Marketing “Positioning” Principles Still Well Intact
The principles of marketing laid out by Al Ries & Jack Trout in their 1980 book “Positioning” are still proving themselves true today.
Paraphrasing one of those key marketing principles given by the authors: when entering a competitive field with a market leader; unless you have a revolutionary popular idea in doing something better–and lots of $ to promote it–you’ll likely never dislodge that market leader.
The statement resonates as cynical and disparaging. And while there are inspiring success stories of how a leader was humbled by a better, rising entity, Ries & Trout provide plenty of familiar, national examples of how high ambitions too often fell short. Today, Merlin Media is added as the latest attempted spoiler that found the postulate to be a harsh reality.
About a year ago, Merlin–a small broadcast group with stations three large markets–switched their FM music stations in New York City and Chicago to an all-news format. This move put them right against long-established and successful CBS-owned news outlets WINS and WCBS in New York and WBBM in Chicago–three AM signals with decades of experience and built-up credibility in round-the-clock news delivery. In fact, WINS was the nation’s first all-news station launching in 1965. WCBS went to the news format a couple of years later, while WBBM in Chicago became NewsRadio 78 in 1968. Being one of the most labor intensive and expensive of all radio formats, these stations, over the 40+ years, learned to develop, streamline, polish and profitize the all-news format. Time became their ally as generations were raised knowing where to tune on the radio dial for breaking news and bad weather. Occasionally these news-ers had to fend off competitors who thought they could do better, but eventually gave up. In Ries and Trout’s terms–WINS, WCBS and WBBM owned the “news” position and nobody could easily take that away.
But this didn’t deter Merlin Media from taking on the mammoths. The strategy, Merlin thought, was going all-news on FM radio After all, Merlin CEO Randy Michaels remarked, “My favorite format has always been spoken radio” and that should have a place on FM, “the [radio] band most people use”. Merlin believed the popular FM medium was their revolutionary way to steal audience from the older, perhaps stodgy, AM news stations. True, by the early 1980′s, the majority of the radio audience was moving to FM radio where the music sounded so much better. That left AM stations fitted for oldies, news, talk and sports. Why not give the FM audience their own FM news station? Just like what happened to music, Merlin envisioned the FM music audience and AM news audience “liking’ the FM convenience and quality sound for getting their information.
However, the medium wasn’t the difference maker. Put a new cola in a dynamic, newly-shaped 2-liter bottle and it still has to taste and be perceived as more exciting and better than Coke or Pepsi to steal their market share. Merlin ran into personnel, presentation and production issues in executing this complicated format. Their “news” product, albeit on FM, just wasn’t that good and wasn’t catching on. The marketing budget was quite frugal. Plus, to steal their thunder in Chicago, CBS scratched one of their FM music stations to simulcast WBBM which provided an FM outlet for their AM-based news radio. Almost a year into the format, both markets for Merlin produced minute ratings/audience growth.
On July 17th, short of ideas and money, Merlin Media dropped the FM all-news radio in both cities and returned to music formats. “It was a difficult decision to make”, said Randy Michaels, “but after a year of minimal audience engagement, coupled with the format’s inherent expense, I felt it was time to make a change.” In speaking of the anticipated audience that was to make their way to the FM news frequency needed to attract advertisers, John Gehron, chairman of the advisory board of Merlin Media in Chicago quipped, “We didn’t get enough of them.”
Now Merlin has their hands full of competing against a crowded band of music stations–many playing similar formats. But in the one area they had hoped to have a strategic advantage against just one to two stations, Merlin Media learned how very hard it is to take perception and audience away from the market leader.