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First Mediaworks


07/26/04 The Danger Of A Preferred-Vendors List

A famous cartoon has General Custer on the front line, battling Indians with handguns and rifles. Standing in the wings is a salesman with a Gatling gun (early machine gun). The caption reads: “I haven’t got time to see a salesman. What we’re using works just fine.” Of course, he lost the battle.

Infinity recently announced that it had developed a list of preferred vendors to be used by the company. It evidently means a restriction to certain hardware and software vendors. The company also will use only certain consultants, and managers must select from this list.
Picture this: A cluster manager explains to Steve Rivers, head of Infinity programming, that a ratings disaster resulted from using “XYZ Consultants,” who directed the station with the poor results. Rivers might instantly think, “I’m never using those guys again; they screwed up one of our radio stations.”

Maybe he did not have time to gather all the facts. If he were to phone XYZ Consultants, he might hear that the consultants documented that the station followed only 20 percent of XYZ’s advice and that XYZ had many proven successes when the program was followed properly. Maybe the station manager thinks XYZ Consultants were actually to blame. Or maybe the manager knows she did not follow XYZ’s advice, and she wants to avoid censure. Scapegoating research and consultants is an old practice in radio. Meanwhile, Rivers thinks XYZ is a poor company — when they may not be — and XYZ can’t get future Infinity business.

I certainly see the value of knowing which vendors have great track records and which do not, and sticking to the good ones, but here’s at another scenario. Let’s assume that most research for Clear Channel stations is conducted by Critical Mass Media (CMM), a company owned by Clear Channel. Even though the company does not insist on using CMM, managers want to do what is best for the company, so they all use CMM. What if this research company (which has a great track record of success) suddenly makes mistakes or misses valuable information and, as a result, presents flawed research and direction. The company might not recognize that the research is the problem, and placing all its eggs in the one basket could mean company-wide disaster.

A preferred-vendors list is dangerous when it leaves no room for innovation or change and allows vendors to get lazy. Innovators today may not be innovative tomorrow if they get fat, rich and comfortable. We all know that competition is the motivation for innovation. Innovation in big radio companies usually comes when a small-town manager decides to buck company trends and do something new. Maybe it’s using a new piece of equipment. Maybe it’s a new NTR plan or a new research company with a new technique. Its success spreads through the company, and everyone wins. If that manager is allowed to use only pre-specified consultants or companies, innovation isn’t likely.

Historically, big companies do not innovate. Most great new ideas in radio come from small markets and independent broadcasters who have the guts to try something new. They don’t have to “look good” to corporate executives or on a quarterly earnings report.

There is importance in using only one traffic system company-wide for consistency, and doing this for most product categories may seem like a good business practice, but variety in vendors and in people is the key to innovation.

What if, in 1960, Bill Drake had come to Infinity and said, “I’ve reinvented radio”? If he weren’t a preferred vendor, he wouldn’t have been considered, and radio wouldn’t have been revolutionized. We need innovation more than ever, and a preferred-vendor list could end innovation at companies that implement them.


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