November 27, 2015

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08/06/07 The Pepsi Generation

Wake up. There is no next generation.

I always thought Pepsi was smart for marketing to children and preteens who could not buy their products. Even though Pepsi knew this strategy would not have an immediate impact on sales, they were convinced it would create a future for Pepsi. Meanwhile, Coke focused on immediate return with no concern for future buyers. Coke ignored the future generation while Pepsi cemented their brand.

Pepsi, the underdog, decided that a head-on strategy to convert current Coke buyers would not be as effective as a strategy to steal the next generation. Then the Pepsi generation came of age.

In radio, quarter-by-quarter thinking demands that every station is profitable today. Like Pepsi, we need the next generation.

There used to be stations geared to preteens and teenagers. Teeny-bopper stations were a major part of Top 40, but over time targeted audience research increasingly compelled stations to focus on the demographics advertisers sought, and program specifically to capture that audience. Teens were left underserved, and became less interested in radio. Itís been happening for about 10 years now. Over roughly that same span, the radio industry has consolidated and gone public, increasing the pressure on station operators to deliver the financial goods now, which ó again ó means reaching the key demos.

But here's whatís happened: The 12-year-old of 10 years ago is now a 22-year-old college grad, who in three years will fall into that cherished 25-34 demographic. Advertisers love that demo, right? Oh, and let's not forget that the typical media planner or media buyer today is a recent college grad with just a few years of experience.

Is the picture getting any clearer?

For the past 10 years, kids have been downloading music, listening on MP3 players, and being seduced by other technologies. Many have no ďhomeĒ landline phone; the cell is their only phone. Now with devices like the just-released iPhone, itís also their music and video player, camera, game unit, Internet browser, and so much more. But the soon-to-be largest-selling phone of all time has no built in radio. If Apple research had indicated that a radio was a must-have feature, it would be there. And I would bet the farm that a next-generation iPhone will have satellite radio capability, with its lure of more choice and no commercials.

I feel like I am in the middle of the road jumping up and waving my arms at a semi-truck going 60 mph. Put on the brakes and take a detour.

Maybe no one believes the iPhone is radioís new competitor. Maybe everyone in radio believes people have always listened to the radio and always will because itís free. Maybe everyone believes weíve been attacked by devices before, and this is nothing new. Maybe they are right. But I donít think so.

All radio has to do in response is create compelling, relevant programming that appeals to the younger generation. And find new forms of revenue, because commercials will no longer be tolerated by new generations.

It can be done. It wonít prevent these competitive threats from gaining momentum, but it will keep radio in the game.

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