With the onslaught of new media distribution channels, content providers, and technology, you don’t hear much these days of radio stations embracing an extension of their brand into the retail space. More often than not, radio will look for new distribution channels to extend their brand and, on the retail side, look more at brand absorption.
Brand absorption occurs when a radio station absorbs a pop culture phenomenon or strong retail brand onto their own brand. This concept has been nearly ubiquitous with radio and the iPod. Radio stations attached themselves to the iPod explosion via “myPod” request shows or “shuffle” weekends. You also see this also with the various promotions, contests, and shows tied into reality television brands like American Idol or Deal Or No Deal.Brand absorption makes a lot of sense in world focused on pop culture, but having this be a one-way street is unhealthy for a radio brand, which can quickly become overwhelmed by perceptions of being nothing more than a copycat with few original ideas. The evolution from brand extension to brand absorption is somewhat of a striking occurrence when you consider that radio used to be one of the leading media in terms of brand extension. Not that long ago, if something was being consumed by listeners, radio attempted to call it their own.
One of my favorite examples was heritage rock station in St. Louis KSHE. The station had long been using the phrase “real rock,” and in the early nineties management decided to use the Hard Rock Café idea and extend the KSHE brand into a restaurant. It made total sense: In St. Louis, rock’n’roll practically was KSHE, and the station had 20 years of memorabilia to line the walls. Thus, the Real Rock Café was born. Unfortunately, this was a brand extension that waded a little too close into the brand absorption waters, and the Hard Rock Café sued the station.
While the Real Rock Café didn’t work out for legal reasons, the idea was perfectly reasonable and one that radio has all but lost: Extending their brands into a retail space where non-advertising revenue can be generated. Thankfully, the art is not completely lost. A current example from Canada provides the perfect example as to why brand extension is still a relevant concept for radio companies.
Astral Media has an up-tempo music network called Energie that broadcasts throughout Quebec, Canada. Couche-Tard is the largest convenience store retailer in Quebec with over 500 stores. When management of the two companies got together, they came up with an audacious plan for utilizing Couche-Tard’s retail strength with Astral’s Energie brand and marketing muscle—the Energie drink. A Red Bull type of energy drink branded to the radio network.
The two companies contacted beverage manufacturer and distributer Cott, and the Energie drink product was born. Despite the risks of going against a market leader like Red Bull, confidence was high. One reason for optimism was the nature of the drink itself. The companies had done their research and found that energy drinks are popular with young adults aged 18 to 34 since they fit their lifestyle and that, compared to the general population, 40% of them were already Radio Energie listeners.
Underscoring such data is the undeniable power of combining a retail goliath like Couche-Tard and a broadcasting/marketing platform like Radio Energie. “It’s clear for us that energy drinks are a product that already appeals to Couche-Tard customers. Our association with Astral Media Radio enables us to combine the strength of our distribution network with that of Énergie’s promotional machine. We are therefore convinced that énergie drink will be a great success throughout Quebec,” said Michel Bernard, vice-president, operations for Eastern Canada at Couche-Tard in the initial press release.
The results of the Energie brand extension and retail partnership were extraordinary. The drink was launched at the end of February last year and by July had sold over 500,000 cans. As of today, the Energie drink has sold over 1.5 million cans.
Such amazing results didn’t surprise Cott executive Gus Prokos, who stated simply, “You had one party that owned the airwaves and one that owned the store shelves.”
I asked Prokos about the political ramifications with Red Bull, but Prokos dismissed them entirely: “Couche-Tard is such a large company that they didn’t need to worry about Red Bull. Still, the result was fine for Red Bull. The Energie drink actually grew the category, as Red Bull’s sales increased over the past year, as well.”
Brand extensions are difficult because they require partnerships with retail, distribution, and manufacturing. But the payoff is such that they certainly shouldn’t be ignored. As Astral saw in Quebec, the money to be made can be substantial.
Radio can do this for more than just energy drinks, but for radio groups looking to go this route, Prokos pointed out that Cott can do the job with a turnkey manufacturing and distribution solution. He can be reached at gprokos@cott.com.
Tying into pop culture is important, and radio should not ignore phenomena like the iPod and Deal Or No Deal, but at the same time radio shouldn’t be afraid of extending their own brands, unlocking untapped revenue from a brand that means a lot to their listeners—their own.
