Not quite everybody, it seems

Editor’s note: Ken Newman is a former market research analyst at CBS Entertainment.

As product and service offerings across all industries become more and more sophisticated, manufacturers and marketers must continue their efforts to better understand both consumer psychology and the psychodynamics of the production process. Nowhere is this more evident than in the turbulent world of television, where “going by gut” is an all-too-accepted method used by seemingly sensible executives in a multibillion-dollar industry. Failure to understand the psychographic intricacies of the marketplace and even the psychodynamic subtleties of the creative production process can often cost entertainment corporations hundreds of millions of dollars in profit and deny viewers memorable programs, as truly profitable (and worthwhile) shows are never developed or sufficiently supported while mediocre programs abound.

Nonetheless, some shows that struggle to reach the air and/or struggle early on the air, like Seinfeld, Cheers or Everybody Loves Raymond, occasionally escape this fate and become both audience favorites and huge financial windfalls for their corporate parents.

A study of Everybody Loves Raymond - which was heavily criticized by in-house CBS research findings born of a method that ignored the psychographic properties of the television market - can perhaps shed light on ways to invigorate market analysis techniques and keep them up to speed with the pace of product innovation.

To begin with, television program production and marketing are integrally related. In fact, one major problem is that the two are often tangled together and confused as one. In analyzing this complex field, a framework is needed through which the many different influences in each area can be effectively isolated for study. A basic framework from Marketing 101 such as the four Ps of the marketing mix (promotion, pricing, placement and product) serves this purpose well.

Promotion

Promotion - in the form of advertising, on-air promotions, conspicuous branding (i.e., “from the producers of Friends,” etc.), “star power” casting, personal appearances, magazine covers, favorable reviews, strong word of mouth, publicity stunts, and so on - can be a very influential element in the successful television programming marketing mix. Promotion has never been a Hollywood shortcoming; however, its preponderance may sometimes be an overcompensation for poor strategies in pricing or placement or for a weak product.

Pricing

In television, the only direct cash cost paid by most viewers is their monthly cable or satellite bill. Often including extra fees for premium networks and services, for gatekeeper competitors like cable and satellite providers, pricing is an important consideration in determining marketing strategy. That said, however, even accounting for premium networks like HBO or Showtime, the dollar cost of a given program on a given network is difficult to break down by program and, more importantly, is of less interest to the viewer than the choices of shows themselves. (Obviously, alternatives in the form of home video and pay-per-view/video-on-demand do also exist - and are in themselves businesses that demand serious attention - but the market share for these substitutes rarely reaches or exceeds 5 percent according to Nielsen research, so they are not as important here in analyzing the pricing strategies needed to attract the other 95 percent of the market.)

Instead, inherent in the transaction between viewers and programmers is the amount of attention viewers are able or willing to “pay” to a particular program. Further, the capability of individual viewers to pay attention to programming is in turn influenced by three other factors: their psychological makeup/attitudes, their mood and their time budget.

Psychological makeup/attitudes

Intellectual products such as television programming are primarily of cerebral and/or emotional utility to viewers. It is widely accepted that demographic characteristics such as age and sex play an important role in influencing a viewer’s programming preference. However, based on Nielsen research, the uneven distribution of viewers among these demos for any given night suggest that age and gender are not the sole influences for viewing preference. An individual’s overall psychological/attitudinal makeup - which is strongly influenced by their age and gender (as well as other demographic categories like education level, kids in the household, etc.) - is a better means for predicting viewers’ interests.

Mood

Related to an individual’s psychological or attitudinal makeup is their mood. As people’s personalities differ, so too does the frequency and variability of their mood. Mood can act as a modifier to viewers’ baseline behavior and attitudes, changing their resulting viewing preference. In turn, as viewers’ moods change, they might migrate from one psychographic/attitudinal segment to another nearby. For instance, a viewer who falls in the Quality Watcher segment (see text box) might migrate towards the Fashion/Trend Conscious segment to watch a guilty-pleasure action drama like 24 after a long day of work. Or perhaps a Fashion/Trend Conscious viewer, after an equally tiring day, might migrate towards the Home and Hearth segment to watch Joan Of Arcadia for a feeling of inspiration.

Accordingly, as moods can vary throughout the day (with mood changes among viewers within similar market segments remaining approximately parallel as a function of their shared lifestyles/attitudes/psychology), it is important to keep in mind that the programs a viewer might watch during the day could be different than the ones they would view in the afternoon or evening or on the weekend or, for that matter, with children, parents or friends present. Even more, moods might change from watching programs themselves, as a viewer who is “laughed out” might switch away from comedy to drama or news or reality and/or vice versa, or even (to the consternation of television executives) turn off the television set altogether in favor of another activity.

Time budget

Although a particular program may be in line with its targeted viewers’ tastes and even their moods, the viewer may still not be able to commit time or pay attention to the show if they don’t have the time or if they can’t afford the time. Viewers can make time to view a particular program, but at the expense of other programming or another leisure activity. Accordingly, time budgets have a definite limit (with time budgets among viewers within similar market segments also remaining approximately parallel as a function of their shared lifestyles/attitudes/psychology). Only so many shows appealing to the same audience can succeed until the market becomes saturated. In turn, new programs introduced into a crowded market segment might fail (or at least dilute viewership for other programs appealing to the same group).

Placement

The third of the four Ps of the marketing mix, placement (or time-period scheduling), requires identifying the time and place to air a program to maximize its potential viewership. A program will not be seen (purchased and consumed) if it is placed inconveniently with respect to the targeted viewers’ schedules and locations. (To some extent, though, time-shifting with VCRs and TiVo has freed viewers from being forced to adhere to such rigid concurrent purchase and consumption demands, although their use rarely accounts for more than 5 percent of the marketplace at any given time. Also, the ubiquity of remote controls has allowed viewers to “shop” with greater speed.) Nonetheless, scheduling/placement strategies are influenced by five key components: distribution capacity, competition, circulation, awareness and identity.

Distribution capacity

The four major broadcast networks - ABC, CBS, NBC and Fox - are each available to nearly 100 percent of viewers. They are the television equivalent of high-rent, multi-level department stores with huge parking lots. By contrast, WB, UPN and cable networks like CNN, MTV, ESPN, HBO and Showtime are available to considerably fewer viewers, varying from roughly 70-90 percent of all potential viewers. Their lesser distribution capacity makes them the television equivalent of boutiques and chain stores, with lesser retail space, and/or smaller parking lots.

As a result, each network, as a function of its distribution facilities, has varying structural advantages and weaknesses. The broadcast networks, with their superior distribution capacities, can serve viewers in sufficient volumes so as to allow them to reach a critical mass of viewers, guaranteeing them premium advertising rates. The drawback is that they face the economic imperative of targeting large market segments, simultaneously cramping their scheduling/placement flexibility. Anything that might limit their audience, from narrow-appeal programming (which also may include programming that is slow initially to find an audience) to multiple repeats throughout the day, is generally a difficult placement strategy to pursue, as certainly as Macy’s or Wal-Mart might suffer if they were to limit their retailing exclusively to young men’s and women’s clothing or to repeat the same items throughout the entire store.

Cable networks, with comparatively less-expensive distribution facilities, albeit with comparatively less potential for advertising revenue (or in the case of HBO and Showtime, no advertising revenue, but subscription revenue), are structurally unable to accommodate large audience segments and are thus freed to focus on smaller niches, allowing them to employ a wider variety of scheduling/placement strategies from narrow-appeal programming (which may also include programming that is slow to find an audience), to multiple repeats. In turn, smaller networks do in fact focus their scheduling/placement strategies to serve their niche audiences, extending the earlier analogy, in much the same way that The Gap or Abercrombie and Fitch specialize in young men’s and women’s clothing with greater zeal than Wal-Mart or Macy’s.

Competition

Again, unlike a retail store where customers can browse and shop at leisure with the assumption that desired items will be in stock when they are ready to purchase, television programs have a much narrower window of availability and therefore demand a more immediate “sale.” Competition from other networks in the time period complicates this dilemma further as viewers (those not time-shifting with VCRs or TiVo) cannot consume two programs simultaneously, forcing programmers to carefully consider rival network schedules with respect to their potential to siphon away already difficult-to-reach viewers. This involves fits of gamesmanship and strategy amongst network executives, a chess game of sorts, rife with the potential for error, which is sometimes independent of otherwise optimal individual program scheduling/placement strategies. In fact, some shows (especially new shows) can be knowingly shoehorned into time periods where networks know they won’t connect with their target audience for a variety of strategic competitive reasons that are good for that network as a whole but not the new show.

Circulation

The circulation of a network is, essentially, the total amount of a network’s viewers. Understanding the levels of existing viewership/circulation throughout a network’s schedule and grasping those viewers’ respective programming interests is required before a program’s optimal time period placement/scheduling strategy can be devised.

Just as Macy’s can more easily sell a sweater to a customer already in its store buying a pair of pants than to a customer at a Wal-Mart buying a pair of pants, so too can a network get a viewer watching one of its shows to watch another program (and/or the program after it) more easily than that network can get someone watching a competitor to switch over. Also, as it makes sense for Macy’s to try to interest a pants buyer in perhaps buying a sweater too instead of, say, a large automobile, so too does it make sense for networks to understand their existing viewers and to offer them an additional program that is in immediate line with their demonstrated interests.

Awareness

Awareness is a multifaceted concept, although for the purposes here, it is defined as the familiarity viewers have with a show. Before a show airs, awareness is purely a function of the effectiveness of promotional strategies employed in the marketing mix. However, after the show airs, it is also a function of the level of viewership in its time period. This relationship is roughly illustrated in Figure 1.

Awareness impacts scheduling/ placement strategy in influencing whether a targeted viewer will even consider watching the show. A viewer may not want to bother watching a new show because they “don’t know about it at all,” “don’t know what it is about,” “don’t know who’s in it,” or “haven’t heard anything about it.” In turn, understanding the levels of awareness for a particular show helps predict viewer interest and/or viewership, which in turn is also helpful in determining a program’s optimal placement/scheduling strategy.

Identity

Perceived identity, as with awareness, is a multifaceted concept. Like a brand identity, different networks and/or time periods are “identified” by viewers as having specific types of offerings. In television, the identity of a network is equally influential and can even at times compensate for low awareness levels. For instance, many viewers may identify NBC as a hip/urban network, while they might see ABC as a more family-friendly/traditional network. Or, a specific time period, like the “post-Friends ” time period Thursday nights on NBC may be identified as a time for a hip/urban comedy, while Friday nights on ABC during the heyday of its famed “TGIF” programming block could be seen as a time for a family-friendly/traditional comedy. Correspondingly, these identities might be extended to new shows in those time periods (or on those networks). In television terms, this might cause viewers to “check out what’s on NBC,” for example, specifically based on the network’s identity and without regard to awareness of a specific program, to find programming suitable to their interests. As such, understanding various time period and network identities is also critically important in determining a program’s optimal placement/scheduling strategy.

Product

Along with promotion, great attention is put on the product/program in the marketing mix, often to the exclusion of well-designed pricing and/or placement strategies. Certainly, creating television shows is a very complex process and deserves great attention, however if the other elements in the marketing mix are poorly matched, the caliber of the product (critical considerations notwithstanding) will not always correlate to its ultimate success or failure in marketing/dollar terms.

In other words, good shows don’t always succeed because the critics say they are good and bad shows don’t always fail because critics say they are bad. Nonetheless, product-driven thinking is prevalent, with creative changes to the program often being made before adjustments to other elements of the marketing mix are considered. Often, this creates stifling, even authoritarian, top-down production management bureaucracies, which, along with the historic chaos and instability of the marketplace, serve to make a very complex process even more difficult and costly.

In fact, such micromanagement on the part of senior production executives often has unintended and undesirable effects, as decision-making autonomy is usurped from artists and technicians closest to the locus of control, allowing them less input into how their work is done, often discouraging the possibility of their engaging in more efficient behavior.

Everybody Loves Raymond

The quality of the program Everybody Loves Raymond is unquestioned. The talents of its star, Ray Romano; its executive producer, Phil Rosenthal; and its CBS network patron Leslie Moonves and his team are evident in the contribution the show has made to the pantheon of memorable television, and equally important, to the hundreds and hundreds of millions of dollars in pure profit the show generates annually for Viacom/CBS.

However, Raymond could have easily never survived its first season.

Back in 1996 when the show debuted, CBS was a network in crisis. The onetime “Tiffany network,” following years of management turmoil, had lost its shine. It lagged behind NBC, ABC and, oftentimes - among the younger viewers coveted by advertisers - even Fox. Worse still, with its viewership in decline, polishing the badly tarnished CBS identity and attracting new viewers was proving very difficult. Amidst these challenges, CBS, led by its newly recruited president Leslie Moonves, built its fall 1996 lineup of programs around big, established stars like Bill Cosby, Don Johnson and Cheers alumni Ted Danson and Rhea Perlman, hoping their star power would help promote the network, improve its identity and set the stage for what would in fact become its eventual impressive turnaround. Also developed and introduced that year, however, was the lower-profile Raymond, starring a then unknown comic, Ray Romano.

Squeezed out by the new, high-profile shows for choice time periods, Raymond was forced to the less desirable Friday 8:30 p.m. slot, following the sitcom Dave’s World, featuring former Night Court star Harry Anderson. Dave’s World, loosely based on the life of humorist Dave Barry, was never close to being a hit show, yet for beleaguered CBS it was good enough at the time. Hopes were a little higher though for Everybody Loves Raymond. Unfortunately, its initial performance was as inauspicious as Dave’s World was mediocre. Although holding Dave’s World’s tepid viewership, Raymond struggled badly its first few months on the air, trailing its time-period competitors, NBC’s Unsolved Mysteries and ABC’s Boy Meets World. In short, the program was hardly demonstrating itself to be the enormous hit show that it would become.

Without an established star, airing in a time period with low viewership, Everybody Loves Raymond’s greatest liability was that its awareness was very low. Further, this was unlikely to change. Introduced as one of many new fall shows, it had to share promotional resources with many other programs, almost all of which were higher priorities for CBS at the time. In turn, Raymond’s prospects for viewer ratings growth seemed limited or, at best, stalled, as its viewership could not grow until its awareness grew, as viewers won’t watch a show they don’t know about anymore than a Macy’s or Wal-Mart shopper will buy a product they aren’t familiar with, absent a strong identity - something that neither Everybody Loves Raymond nor the CBS Friday night time period possessed.

By December of 1996, Raymond was on the bubble. Objectively, the show’s ratings had been lousy for months and it was hard to determine if the program was in fact just another show with a mediocre draw or if it had growth potential were viewer awareness of it to increase.

Further inhibiting Raymond ’s potential growth was the fact that awareness itself also develops at different rates depending on the targeted viewing segment, sometimes making it take even longer to distinguish between a mediocre/failed show and a would-be hit show that takes time to find its audience.

Putting psychographic segments aside for the moment and looking at the viewing populace by simpler, component demographic categories, the show’s core intended audience, men (especially younger men) traditionally watch less television than other groups, as they generally are working long hours establishing their careers, dating or engaging in whatever other activity restricts their television viewing time. In turn, CBS’ on-air promotion/advertising for the show was not as effective with them in raising awareness since, watching less television, men were less likely to be exposed to it. Nor were men as likely to stumble upon the show in the course of watching television as, again, they didn’t watch as much television. By contrast, women (especially older women), watch more television and are thus easier to promote to through television and/or are more likely to stumble upon a show in the course of watching television. Correspondingly, awareness rates among women grow more rapidly than men, especially young men, as shown in Figure 2.

Therefore, a network with low circulation among men, like CBS in 1996, was at an even greater disadvantage as it is wasn’t getting many males “in the store” to view any shows. So it took even longer for awareness to grow among Raymond’s viewers (especially men) and therefore it would take longer for the show to establish its true performance potential. Unfortunately, television executives are not known for their patience. In fact, shows like Raymond that appeal to viewers (especially male viewers) who “take longer to reach” are less desirable to a big network in economic need of reaching a big audience quickly. As a result, such shows are less scheduler-friendly, often bouncing around a schedule and never reaching their full potential, or they are prematurely pulled from a schedule altogether, leading to a downward spiral of viewership amongst those hard-to-reach viewers (again, especially men).

With fewer existing shows of interest to them, it then becomes harder and harder to introduce new programs to them as they are watching less and less television, causing those new programs in turn to be pulled before they have a chance to succeed, leaving those viewers with even fewer reasons to watch television, and so on. (In fact, this concept could in part be responsible for the much-publicized decline of young male network television viewers in recent years.)

Concern about the show

Nonetheless, as stated above, CBS faced a dilemma concerning Everybody Loves Raymond in December 1996. Executives liked the show and, given that the program was also produced by the production company of comedy titan David Letterman, its creative reputation was mostly impeccable. Still, there was concern about the show, especially within the in-house CBS research department, the department responsible for forecasting network viewership (where this author was then employed).

As was and is still custom among all broadcast television networks, early in the process of choosing the new fall lineup, the CBS research department conducted focus group testing of prototypes/pilots for each new series under consideration. In that spring of 1996, Raymond initially tested well enough that, in combination with the prestigious involvement of David Letterman’s production company and the experienced instincts of CBS’ new programming team, the show squeaked onto the fall schedule.

However, after Raymond debuted to months of mediocre performance, the CBS research department, now acutely mindful of occasional negative results in its research that had suggested the show might not be as promising as had been hoped, decided to issue a memo, clearly emphasizing only these results (and to insulate itself from fallout in the event Raymond ultimately didn’t succeed).

Circulated to senior CBS executives in December 1996, this “diagnostic analysis” memo covered “the negative comments that have surfaced regularly over time during all of the primary research,” although it stated, “overall, focus group responses have been mixed.” In effect, however, it suggested or at least implied that Raymond might be what it appeared to be: a mediocre show with limited growth potential and, low awareness levels notwithstanding, a program that could be canceled. In retrospect, of course, the research department was very wrong. Ignoring the psychographic properties of the television market, it was the data that was mediocre, not Raymond.

Though flawed, the CBS research methodology involved in testing the show was (and still is) fairly standard in the multibillion-dollar television industry. Like all CBS programs, episodes of the show were shown to respondent groups of general television viewers, ages 25-54, at a commercial audience research facility. The resulting responses were then qualified, quantified and reported back to CBS executives.

Putting aside questions about the techniques and methodology involved in that process, however, the critical error made by CBS research was, simply, polling the wrong people.

As was discussed earlier, age and gender are only some of the components that influence viewer psychological makeups/attitudes and, by extension, programming preferences. Other demographic factors such as income, education, presence of kids in the household, geographic region and Myers-Briggs psychological type play a large role in determining who the viewer is and, importantly, to what programming they will “pay” their attention. The CBS research department’s polling of simply general television viewers, ages 25-54, was the equivalent of Democratic pollsters quizzing voters 25-54 about presidential candidate preferences, without regard to other critical information like their party affiliation.

As illustrated in Figure 3, it was a methodology doomed to be inherently inaccurate, one that would very likely produce the resulting irregularities and negative reactions. In fact, given these methodological errors, it is almost a wonder that Raymond tested well enough to ever make the CBS fall 1996 lineup in the first place, perhaps a testimony to its sheer appeal. (One might also wonder about “what might have been” with other shows that have been rejected by the network research process, programs perhaps wrongly relegated to the dustbin of television history.)

Instead, CBS research should have polled mainly viewers who were in line with those Raymond ’s creator/executive producer Phil Rosenthal intended to attract with his well-constructed, classic comedy. (Such respondents could have been screened based on existing behavior, i.e., sorted by viewership of similar existing shows.) The show was purposely not positioned to be hip, trendy or edgy - things which, as Rosenthal has said in published reports, “are just not my values.”

Nonetheless, Fashion/Trend Conscious viewers were included in the general television viewers sample of CBS, resulting in numerous negative comments during the course of focus groups for the show. This in turn resulted in comments (which were referenced in CBS’  diagnostic analysis memo) indicating that respondents felt the show’s stories were “nothing fresh or new” and that stories needed to be resolved in a “more original and up-to-date way.” Further negative comments from viewers who were purely Quality Watchers were equally misleading; some of those comments in the memo derided the show for not being enough “like Seinfeld or Mad About You.” Still other negative comments came from purely Home & Hearth viewers who were often confused over the show’s concept, unsure “whether or not Raymond is supposed to be a family show...or an adult-appeal relationship show...or an edgy, sophisticated comedy.” Again, these comments were drawn from a pool of respondents that didn’t necessarily include the viewers that the show’s producers intended to attract, making those remarks unpredictive of the show’s appeal to its real viewer base.

Still, Everybody Loves Raymond was at a crossroads and, with the circulation of the CBS research memo, CBS’ senior programming executives needed to make a decision on the future of the show.

Obviously, as is now known, they chose wisely to ignore the memo, moving the show out of its Friday night graveyard and into the more highly-viewed 8:30 p.m. Monday time period following Cosby, which featured American icon Bill Cosby. In turn, in the new time period, Everybody Loves Raymond received the awareness boost it needed to establish itself with viewers, becoming the classic television show and Viacom/CBS cash cow watched weekly by nearly 20 million viewers.

Beat the odds

Ultimately, with the support of CBS’ senior executives (chiefly Leslie Moonves and his scheduling guru Kelly Kahl), the story of Everybody Loves Raymond is one of a promising show, made by talented artists, that beat the odds to get on and remain on network television for nine years, becoming a genuine television classic. And, certainly, as the BCS rankings have shown in college football (and as USC fans can attest), the value of the human element can never be underestimated, a fact to which the riches Raymond delivers to the Viacom/CBS bottom line heartily attest.

Still, the program’s uncertain early journey highlights many of the vicissitudes inherent in the conventions of marketing in the television business. Further, in this age of information where many other industries face equal marketing complexities, much progress needs to be made to ensure that customers are well served and that they are not in the future denied Everybody Loves Raymond ’s spiritual brethren, nor are their parent corporations denied the great revenues such properties can yield. In short, the tools and methods employed by managers in this age of information need to be made more precise, especially in the multibillion-dollar television industry, so as to ensure that executives can operate their organizations and serve their customers with ever greater reliability and profitability.


ARTICLE SIDEBAR

 Primary Psychographic Segments

  • Fashion/Trend Conscious: younger, urban and female-skewing, comprised heavily of Myers-Briggs “feelers,” a more emotional audience segment given to liking soap operas/serials, trendy/hip shows, shows with “heart” or “drama.” Examples: American Idol, Will & Grace, Sex and the City
  • Quality Watchers: older and male-skewing, comprised heavily of Myers-Briggs “intuitives,” an audience segment demanding “authenticity” given to liking “groundbreaking,” “innovative” programming. Examples: 60 Minutes, Seinfeld, The Sopranos
  • Home & Hearth: older and rural-skewing, comprised heavily of Myers-Briggs “sensation/judgers,” a viewing group given to liking traditional themes, family programming and uplifting messages with happy endings. Examples: Touched By An Angel, Home Improvement, 8 Simple Rules

Hybrid Psychographic Segments

  • Fashion/Trend Conscious and Home & Hearth: comprised of viewers who enjoy “hip/trendy” programs with “heart” or “drama” and traditional values and themes. Examples: Malcolm in the Middle, Survivor, Joan of Arcadia
  • Fashion/Trend Conscious and Quality Watchers: comprised of viewers who enjoy “groundbreaking” programs with “heart” or “drama.” Examples: Friends, Six Feet Under, 24
  • Quality Watchers and Home & Hearth: comprised of viewers who enjoy “authentic” programs with traditional values and themes. Examples: Everybody Loves Raymond, CSI, ER