09/07

Ad Guru John Winsor says Radio Needs a New Business Model

John Winsor is the head of a fabulous new agency called Victors & Spoils. John is the author of Flipped: How Bottom-Up Co-Creation is Replacing Top-Down Innovation and Baked In: Creating Products and Businesses That Market Themselves, one of my favorite books of 2010 co-authored with legendary ad-man Alex Bogusky.

I talked with John about how a top ad agency CEO sees radio today and tomorrow, and what it takes for radio to “bake in” the ingredients essential to a healthy future.

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What follows is a partial transcript of our conversation.

John, surfing is one of your avocations. What can a marketer – especially a broadcast marketer – learn from the act of surfing?

If you’re going to be a surfer you have to try to catch a thousand waves no matter how long it takes or how many times you try. You just have to do stuff and try and fail a lot. I think that’s what surfing has taught me.

Especially in this environment of marketing right now, there’s so much going on – so many opportunities. Instead of placing one big bet you have to place a lot of little bets and nurture them along. That means a lot more opportunity to really find and explore the best way to go forward.

Failure teaches you what doesn’t work even if it doesn’t teach you what does work, right?

Yeah exactly, I think that’s one of the things I love about surfing; every wave is a little bit different and it takes a different speed, different style, all those things – there are just so many variables. It’s a lot like life and a lot like work.

From your perspective atop Victors & Spoils and your history in advertising and marketing, where do you see radio now? And when I talk about radio, I’m talking about what you see radio becoming, because I don’t think it’s the same thing radio always was.

I agree totally.

I think what’s really, really cool about radio is that it has become very shareable and portable. I travel a ton especially for work and I love waking up in New York City or in Paris and hitting my iPad NPR app and listening to the radio.

I think one of the thing that’s great about radio is it’s such a centering thing. It’s such a good way to be connecting with a community, and if you can leverage digital technology as radio is starting to do, it gives people a sense of place without actually physically having that sense of place. So for me to wake up in the morning in Paris and listen to NPR, it makes me feel like I’m kind in my routine and I understand what’s happening especially on Colorado Public Radio.

And from your perspective in marketing and branding and as a radio user, to what degree do you see broadcasters embracing those digital tools not just on the public broadcasting side but on the commercial side?

I think a lot of people are doing it. I think what’s cool is that like every other medium right now, there’s this radical democratization. So you and I are having this great conversation on Skype and Skype doesn’t cost anything, so the cost of production has gone way, way down, and it means that a lot more people can be in the business of broadcasting things.

So radio is becoming more things to more people and personally I like that because I think what’s happening is it makes media way more healthy, way more productive. There’s been a trend in media to consolidate – to be framed by a very few owners. It’s the Murdoch-ization of media globally, but the great thing about the Internet and the great thing about the Wiki-ization of every piece of broadcast media from blogs and social media to radio broadcasting is that a lot more voices come to the fore and there are much better ways for people to share. I’m really hopeful for all media but it’s a radical shift.

Instead of having a big production studio and an organization with lots of local sales people and national sales people, it’s going to be much more entrepreneurial: One or two guys sitting around in a small space really doing some interesting things.

Well you can see why broadcasters have an issue with that. Because the idea that their model could be co-opted by one or two guys sitting in a bedroom doing something interesting is immensely unnerving. How does a large scale media entity – especially radio – adapt to that kind of world?

I think it’s a change in the business model.

I think you saw this early on with a lot of brand-based magazines. Once, any media magazine had the ability to take their brand online and own a category. Vogue could have been the place for fashion. Surfing Magazine could have been the place for surfing. But they were agnostic, they said there’s no monetization model, I’m not going to do it.

Well all of a sudden this revolution happens and now they’re on the outside looking in, and my sense is there’s still a brief window of opportunity to change the traditional business model and to be the curator.

There are still lots of listeners out there but instead of executionally using the same things that happened before, why not let things bubble up from places on the internet and use the traditional media to be the curator of that content. Because the traditonal media outlets have listeners and the capacity to marry both worlds.

One of my favorite things on YouTube is this kid Danny MacAskill who’s a mountain biker. He loved to ride up and down this hill and then he hit a tree and did a backflip off this tree right up the trunk and messed up his bike. His friend shot a video of him on his iPhone and posted it to YouTube. Now after a couple of weeks he had like 3 4 million hits and suddenly he’s got a huge multi-hundred-thousand dollar a year contract with Red Bull and Red Bull follows him around professionally. I love that. It’s the age of the amateur. That’s killer content.

Who decides what good content is? It’s the consumer.

I think the best channels are going to be curators once they can find the new Danny MacAskill – those stories that have “viral-ity,” take them and actually help the Dannys of the world explode their story to a much more mass audience. But in taking advantage of that I think radio can then sell advertising against more listeners. They’re the folks that are actually curating the web, helping people discover and understand those great stories, great voices, great Indie bands, whatever the content is. There’s so much opportunity to make meaning in this kind of fractured media landscape.

Historically broadcasters absolutely see themselves as curators but they see me, the program director as the curator for you, the audience. What you’re describing instead is the role of a meta-curator.

Yeah that’s a great way of putting it I think, meta-curator is a really, really good term. Somebody’s got to make meaning for me. I can’t go to YouTube and catch up on all that stuff but if I have a kind of meta-curator that helps me understand and is kind of dialed in to my interests, what a great thing.

Broadcasters continue to wrestle with this question: Are we a distribution channel or are we content creators? Surfing Magazine, chose to be a distribution channel but your point is that if you’re trying to own the category of surfing, if you’re trying to be home base for surfing, that means you have to do so across all distribution channels. And that means you’re a content creator and/or curator.

Yeah, for sure. I have a couple of premises and one is, you don’t become conservative until you have something to conserve.

So you have a business model and you build an audience then you’re going to conserve the audience. And when you have an established business you act the way you’re compensated and you focus on your biggest cost. So if I’m a magazine publisher my biggest cost is putting ink on paper. Surfing Magazine isn’t in the business of writing about surfing, they’re actually in the business of officially putting ink on paper. They felt they could make a lot more money by extending a story by four pages, spreading the copy with some nice quotes, and selling two more pages of advertising. Instead of trying to put video online.

So do you innovate knowing where the world’s going or do you just open up four more pages (or, for radio, add a new station or some more spots)? The conventional answer is a way more efficient model. The problem is it’s just a dead-end road.

Sooner or later that business opportunity is going to end.

We have been talking about the coming of the information age since the 80’s, and now it’s here. I just don’t think it’s going back. I think a lot about what it means from an employment standpoint – I really think that the unemployment we’re facing now in the US – a lot of it has to do with this fundamental change in the way we’re operating businesses. It doesn’t take as many people to produce radio as it did 25 years ago and the industry isn’t going back to where it was 25 years ago. So it means that we have to find new ways to innovate and new ways that work for us.

So your advice to the broadcaster who’s getting 80% of his revenue from traditional agency media buys is: “Get ready for a new revenue model, here it comes whether you want it or not?”

Yeah exactly. Again it’s like the “wave” thing. You just have to try a bunch of things. You’ve got to go throw yourself on the wave and you’re definitely going to fall, you’re definitely going to have some wipeouts. I think the key is you discover opportunities to have little wipeouts. You’re not going to go paddling to some double-overhead barreling thing if you’re never been on a surfboard before.

In your book Baked In, the premise was the idea that marketing is baked in to the product. Say I’ve got this radio station, this radio group, what does it mean to have my marketing baked in to my product?

You brought it up at the beginning of the conversation with KBCO. To me, KBCO was the model. It was way beyond a radio station. KBCO in Boulder represented a cultural movement, it represented their studio sessions, it represented bringing musicians into town. It was Kinetics, that crazy event at the reservoir – it was huge. They don’t do it anymore because they’ve gotten bought up and they’re trying to be efficient. And they’re being efficient by stripping everything else away.

Radio stations have to go back to that. They have to go do new kinds of events, get people involved culturally, own a marketplace, not own the broadcast portion of the market but actually own the community.

Do you remember every other year or so back in the day KBCO would change out all the spots on the air for one day and project them into the future?

Yeah, exactly. It was all that stuff. To me that was beyond what radio stations should classically be doing. And if you look at it from a cost/benefit analysis at the time, people would say, “That’s ridiculous, why are you doing these events and why are you doing all this other stuff?” But that’s what made them own that community, that’s what gave them the ability to be successful and to have this ownable, defensible brand over time.

What I hear you saying is that success is an outcome of a “why” which is really compelling. Why does your brand exist besides the “most” or the “best” music mix?

That’s totally right. I think that’s what people want to buy into and it doesn’t matter what it is. We all want to be part of a community – and I don’t mean “community” as in “local market” I mean “community” as in “community of fans with common interests and culture.”

I think that’s one great thing Facebook has proven: That community is still hugely important for all of us, and now that we have the ability to connect more globally. You and I are having this great conversation and building community via Skype. It’s an awesome thing and we have all these tools now.

Now the question for broadcasters is how can you be at the center of this community and build that community around the station and the broadcast business so it becomes much more than simply putting ads on radio and putting programming out over the air?

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