We’re heading out to Las Vegas today for CES 2023. Why have we made this trek the first week of the new year – for the past 14 years?
As our dear friend, Jerry Lee, explains why he’s shown up to well more than 50 of these innovation-filled events:
“Because I don’t want to miss the future.”
Paul and I have been taking in CES long enough to have a sense for what we may experience this week. Even in so-called “off-years,” CES is innovative food for the brain. It is a table-setter for the rest of the year.
For CES 2023, we’re running two sold-out tours with broadcast execs, spanning the American radio spectrum – representatives from commercial, public, and Christian radio will be joining us to experience the latest and greatest in technology.
But as we will caution our guests, while innovation and gadgetry are on display across the Las Vegas Convention Center and a growing list of casino hotels and convention spaces, how media mavens integrate this technology into their strategic planning and content creation and marketing are central issues once again at CES this year.
AI is a great example. It can be an incredible tool that continues to get smarter, more predictive, and more intuitive. It is helping media and entertainment companies better connect content and advertising to audiences. But like all technology, it lacks that human touch, even as it tries to personalize and anticipate what consumers are looking for.
Of course, that’s the rub with high-tech – it often lacks that high-touch Megatrends guru, John Naisbitt, wrote about back in the 80’s.
In radio, we know how that works. A close-to-home example is music scheduling software, like Selector and MusicMaster. This technology was invented decades ago, and adoption among music radio stations has become virtually ubiquitous. No one builds their music systems using card boxes and sequence sheets anymore. Music scheduling platforms were created with the goal of organizing and streamlining a station’s music architecture, saving programmers and music directors a great deal of time.
But what are they doing with that excess time? Perhaps when Andy Economos formed RCS and created Selector he envisioned his innovation as a time-saver – a way PDs and air talent could exercise more creativity in the way music is presented. But if that was the goal, it sure hasn’t played out that way.
While music scheduling systems have efficiently focused music radio stations across the format spectrum, most stations have also used them as an excuse to settle on the most mundane music logs possible. And in so many cases, personalities on these stations seem detached from the music, as they rush their talk and create even more streamlined “speed breaks?”
Where’s the humanity?
What happened to the human touch, the “gut” in radio programming? The best algorithms in the world cannot effectively compete with a real, alive, in-market program director in touch with their audience. Or personalities who know and love the music they play.
Letting the robots take control of our media is a growing problem not just on the content side, but in the sales department. A new Google Ad product is called Performance Max, and it’s something every broadcaster should know about. It may as well be dubbed “Welcome to the Machine.”
In recent story in AdExchanger by James Hercher gives us the lowdown on this tool – at least to the degree Google has explained it – which isn’t much. The search giant is the ultimate decider on ROAS – or revenue generated for every dollar spent on an ad campaign.
PMax is the undesirable abbreviation for this product, and as Hercher concludes, “This thing is a monster.”
This Frankenstein ad buying technology connects to an advertiser’s servers and CRM metrics to create a media campaign, complete with budget caps, creative assets, and the best media to use in order to facilitate conversions among target consumers.
But here’s the thing: PMax is an impenetrable “black box” that doesn’t reveal price breakdowns, ad formats, media outlets and how a campaign comes together – or whether it uses Google assets like Maps, Gmail, or YouTube. Creative info simply isn’t visible to advertisers writing the checks. They simply must exercise blind faith the system, its structure, its software, and its algorithms will work.
The mysterious nature of PMax has led to speculation among advertising mavens – their versions of conspiracy theories. Some believe the software funnels customers into cheap Google Display Network avails – sort of a version of radio’s ROS.
The fact is, when marketers throw in the towel by ceding control over actually knowing how their campaigns work, PMax neuters them. They even have no clue which media PMax used to create their “buy” or whether the content they are advertising in is even relevant.
Some advertisers whine about the secrecy surrounding PMax, but many readily concede the technology works. And as Hercher points out, Google’s enhancements are focused on improving results rather than making the ad platform more transparent. In essence, Google is saying, “Trust us.”
If you’ve worked in advertising and marketing for any length of time, you’ve witnessed – or participated in – circular debates and conversations about what constitutes campaign effectiveness. It’s that famous quote from business magnate John Wanamaker who struggled with this question more than century ago:
Thanks to Google keeping a digital shroud on PMax, the frustration will continue, despite advertiser protestations. The most attuned buyers, planners, and account supervisors will maintain the human touch is a key component in creating successful campaigns that are crafted around relevant content.
Yet, as the media world becomes more and more systematized, the trend is clearly moving away from gut calls – that is, a measure of humanity – and more toward machine learning and automated processes, in this case, protected in a digital lock box.
That may work in some situations, but when your company is competing against the behemoths in any field – those who have benefitted by consolidation and scale – the smartest, keenest players know passion and audience connections are key ingredients in a brand’s “secret sauce.” That is, humanity.
Is there a legacy media category any more endangered that selling physical books in actual retail stores? In a world where Amazon’s Kindle has redefined entire reading and buying habits, brick and mortar bookstores have been rendered unable to compete head-to-head with “trillion dollar death stars” like Amazon. (Thank you, Evan Shapiro.)
But that’s precisely what Barnes & Noble has faced these past few decades. For a time, they tried to match Amazon step-for-step, even creating their own ill-fated e-reader, the Nook.
Every step of the way, in fact, Barnes & Noble struck out at digital. And when they shifted focus to in-store cafes, they failed there, too. It turns out running restaurants inside bookstores – is a heavy lift as well.
Ted Gioia (pictured) writes in his wonderful “The Honest Broker” column that by 2018, this venerable bookstore brand, founded in 1886, was losing $18 million a year. They then canned their CEO due to sexual harassment claims as the company neared meltdown. And soon thereafter, COVID and worldwide lockdowns made shopping in an actual store problematic.
Despite the same headwinds that helped bring down Borders and so many other bookstores, however, B&N is now thriving, with plans to open 30 new stores this year in what is being called a “big-box revival.”
What changed? The person at the top – B&N’s CEO, James Daunt
Now we know how he turned it around. Ted Gioia claims the CEO is the difference-maker in most companies, the person who is either holding the company back or deftly leading it into the future. He gets no argument from me. After four decades as a consultant to scores and scores of broadcast radio companies, the ultimate success or failure of most of them connects right to the corner office.
In Daunt’s case, his take on B&N’s vibe when he took it over boiled down to two painful words:
“Crucifyingly boring.”
And Daunt didn’t turn around B&N with data or by managing by spreadsheets. The key was exercising the human factor in the management of his tired bookstores.
Here are some of the key steps he employed to move B&N off life support and into the black:
- He took no promotional dollars from publishers – In the bookselling industry – like in radio – there’s money to be had by cutting deals with publishers. Of course, you then have to carry books that are losers, but that helps them move up the bestseller charts. Sound familiar? In music terms, we call those music adds “stiffs.”
- He gave his stores local control – On the premise that local managers know their markets the best, Daunt gave them autonomy to stock and display the books they believed would resonate with their communities rather than top-down corporate edicts.
- He made COVID a strategic advantage – Daunt used the lockdown to re-think each store’s inventory, evaluating every title for relevance and interest. By the way, this made the publishers’ jobs harder because they had to call on individual stores, rather than one-stop corporate buyers. No matter. The premise is that no two towns or bookstores are the same. That holds for radio stations, too.
- He respected his customers – Rather than “dumb down” his stores’ offerings, Daunt sought to imbue B&N with a vibe that “feeds your mind,” rather than reaches a lowest-common denominator crowd. By appealing to the most passionate readers, he was able to build back a solid base.
- He is intensely passionate about the product – In this case, of course, we’re talking about reading and books. Daunt believes that a creative business like bookselling is dependent on creativity. In order to be successful in a company like B&N, the person at the top has to love the business – and the craft.
OK, so I saved the best for last. It’s that love of – in our case – radio that often separates the ultimate winners from the also-rans. Here’s Ted Gioia’s killer quote:
“If you don’t really love the music (or books or newspapers or cinema or whatever), those cash flow projections turn out to be wrong. That’s because creative fields like music and writing live and die based on creativity, not financial statements or branding deals.”
It’s the humanity – the love of the game – that is the difference maker. Not just this year, but since radio’s beginnings. Our “founding fathers” and mothers – radio’s first and second generation owners were passionate about radio and most were also smart investors – in that order. Their broadcasting empires were built on serving communities by entertaining and informing local audiences. And they learned that (in most cases), creativity, personality, and connection were key cogs in their radio stations’ long-running success. Their love and adoration for radio were the building blocks of their companies.
When we hit that CES floor tomorrow, Paul and I will be on the lookout for brilliant technology and gadgetry – innovations that can help broadcast radio thrive once
again. But it seems obvious that someone else’s brainstorm or cool invention won’t save radio. Instead, it will come down to the fervor and passion of the industry’s leaders and how they reimagine a business that is tired, and as James Daunt described it, “crucifyingly boring.”
Broadcast radio will not celebrate its turnaround because of a savvy CFO or a clever HR Director. The rebirth of radio – if it happens – will take place because of inspirational owners, managers, programmers, and talent. It will require a firm commitment to listen to the audience, advertisers, and community leaders. It will require a noticeable dose of risk-taking and sometimes taking the road less traveled. And it will require the marketing resources necessary to spread the word to a populace barraged with bad content and too much hype.
So as we traipse around CES this week, we will be seeking out the new and the next in consumer electronics. My hunch is that we will truly be witness to some amazing technology, devices, and applications.
But we’ll also go off-course from the glitz and glamour of the Las Vegas Convention Center, and spend an afternoon at Eureka Park, the haven for bootstrap entrepreneurs with an idea and a dream. These inventors tend to be very passionate about their “babies.” Many have invested their life savings, even mortgaging their homes, to fulfill their burning aspirations.
Oh, the humanity. It’s that human touch that elevate these innovations to greatness.
Passion is a vibe, you know it when you see it, and it is absolutely palpable at Eureka Park
James Daunt and Ted Gioia would enjoy it there.
You can read and/or subscribe to Ted Gioia’s “The Honest Broker” – on Substack here.
Special thanks to Steve Newberry for the heads-up on the Barnes & Noble story.
Watch for our exclusive reports in Inside Radio from CES 2023 all this week.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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It would be interesting to hear what one of those CEO’s who are doing away with “the humanity” would have to say after reading your blog. Have fun at CES.
Fred, You post outstanding commentary. Thank you for starting the year off on the right foot, although I am a southpaw. Many lessons learned over these past few years, including adaptive radiation with cost-efficient, creative radio. With admiration.
I started to reply to your request for 2023 predictions yesterday, Fred, but deleted it when all I could come up with were negatives. Thank you for being a much-needed, positive and inspirational voice in this industry!
Great post, thanx.
I’d like to point out that the restaurant with Golden Arches doesn’t sell its lobster roll in the Midwest and you can’t buy the rib sammich in New England.
I am curious how they figured this out?
Maybe they know their markets and respect their uniqueness. Except we all like Taco Bell.
I wonder how Marconi would fit into “Eureka Park” in 2023?. He had a dream that has thrived for over a century, and we definitely see here the path to its continued success-even with massive competition that keeps introducing itself daily. I believe that we all appreciate technology, but we win the race with creativity and passion-which cab be enhanced-not replaced-by technology. The issue we see is the focus on tomorrow’s revenue rather than long-term sustenance. Will that ever change? Happy New Year to all at Jacobs Media -please keep fighting the fight.
You’ve nailed the spirit of CES, Dave, as well as the excitement and energy of Eureka Park. The inventors we meet every year at the conference are trying to change the world. (OK, it’s true – some are trying to create smart litter boxes.) Creativity and passion are the true “mothers of invention.” I think Marconi would have fit in perfectly.
If you wrote only one blog post this year, Fred, this was the one to write. You hit it right out of the park. Hey everybody, consider what Mr Daunt accomplished and learn!
But PMax should scare all of us. Advertisers using such exchanges on the internet have been blindsided the past year discovering late where their ads are actually landing–including places they would never have authorized had they known. There’s even an organization dedicated to pulling their coats to the bad news; and embarrassed advertisers have had to do damage control. Check it out:
https://checkmyads.org/about/