Blog

Game Theory Revisited

By David Kidd, BPR

I’ve written about the importance of Game Theory previously. But given recent events in the US I thought it timely to have another look at the concept and its importance to a radio station’s overall strategic plan.

The Republican Party was pretty sure that Joe Biden would be facing off Donald Trump in this year’s’ Presidential election. A lot of planning and expensive marketing had gone into that belief. But then all of a sudden it’s not Joe Biden but Kamala Harris who the Democrats have all but anointed as their nominee.

Now one would be naïve to think that the GOP hadn’t already planned for such an event, well before the President’s performance in the first debate. This is what strategists do…….they don’t just look at what is currently sitting in front of them/what the current state of play is……they consider all the scenarios……the what ifs…so they are prepared just in case the “what if” becomes reality.

It is no different in radio when it comes to strategic planning.

The success of a radio station’s strategy often depends on the strategies of its competitors.

As a result of this interdependence, the ability to anticipate your competitors’ strategies is essential. And this highlights the importance of strategic-planning tools such as Game Theory and Scenario Planning.

How many times in a strategy meeting do you ask: what if a competitor station changed format? What if we changed format? What if we lost our successful morning show?

Knowing what you would do in a certain situation is one thing.

But the other key aspect of Game Theory is correctly defining what your competitors would do.

This is not easy.

You need the ability to reverse-engineer the moves of competitors and predict what they are likely to do, what they will avoid doing and what they are actually capable of doing.

Getting inside your competitors’ heads is difficult because radio stations (and their decision makers) are usually very different. They often have different cultures, different theories on programming strategy, different budgetary pressures and always…..different talent in their line-up.

To really play Game Theory you have to think like your competitors……not think like you would in their situation.

You must think like your competitors’ decision makers, which will usually be the Group Content/Program Director or CEO but don’t rule out majority shareholders either. And station programmers will also have a voice in the room.

This approach moves you into a thought process that helps turn competitive intelligence into competitive insights.

Too often when a competitor launches a direct attack, a station will formulate a defence strategy after the event. In an ideal world, the defence strategy would already be prepared and ready to be implemented immediately so as to blunt the competitor’s attack.

As Sun Tzu said: “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”