Surviving In Shallow Waters

Inflating Our Worries & Shifting Into Reverse

As the economy continues to tank, surviving in the Urban radio world has become a daily struggle. Your station probably has many listeners and households where both parents have lost their jobs. The recession has claimed lots of victims in the last two years. And it's not just Urban radio; other media forms are suffering too. Several national newspaper chains have filed for bankruptcy. Despite this, most analysts predict that radio in general -- and Urban radio in particular -- will survive.

After much restructuring and cost-cutting, our stations are leaner than ever and hopefully, well-positioned for a rebound. The problem is we just don't know when. The question isn't just will Urban radio survive this year or the next, but whether terrestrial radio in general is on an irreversible path to going out of business. Most group-owned Urban stations are languishing in a mixed bag of attempted changes in content, focus and format.

This at a time when more and more air time is occupied by syndicated programming and voicetracking. It's become obvious to our audiences that local programming forces have all but disappeared. No matter how you feel or are affected by the changes dictated by the current economy, the prospect of losing the localism and the link to our communities is daunting. Who is gong to keep government officials accountable? Who is going to cover local government meetings, report on the school board, and dig up wasteful spending at city hall? Where will the region get its local news? At one time our stations were daily sources of communications. They were an integral part of democracy and the voice of the community. But it appears those days may be gone forever. The loss may be greater than just microphones, transmitters and warm bodies.

Is Marketing The Answer?

What is marketing's role in the new economic environment. Or maybe the question is, isn't marketing one of the first things to go in a tough economic environment? For those who believe they can save their way to success and survival, the answer is "yes." The reality is: Urban stations experience attrition when they stop marketing, it can be devastating to the brand. A 20% AQH loss is far more expensive than the minimal savings recognized by cutting the marketing. The best brands continue. How can we stop advertising when that's exactly what we tell our clients not to do?

While many stations cut back and witnessed listener erosion, some of the top performing stations/clusters have continued to invest in their brand. Now the question becomes: How can stations spend marketing dollars more effectively?"

Today Urban stations should be communicating more frequently with a smaller group of listeners -- those who are willing to be engaged -- by tailoring the message to the real interests of their listeners. The best programs support reasons to increase usage to the stations. Don't waste resources on people who have no chance to move the ratings needle.

Only Arbitron meter wearers or diary keepers move the ratings needle. By utilizing the tools available through the ratings services, we can identify the households that will deliver the greatest return on investment. If a fraction of the market participates in the ratings process, why use a mass media like television or billboards? Instead, focus the target to maximize the results.

What are the best case studies of when direct marketing has been effective? For one thing, we can build a database for a client that contains tens of thousands of households. Each member is categorized by P1-P5 status, demo, daypart usage, time with radio, etc. Over the period of 10 weeks, 25-54 P1s to the primary competitor who use radio more than an hour a day could receive four personal letters from our client's morning show (providing it's a local morning show). With a cash contest outlined in each letter, we could grab quite a few quarter-hours of listening throughout the rating period with a minimal investment.

Additionally, stations that build and communicate with their database perform better and are able to do so over the long haul. Survey-friendly listeners are "information seekers." Focus on survey-friendly households and give them something with which they can spend time, satisfying their interest for information. Reinforce the reasons your primary users listen to you.

What's different now than when you first started direct marketing for radio stations?

For one thing, gone are the days of "spiking" the ratings. Now, we should be working on plans to maximize the impact of the marketing dollars by improving the affinity for a station on behalf of the compatible audience and therefore growing real usage. Especially with PPM, the process is ongoing, so we need to develop programs for all stations within the cluster (not just one), and impact every month of the year.

Stations are now looking for their marketing to do more than just reach listeners. They are focused on getting a return on their investment ... and for the investment to last longer than a "book." Ongoing marketing provides the brand substance needed to benefit from changes in the landscape and continually reinforce values.

Despite the proclamation of bloggers and social media proponents, the Internet isn't the answer ... yet. Although they have ushered in a new era of engagement and drastically increased the availability and accessibility of information, which means more people consume information than ever before, there is nothing to take the place of a well-programmed local Urban station.

Urban radio is especially hard hit and keeps getting chopped by new ratings challenges, dwindling advertising and an ever-enveloping Internet. This is a perfect decompression time to look back and then look ahead. We need to see what we've accomplished and then set new goals. One of the things we've observed this year is that the so-called cookie-cutter, "off-the-rack" syndicated and voicetracked formats are not driving and keeping new listeners. They're saving their companies money, but at what expense? Maybe what the format really needs is a different spin.

Why would we need a different spin? For one thing, so far 2009 has been a wild year for our industries. Urban radio is facing new format competitors with the Internet and other media options, both of which threaten to nibble away at our time-spent-listening (TSL) and cume. The obvious facts are that iPods continue to gain larger fan bases with iTunes selling millions of dollars worth of songs every week. Then there's the Internet and podcasting, along with satellite radio. Many of these audio forms can be downloaded right onto your cell phone and even into your car now.

Urban radio can expect to be forced to compete with more new forms of technology. Wi-Fi Max is here and with it will come the possibility of easily accessible broadband Internet connectivity in your ride and wireless Internet all over. In some markets, it will even be free.

Speaking of free, we haven't even talked about high-definition radio. I personally have experienced it under ideal circumstances and I can tell you that as soon as they figure out how to improve the antenna systems and bring the costs down, that's going to put a different spin on music radio. These HD side channels will offer a different format than the main channel and they're going to increase the available choices in an already crowded radio world.

PPM Challenges & Hispanic Listeners

Another new spin that is going to add to the confusion is the way radio is now measured. In many markets the future is, or will be, electronic measurement, Arbitron's PPM. electronic measurement is changing the way we think and program. For the first time, minute-by-minute instant audience ratings results are available. Children from six to 12 are included in the measurement process and non-commercial radio stations are going to be counted. All of this is going to cost radio and the agencies that serve it substantially more.

Something else Urban stations must take into consideration and target is the Hispanic "hole" which exists and is growing in many markets. We've been saying for some time now that future research for Urban stations needs to be adjusted to include Hispanic listeners who love the music and artists we play. These Hispanics have to be included in the auditorium music tests (AMTs) and perceptuals.

Why, you may ask? The answer is that if you're lucky you will get as much audience as you go after. If you narrow your target, you lessen your chances of victory. If you target a 2.5 share composed almost entirely of African-American listeners, that's what you may get. In the future, smart programmers will put a new spin on their research and look for crossover potential between demos and music preference groups. Leave no potential listener type un-served, under-served or hanging for more than one song. Smart Urban program strategists will make sure their stations always come back through the "center line." In doing that they appeal to the largest group of target listeners.

These past few years have been laced with change and demographic density. A population that is rapidly adjusting both its demographic status and its colors must be recognized. Urban radio's new target audience is not just black anymore. It's becoming more brown and yellow. In some markets, the catch phrase is "mega." Regardless of what it's called, it's what it means to the listener that counts.

Hispanic's loyal listeners will now get the best, researched classic R&B and funk enhanced with the right current songs, which includes hip-hop. Mega's new core audience is female-based and targets a non-Arbitron defined category that is 25-49. They are, for the most part, second and third-generation Hispanics. And believe it or not, they're into artists like Mario, Maxwell, Drake, Ginuine, Pleasure P, Whitney Houston, Mariah Carey and Beyonce.

Hispanic-targeted radio is making huge gains in many markets, and it's not just the traditional markets such as New York, Miami, Los Angeles and Houston that have experienced this burgeoning swell lately. The Hispanic population in The Windy City, for example, has grown to 17.4% of the market's 7.7 million total. Chicago's African-American population is just 17.6 percent.

Generation Jones' Moving Target

Finally, we want to examine what demographers often refer to as the new "Generation Jones." From the time someone graduates from high school at around 18, until they turn 30, their lives typically transform from dependents living with their parents to workers supporting themselves to married couples and inevitably, to parenthood. They've become a moving target, one that is very hard -- but not impossible -- to hit. To consistently hit this moving musical target, however, Urban radio must keep up so that as it changes, so does our music and its presentation.

So far in 2009, we have witnessed lightning constantly striking while the game and the rules continue to shift. It's all part of today's hyper-competitive business environment. To survive in shallow waters we have to keep the music playing, but now it has to have a different spin. The spin will always best be determined by the market composition and its colors.

Going forward, we're going to be forced to look at these colors a little differently and go a little deeper than just the surface colors. Winning in today's economy is going to require a not only front-spin, but also back-spin. It's also going to require a lot of thought. Action without thought is like shooting without aiming. This time, if you fail to aim, shoot and miss, you may not get another shot at the moving target.

Word.