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Taking Its Own Medicine

At 50, Magid Follows Its Advice And Embraces New Media 10/26/2007 08:00:00 PM Eastern

Back in 1976, Frank Magid remembers taking a group of top ABC executives on a retreat to a Wyoming ranch. At the time, his firm, Frank N. Magid Associates, was already famous as a kind of Mayo Clinic for broadcast TV, celebrated for its use of innovative research and consulting techniques to boost ratings for local TV-news programs.

But that week, the big-city television executives got a lesson in much more than the TV industry. “Even in his early teens, my son Brent was already an expert fly fisherman and a wonderful rider,” Frank recalled. “Every morning he’d go to each cabin and wake them up. Then after the business meeting, he’d teach them something that many of them had never experienced: fly fishing or riding.”

As Frank N. Magid Associates celebrates its 50th anniversary, much has changed in the television industry. But the company — now under the leadership of president and CEO Brent Magid — is still thriving by teaching media executives new and often unfamiliar skills.

Besides its longstanding work for local and national broadcasters, the company now does extensive research and consulting work for cable, multichannel TV, first-run syndication, Internet, wireless, gaming, newspapers, magazines and other media that it uses to help companies adapt to rapidly changing consumer attitudes and technology.

“For many years, a lot of people just knew us for work in the local television business, but we’ve grown at every turn along with the expanding and changing media and entertainment business,” Brent Magid said. “We’ve taken our own medicine about the need to adapt to those changes. Today the depth and breadth of our experience and research in every aspect of the media business sets us apart [from other research and consulting businesses] who work from project to project or only know one or two areas.”

That strategy seems to have paid off. While the firm does not release financial details, it currently has the largest client list in its history, and is on track for another record year financially, despite a cost-conscious corporate environment that has hurt other consulting companies.

“They have become premier research company in country, in part, because they have evolved into this amazing organization that has its eye on the future and its hands in every aspect of this business,” said Steve Mosko, president of Sony Picture Television, whose company works closely with Magid in a number of areas.

That doesn’t mean the station business, which was long the company’s core media practice, has in any way become less important.

“Our diversification has really helped bring greater value to our clients regardless of their business,” said Steve Ridge, president of television and corporate executive vice president for Magid. “In today’s competitive environment, you can’t look at TV in isolation from cable, the Internet, wireless, gaming, and all the other ways consumers can spend their time.”

“This has always been an unbelievably energetic company that was always looking to what was next, without taking their eye off what they were doing now,” added Dick Haynes, the company’s senior vice president of research.

Clients agree. Sony’s Mosko noted that even though Magid has evolved into a very large company, “they still treat you with the service and respect you’d expect from a small company. They’ve kept the Midwestern values” of their roots.

One of those key values has always been rigorous research. Andy Fisher, president of Cox Television, said that his company maintained a long-standing relationship with Magid “because they’ve stood the test of time in consistently supplying the highest quality data.”

Beyond its high standards in designing and completing research, Fisher also highlighted what he calls “the art form” of research and consulting.

“You have to really think through what it is you want to know and then decide what you will do about what you have learned,” Fisher said. “Research may not be glamorous, but getting the right answers to those two questions is terribly important for us and Magid has always been extremely adept at forming and answering those two questions.”

Newer clients in the cable and online worlds also highlight the company’s ability to design accurate research studies and then use the results to help them expand their businesses.

One example, said ABC Family senior vice president of marketing John Rood, was Magid’s groundbreaking research into teens for the network a few years ago. This led to the creation of the Millennial Strategy Program that now works with more than 45 companies, helping them better understand the attitudes and the media behavior of the so-called millennial generation born between 1977 and 1996. (See story, page 5A.)

“The insights that came out of that research were a defining step in the development of our brand,” Rood said. “It has driven consecutive seasons of ratings growth, the record upfront sales we had this spring” and big upticks in Web site traffic.

Magid has also been working with ABC on its broadband video offering at ABC.com. “The fact that we’re continuing to do it every quarter and are now in our fifth wave indicates just how happy we’ve been,” said Mark Loughney, vice president of sales and strategy research for the ABC broadcast network.

THE BIG QUESTION

Despite the massive expansion in the company’s business, founder and chairman Frank Magid stressed, “From day one, our central concern has remained the same: Why do people do the things they do?”

That relentless pursuit of ever-changing consumer behavior also explains the company’s expanding operations in recent years. “Frank was always challenging fundamental assumptions,” said Ridge. “He was always one or two or three iterations ahead of everyone else in anticipating the evolution of the media landscape,” seeing the importance of FM radio, satellite TV, cable and other newer media years before many of his clients saw their potential. (See story, page 3A.)

Similar attention to media changes also runs through the company’s current work with more traditional media.

Bryne Burns, manager of research with the North American Television division at Magid, said that she has been spending a great deal of time in the last year, helping stations adjust to the impact of local people meters and online offerings.

“When your advertisers have ratings 365 days a year, that requires a completely different mindset than the traditional sweeps mentality that has so long dominated their thinking,” Burns said, forcing changes in the way stations promote their programming and work with advertisers.

Earlier this year, Magid also set up the Magid Media Labs, which has been working with stations to help produce content for a variety of platforms that can be turned into new revenue, said Jaime Spencer, the Labs’ director.

Many stations have been slow to exploit digital media and have often misunderstood the way consumers use the Internet and other digital platforms. “They have a lot of ground to make up,” Spencer said, and to do that, “they need to completely rethink the way they create content. Simply repurposing TV content for the Internet doesn’t work.”

Stations that understand consumer online behavior can, however, tap into new revenue streams. In Boise, for example, Magid client KTVB created a local classified Web site that has overtaken the newspaper’s Web site in that market, according to Spencer.

In that work, Magid Media Labs also draws on a growing portfolio of online and digital work.

Mike Vorhaus, a senior vice president and managing director who was hired in 1994 to help the company expand into newer media, said that the company’s expertise in local markets and consumer attitudes helped them get work for AOL on the Digital Cities project.

Then, AOL’s success attracted the attention of other firms. “At one time or another, we’ve worked with all the major players,” Vorhaus said.

That success also led them into work on the gaming industry. After one of their online clients was acquired by Electronic Arts, they did some initial work with EA in 2002. “They were so happy they commissioned more work,” Vorhaus added.

Today, the company works with many of the major game developers and has an exclusive relationship on the hardware side with Sony, said Brent Magid: “It is a huge business for us.”

Sarah Holmes, an executive director, who headed up the initial study with EA and now spends most of her time in the video-game industry, said Magid’s success there is another illustration of how high-quality research in one field has allowed them to expand into new areas, “Our work in TV led to our new media work and then gaming.”

A similar dynamic helps explain the company’s moves into a number of other sectors. Expertise in local broadcast programming, for example, led to work with broadcast networks and then first-run syndicators.

“Today we work with pretty much all of the top syndicators,” said Dan Wilch, vice president of consultation at the company’s entertainment division.

“The extensive work we’ve done with cable programmers to help them brand themselves with original programming was a natural extension of the work we had done with syndicators,” added Vicki Cohen, executive vice president at the company, who founded the New York office she now runs and is the co-head of the entertainment division.

Success with cable programmers has, in turn, expanded into extensive work with a number of cable operators, including Cox Communications and Comcast.

Likewise, the company has successfully expanded its longstanding practice of training TV talent, into a lucrative practice of advising corporate executives on how to better communicate with the media and investors, said Kate Loor, vice president of the company’s communications practice.

Brent Magid said, in the wireless area, the company’s expertise in content helped land work with the Cellular Telecommunications Industry Association, a trade group for wireless companies, to develop ratings for rich media content for the cell phone.

Today, the company works with most of the major U.S. wireless carriers, as well as a number of companies providing content, said Magid vice president Rob Yarin. Having the expertise in wireless “gives us the broad background that we can use to help company create content for platforms beyond television,” he added.

This wide-ranging view of the media also lies at the heart of two of the company’s highest profile research and consulting projects, Magid Media Futures and the Millennial Strategy Project.

The Magid Media Futures project was set up in 1997, long before cross-platform plays had become a mantra at many media companies, to help “traditional media clients understand and hopefully fully embrace all the new digital technologies,” said Maryann Baldwin, vice president of MMF, who set up the program.

The project, which does three or four major studies a year, now has over 10 years of data on changing media usage and consumer attitudes.

The company also set up a separate Magid Advisors unit in 2006 that now provides strategic advice to a long list of major media companies, private equity groups and venture capital firms as clients.

“With the research and the operational insights we have in all the media and entertainment sectors, we’ve become an extremely valuable resource for corporations and investors making large investments and strategic decisions about the future of their business,” Brent Magid said.

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