News Analysis: On air and on target?

News Analysis: On air and on target?
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Radio’s share of advertising dollars dropped last year. With the industry keen to rectify that fall, what is in store for 2013? Jessica Kennedy reports

 

The radio industry has been no stranger to controversy in recent years. But 2012 was particularly turbulent, with two stations forced to embrace advertising blackouts in an attempt to protect their partners’ brands.

Overall, metro advertising revenue was down 1.28% year-on-year in 2012 – a decline that came despite commercial radio recording a 1.1% year-on-year rise in average weekly audiences to 9.5 million people. Ensuring the medium stays appealing to advertisers is, clearly, a key focus.

“Making sure we retain and increase our share of ad spend is paramount,” says Joan Warner, chief executive of Commercial Radio Australia. “Hopefully the election will be good news advertising-wise for radio as its real strengths of localism are utilised.”

Ciaran Davis, chief executive of Australian Radio Network (ARN), says the industry has a “perception challenge to overcome with agencies and clients” and it needs to work together to sell itself better.

The influx of streaming services (such as Pandora, Spotify, Deezer and Rdio) has seen many question whether radio’s expiry date is jumping forward.

But Ashley Earnshaw, director of implementation, planning and investment at MediaCom, believes the “apocalyptical view” of their effect on radio must be kept in check. “I see the technology as complementing the existing consumption of radio and that any negative effects on radio audiences as they now stand will be a long term and generational change in the way people listen to radio,” he says.

Rather than play catch-up, all three major FM broadcasters have moved to join the stream.

DMG Radio Australia has partnered with Rdio, Southern Cross Austereo (SCA) has invested in Digital Music Distribution for its Songl platform (due to launch soon) and ARN has imported – and is currently localising – American service iHeartRadio.

But Earnshaw says that only time will tell if the networks waited too long to throw their hat into the ring: “The market does seem really crowded at the moment and the new offerings have a hard job to do to pull the consumer away from services such as Spotify, which has had a head start.”

But Davis is not too concerned.

“The recent move by Rdio to extend the free streaming window on their service highlights the pinch that is already coming to the subscription style services.”

Earnshaw urges the networks to ensure the offerings have a strong link to social media and exploit the advantages of their talent. “The networks will have to give the consumer good reasons to migrate their listening as many people are simply too time poor to add this extra touch point to their lives.”

SCA chief content officer, Guy Dobson, is convinced that the URL is of major importance. “Ultimately we are all going to sit online,” he says.

“Ultimately the URL is the new transmitter and this is just something extra we can offer our audience.”

Digital radio, DAB+, is another area allowing the networks to create more content for audiences. SCA has four DAB+ stations with the newly-launched LoveLand, ARN has four and DMG has two.

According to Commercial Radio Australia, nearly one in 10 Australian households has a digital radio. PWC is forecasting household penetration levels of 16% by December 2013. Networks have also created DAB+ ‘pop-up’ stations for events and clients.

Turning to the traditional ratings war, SCA has turned the heat up by placing listener favorites Hamish & Andy, who host Monday’s drive-time show, in the 10am to 11am slot, Tuesdays to Fridays.

“The battle for the workday hearts and minds has always been a big one in radio,” Dobson explains.

“Dragging that breakfast listener to listen across the day is definitely good for ratings.”

Earnshaw gives the move the thumbs up: “It’s a bold move but I think it will hold their breakfast audience and they will come out with a winner.”

Last year SCA followed ARN’s lead with the 3PM Pick Up and inserted family-friendly program, Mamamia, in the 3pm to 4pm bracket. Dobson says 3 o’clock is becoming an increasingly important hour for SCA, but Earnshaw questions whether the formats are really engagement heavy.

“Bringing the audience into the real world, we must ask is the audience really engaged in the show and therefore our clients’ advertising, or are they absorbed in the school run?”

Looking to the traditional battle for breakfast and drive listeners, Sydney was the most fickle market, with ARN leading the changes charge.

On Mix 106.5, the struggling Rosso & Claire breakfast program was dropped for an all-girl duo featuring Sami Lukis and Yumi Stynes. The move brings the Sydney station in line with Melbourne’s Chrissie & Jane show, which won Mix 101.1 its strongest overall share result in more than a decade and best breakfast result in eight years.

Earnshaw believes it will offer listeners an interesting alternative to its comedy and celebrity focused rivals.

“Feedback from advertisers is particularly strong with clients looking for fresh and reliable environments in which to advertise,” adds Davis.

The revamp has seen ‘Rosso’ (Tim Ross) move to the drive-time slot to replace Lukis and her former co-host Ant Simpson.

Meanwhile, Earnshaw feels the execs over at DMG Radio Australia must be pretty pleased with the momentum of its less-than-year-old smoothfm station, which finished the year with a 3.4% share of breakfast and 4.6% of drive listeners.

The station’s positioning and identity is clear, according to Earnshaw, but he believes DMG needs to look at breakfast to really build smoothfm’s audience during the day.

Also on DMG, Nova’s Fitzy & Wippa will continue to score points, according to Earnshaw, who believes ratings king Alan Jones will continue his stranglehold of the Sydney market – with the election set to act as an accelerant for 2GB, and other talk stations’ ratings.

“Overall things look positive for talk radio in 2013,” says Earnshaw. “Across the category, the impact of changes at Fairfax and their future plans are difficult to predict.

“The format has been changing and it will be interesting to see if they are able to gain listeners from other stations. Will the disenfranchised loyalists from 2UE who want the traditional talkback format, migrate to 2GB? Potentially. We may see listeners moving from ABC and WSFM to 2UE balancing this out.”

The biggest move in talk was of course 3AW’s booting of controversy-courting, yet ratings powerhouse, Derryn Hinch, in favour of his fill-in, Tom Elliott. Asked if Elliott will win over listeners, Earnshaw said he had the benefit of being younger – a major differentiator among the talk-radio set.

“He is certainly set up for success from a ratings point of view,” Earnshaw suggests.

But will the talent changes, the focus on new timeslots and the diversification into streaming be enough to attract more ad dollars? “The radio industry needs to stay in the newspapers for the right reasons, after a year of controversial headlines that left some advertisers alienated about the negative impact on their brands,” says Earnshaw.

Only time will tell. 

*This News Analysis first appeared in the February 15 issue of B&T Magazine

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