One of the most dangerous marketing blunders a brand can make is to link its business to an aspiration rather than the thing it is best known for. As Business Week points out:
Advertising your aspirations only invites people to catch you failing to achieve them, and these days it's easier than ever for them to spread the word. Aspirations are, by definition, promises that can't be fully kept. Don't announce them, just try to live by them-use them within the walls to rally your troops but don't let them escape to rouse the ire of your customers.
Which brings us to iHeartMedia. Last week Clear Channel became iHeartMedia.
Maybe this is going to be a huge success. Maybe this will catapult the company into the digital realm. Maybe not.
In announcing the change Clear Channel’s CEO Bob Pittman declared:
iHeartMedia reflects our commitment to being the media company that provides the most entertainment to the most engaged audiences wherever they go, with more content and more events in more places on more devices.
Elaborating in a New York Times story, he noted:
To capture all these concepts and still call it the legacy name really is a disservice to what we are and what people here have built. So we've taken our biggest national brand, our newest brand, our most digital brand, and made that the name of the company.
The company has certainly been moving in that direction. Clear Channel stations have been aggressively pushing the iHeartRadio thing even more than they have their own station identities, so maybe this is the next logical step.
As AdAge added:
Mr. Pittman and his team decided to align itself more closely with iHeartRadio because it's what the company has been using as its consumer-facing brand for several years. "We haven't used Clear Channel with consumers in years," Mr. Pittman said. "We use iHeartRadio on air."
Clear Channel stations may all use iHeartRadio, but after two years and tens of thousands of promos Clear Channel still isn't a single brand that Pittman can rebrand. It is a company with over 840 brands.
When you think of Fruit of the Loom, do you think of Berkshire Hathaway? What about Geico, Burlington Northern, or See’s Candy?
These companies and fifty more are owned by Warren Buffet’s company, but only four have Berkshire Hathaway in their name.
Warren Buffet understands the value of an established brand name and wants his companies to continue strengthening their brand names even after he buys them.
Radio stations from Z100 WHTZ in New York to Love100 WLVH in Savannah are the brands of Clear Channel.
The 245 million listeners who tune into Clear Channel stations do not do so because the station is a Clear Channel station. They couldn’t care less. And rebranding the company will not change the relationship.
In reporting the name change The Hollywood Reporter noted that less than 5 percent of Clear Channel’s broadcast listeners engage with digital platforms. Just 5 percent.
Take a look at Clear Channel’s streaming success based on Triton Digital figures. The top line is Pandora session starts. Nearly 2 billion. The lower line is Clear Channel at almost 234 million. (Click to enlarge.)
Look at the tremendous gap between the two. And remember that over the last two years as the 840 Clear Channel radio stations were flogging iHeartRadio, with its promotions, and concerts the gap has been growing.
And to make matter’s worse, Clear Channel streaming (along with most others) seems to have plateaued. Consumption hasn’t significantly grown for over a year.
iHeartRadio may be the company’s newest brand, but those are ominous signs for a company pinning it’s hopes for the future on a streaming platform.
According to the New York Times, Pittman claims that iHeartRadio accounted for "hundreds of millions" of dollars, a fraction of the $3.1 billion in radio revenue the company made in 2013.
Imagine if the energy going into iHeartMedia were put into growing the revenue of each of the 840 stations by just 1 or 2 percent.
Why would the leader of radio’s largest group suddenly change its name? An interview with the Wall Street Journal gives us a clue:
Mr. Pittman said he'd seen first-hand how a corporate name change can open doors. When his former employer, the Warner Amex Satellite Entertainment Company, switched its name to MTV Networks, the division that Mr. Pittman had founded, Mr. Pittman said advertisers suddenly became much friendlier, saying "Oh, great, we know your products, come on in."
Pittman is recycling the MTV story, hoping for a similar outcome.
The problem is the analogy. MTV began as a national brand that needed a more unique national identify. Clear Channel isn’t a national brand in the same sense that MTV is. It is 840 brands all of which are stronger in their individual markets than iHeartMedia.
I've seen this move before. When established companies like Clear Channel struggle to keep their leadership positions in industries that are rapidly transforming - like media - renaming is rarely the solution.
Time will tell. Maybe the move will open the doors of media buyers that dismiss radio as irrelevant. But the possibility remains that the buying community will see this as Jennifer Meyers does, as a desperate attempt to appear relevant.
If Pittman is right, he stands to grow those millions. If he’s wrong, he’s jeopardizing those billions.