SPRING 1997
First, it means that research is more important than ever. You still have a lot of competition -- not only competing radio stations, but also broadcast and cable TV, the Internet, recorded music and any source of entertainment and information that vies for your target listeners' time. And they can shut the radio off entirely if it fails to satisfy their needs.
Your stations also compete with each other, even if they're in different formats. And often, they're not in altogether different formats! Many companies have paired a Hot A/C with an A/C, an Adult Urban with an Urban, a Hot Country with a Country station (and so on) for defensive reasons -- to dominate and protect their "format franchise."
But the goal of consolidation, in general, is to combine multiple stations in a market to deliver the biggest, best-possible share as efficiently as possible...in effect, turning radio into a "mass medium" like TV. That means minimizing duplication between stations and maximizing their combined overall share.
Research can help you achieve that goal. And just as multiopolies yield efficiencies in operations, they make research more cost-efficient...
Can one research project serve more than one station? Our answer is a most definite YES. And I'll take it further...not only can you use a single strategic project to position more than one station in a market, but you should do so!
A single, broad-spectrum study is the best way to devise an overall strategy that (1) minimizes duplication between stations and (2) maximizes their combined overall share, because it gives you the "Big Picture."
We have been successfully doing this for years for AM/FM combos. Consolidation merely takes the process a step further...
One tool we use to achieve these goals is CLUSTER ANALYSIS-- which divides the audience into "segments" of listeners who share similar programming preferences. Cluster Analysis is a powerful strategic tool because the groups that emerge are more meaningful than demographic groups. (For example, a "25-34 woman" could prefer Alternative, Country, Lite A/C, Classic Hits, Sports Talk or anything else!)
A Case Study: Our client owns three FMs in Anytown, U.S.A. Its long-term "cash cow" -- W$$$ -- is a mainstream Country station that battles the local AOR for #1. Cluster Analysis of the market's 18-54's shows that it is #1 with three segments -- the "Country Hardcores," the "New Countries" (even though they find it too old and cluttered) and the "Gold 'N' Country Fans" -- listeners who love country music and oldies.
The second FM -- W+++ -- is a "second banana" Country station the group has just acquired. For years, it has been going after our W$$$ with a "me too" strategy.
We'll keep it Country, but reposition it to super-serve the "New Countries" with a music-intensive Hot Country approach. That way, W$$$ can own the "Country Hardcores." And as long as W+++ is around, we're unlikely to get new Country competition targeting a highly- vulnerable segment.
Finally, W??? needs a new format strategy, and our research finds two possibilities. Oldies targets the "Oldies Core," but also the "Gold 'N' Country Fans." Since they're a key segment for W$$$, an Oldies station will cannibalize the cash cow.
That's not a great idea, especially since Alternative can deliver the "X Rockers" -- mainly 18-29 men dissatisfied with the market's classic-skewing AOR.
The Outcome: Our broad-based research delivered a strategy that gave the client a bigger, broader overall share. W???'s young men complemented W+++'s young women. And W$$$ became a consistent #1, as W??? took a big bite out of the AOR. Not bad!
This broad-based approach is also cost-effective because one big project is simply less expensive than multiple smaller, more narrowly-targeted studies. While a broad-based project requires a bigger sample than one narrowly targeted, 600 interviews with 18-54's (for example) is NOT twice as expensive as 300 interviews with 18-34's! For one thing, the narrower the target, the higher the cost per interview Secondly, interviewing is only one (albeit major) aspect of the cost of research...other aspects are less affected by sample size.
Of course, a project that serves two or more stations may deliver less detailed information for each station...a survey can only be so long. But remember, the focus of strategic research isn't small details...it is the big, "broad strokes" of strategy, the "forest" much more than "the trees."
When it comes to "tree research" -- that is, research that focuses on the execution of strategy -- consolidation can yield cost-efficiencies as well...
Auditorium music tests require a narrower target than strategic studies. By recruiting for more than one station at a time, however, you can effectively broaden the overall target, thus reducing the cost per recruit.
Say you want 20 to 39 year-old women for your Hot A/C AMT. When you call a household and only a man is home, you lose. When the 33-year-old woman at home only cumes Country, you're now "0 for 2." These "strikeouts" increase the cost of recruiting.
But what if you also own a Hot Country station in the market? Its target might be 18-44 adults. Now that 33-year-old woman does qualify...you're "1 for 2." If that first man you contacted cumes Country, you're "2 for 2."
The point is, anything that improves your "hit rate" cuts the cost of recruiting. It's not going to make AMT research inexpensive, but IF you own more than one station in a market that needs music testing, definitely recruit for them and conduct them at the same time.
This cost-saving approach also applies to other kinds of executional research -- in-house callouts, focus groups, etc. If you plan on conducting projects for more than one station, recruit for them simultaneously, if possible.
The bottom line: Consolidation definitely does NOT reduce the need for research! Multiopolies must strategically position their properties and satisfy listener needs. But they can also benefit from "efficiencies of scale" when conducting research.