as someone who was used to one system, then moved to another, ultimately if you're looking for a more accurate depiction of what's really happening in your market, PPM is a definite improvement. While it's true that the diary uses a much bigger sample, it's based on recall. PPM offers more accuracy.

The bottom line is getting results for advertisers. If getting a better handle on what people are listening to helps move their product, PPM will attract advertisers and keep them coming back. As difficult as the growing pains of change can be, mastering the PPM will enhance our ability to help our business partners.

How has your relationship with your clients changed under the PPM? Are your sales staffers doing certain things different to deal with the PPM data and methodology?

Through PPM, we are able to provide a more detailed analysis of listener preferences and trends. We found that our particular stations are listened to much more exclusively than others; our three Seattle stations are ranked in the top five for listening exclusivity. This information is helpful as we meet with clients and potential clients to explain the value they get from advertising on our stations. If they are targeting a particular audience, they can use the PPM data to determine which stations will help them reach their desired demographic. We didn't have that kind of info before the PPM.

On the sales end, the challenge is to get an advertising price that is appropriate for this new information. As you can expect, this new level of information is being challenged by advertisers because they've been paying a certain amount for their advertising and think nothing has changed - when in actuality we doubled our rankings, which provides them more value for their advertising dollar. In the short-term, it's been hard for us to convert the new PPM measurements into higher ad pricing. Advertisers need to see the tangible benefits from PPM before we can ask them to pay more for their spots. However, we believe that PPM is a more accurate measurement tool, which will lead to better results for our customers and our stations in the long-term.

The lion's share of complaints coming from radio seems to be just the opposite - that because PPM data uniformly lowers AQH, advertisers want to pay less ... a la the "70 PPM = 100 diary" concept.

There's definitely some of that. It really comes back to relativity between stations, what advertisers want to buy and what they should get for the money. It's still the same pot of money that's being reshuffled between the players. It should depend on rankings.

Either way, it's hard to do when you have advertisers paying one amount, then you ask them to pay 30% more overnight based on a new methodology. It's equally hard for stations that have fallen in ranks to deal with advertisers who are asking for 30% less.

Our sales teams have had a number of strategic discussions about the value of our product and how we realize that. We very much respect our advertisers and want to help them use the PPM data to better reach their targeted audiences.

While your Seattle stations are now under the PPM, the others are still and will continue to be under the diary. Do you see your stations creating two different kinds of radio programming, tailored to their respective monitoring system, to succeed?

I don't think its different kinds of radio as much as different styles. With the diary method, you do a lot more call letter ID, focus more on being consistent and memorable with things that make your brand easy for listeners to write down. In a way, it's more strategic and more thoughtful to leave that kind of impression over the long haul.

PPM is about striving for excellence every minute of every day. It's less about call letters and more about trying to figure out how to keep listening levels high at all times. However, that's not to say one type of monitored station doesn't take lessons from the other.

Are you concerned about operators using PPM as an excuse to divest themselves of high-priced talent for more music/low talk presentations?

If more stations are doing that, it's good for us, because we're not doing it. I believe you're always going to have all-music stations; they'll have a place in the pecking order.

A lot of radio groups are using more syndication and/or in-house voicetracking as a way to save staff expenses. What's your view of "importing" talent in terms of that betraying the "live and local" mantra?

We're a big proponent of being as local as possible; however, we balance our local programming with national syndication -- especially on the conservative Talk side. It's similar to being a local TV affiliate; if you create a balance of local and national programming, it makes you a stronger market competitor.

However, as you delve into politics and local public policy issues, you need a medium that enables the community to debate and discuss the issues in a dynamic way. Fisher strongly believes in providing that platform - that's part of who we are; it's in our DNA.

I also believe more holistically about radio and our product - it's first and foremost about the content. Our strategy is to focus our radio content to each community. What we bring to the table is quite narrow, although we pull content from national, state and local sources.

Here's an example of how we are executing our strategy: We've put all our content personnel -- whether they work in TV, radio, the Internet or mobile -- together on one floor. All of our TV reporters do on-air radio reports. Our news efforts are integrated. Ultimately, the payoff for the community is that we cover every nook and cranny of it. We believe that our super-service mentality gives us a competitive edge.

Content always has - and always will - define the medium.

There seems to be a debate between those who believe in pursuing an aggressive web strategy for radio, and others (mainly radio group heads) who believe the significant investment isn't warranted because the ROI isn't there. What's your take?

We are profitable with our web strategy and are pleased with the ROI we are earning on our digital investments. I believe our success is based on the way Fisher approaches content and how distribution is ancillary from that.

You've spoken publicly about Fisher's hyperlocal website strategy. How does that play out?

On a daily basis, our stations receive thousands of local story ideas. However, when we surveyed our assignment desks, we discovered that we were only using about 20% of the content that was coming in. The other 80% was too narrow in scope to find its way on-air - that's a lot of waste.

We spent three years trying to figure out what to do with everything that was coming into our newsrooms. We wanted to find a way to use all this valuable information, so we began tagging everything that came into the station. For example, in the Seattle market, we started sorting all the information by location, which enabled us to immediately post it to one of our 54 neighborhood sites. Through our hyperlocal efforts, we have created a vibrant, 24/7 news environment.

The second part of the equation is how tap into the broader advertising base. When you have 60,000 businesses in Seattle and we only get a couple hundred to advertise on-air, we're obviously not reaching the full potential of the advertising marketplace. So, how do you do that? By tapping into all levels of the ad market, we can sell the $60,000 spot on our TV stations all the way through the $35 per month ad on our neighborhood sites. We are aggressively fighting for every advertising dollar - there are a lot of nickels out there and we believe that if we roll up enough of them, it starts to make a real difference.

Our enhanced advertising capabilities also improved our content gathering. When we're going into the neighborhoods, we're also getting great leads and feedback. That was the big "a-ha" moment for us; we created an advertising environment that helped us expand our newsrooms' reach.

Have other stations in your markets tried to mimic your approach?

Several of our competitors have launched similar efforts, which is leading to a more vibrant news environment and benefitting the communities we serve. In the long term, I believe the key to success is developing a sustainable program that builds off of your brand identity. What differentiates our program from our competitors is our innovative content development strategy, the ability to rapidly scale our technology platform, and our cost-effective, targeted sales solutions.

We're now coming up with ideas and solutions to address music-driven stations. We're in the process of finding a neighborhood approach to broadcasting. Even though radio covers a region, it's very common to have a "small town" mentality in programming

What's your opinion of the statement by NPR's Vivian Schuller that radio will inevitably move from transmitters and towers to the Internet ...and where would you want Fisher to be in such a transition?

Our focus has been more on the content than the distribution because if you have the quality content, the distribution will follow. At a time when technological advancements are redefining the industry, I believe trying to predict distribution methods limits us.

Transmitter broadcasting is open-ended; it's available to anyone with a radio. On the Internet, you're waiting for the audience to find you. In that light, the tower is infinitely more effective to reach and connect people than the Internet. That being said, the Internet is a unique distribution model; you almost have to conduct a different business on the Internet.

In the end, I wouldn't handicap myself or our company by predicting how technology will evolve. I believe everyone should have access to all distribution methods - and I believe in all of them very strongly.