IT PAYS TO LIS­TEN

In an age of me­dia flux, ra­dio is hold­ing on to lis­ten­ers and ad­ver­tis­ers, says Lynda Brendish. So what’s its se­cret? And what’s next?

New Zealand Marketing - - Contents -

In an age of me­dia flux, ra­dio is hold­ing on to lis­ten­ers and ad­ver­tis­ers, writes Lynda Brendish. So what’s its se­cret? And what’s next?

RA­DIO IN NEW ZEALAND hit a high-wa­ter mark in April 2012 when it boasted more lis­ten­ers—81 per­cent of all peo­ple aged ten and up—than at any time in the pre­vi­ous decade. The waters have re­ceded a bit in the in­ter­ven­ing 12 months, and while some in­di­vid­ual sta­tions like Ra­dio Live, Flava and (the re­cently re­launched) Ra­dio Hau­raki have taken big hits, over­all lis­ten­er­ship dropped by just two per­cent to 78.3 per­cent.

A cynic might point to the co­in­cid­ing New Zealand launches of mu­sic stream­ing ser­vices Pan­dora and Spo­tify, but in­dus­try in­sid­ers in­sist there’s been no im­pact on lis­ten­er­ship and they re­main pos­i­tive.

“From Xbox to apps to mu­sic stream­ing ser­vices, ra­dio is still the ul­ti­mate com­pan­ion me­dia,” says Belinda Mul­grew, Me­di­aWorks’ ra­dio chief ex­ec­u­tive. “We can co-ex­ist on com­pet­ing screens.”

Bill Fran­cis, the Ra­dio Broad­cast­ers

From Xbox to apps to mu­sic stream­ing ser­vices, ra­dio is still the ul­ti­mate com­pan­ion me­dia. We can co­ex­ist on com­pet­ing screens.

BELINDA MUL­GREW

As­so­ci­a­tion’s chief ex­ec­u­tive puts re­cent lis­ten­er­ship drops in per­spec­tive.

“Cu­mu­la­tive au­di­ence bounces around but al­ways tends to come back to around 80 per­cent of the pop­u­la­tion,” he says. “At 80 per­cent, we’re com­fort­able.”

Ad­dress­ing the na­tion

New Zealand is par­tic­u­larly well-served over­all when it comes to ra­dio. We have a high pro­lif­er­a­tion of sta­tions, and the net­worked na­ture of the in­dus­try means even those out­side the main cen­tres have the ben­e­fit of lo­cal tal­ent and con­tent backed by syn­di­cated for­mats and pro­gram­ming.

Even so, the mar­ket hasn’t yet reached sat­u­ra­tion point, with eth­nic ra­dio be­ing par­tic­u­larly ripe for growth. Ra­dio Tarana, the coun­try’s largest In­dian sta­tion, has re­cently ex­panded out­side of its Auck­land base to Wellington, and man­ag­ing di­rec­tor Robert Khan says a na­tion­wide net­work is in its sights. De­spite this, and de­spite quick growth in the Kiwi-In­dian pop­u­la­tion, he says the po­ten­tial of the au­di­ence is be­ing missed by ad­ver­tis­ers.

“There is still scope for vast ed­u­ca­tion with gate­keep­ers of or­gan­i­sa­tions who fail to see the rel­e­vance of niche mar­kets and ac­knowl­edge the chang­ing diver­sity of places like Auck­land,” says Khan. “Some fail to note that there are par­al­lel economies within our cities while oth­ers don’t un­der­stand the eco­nomic ben­e­fits of com­mu­ni­ties like the In­dian com­mu­nity.”

Fan­tas­tic four

De­spite trail­ing be­hind some other chan­nels in its abil­ity to mea­sure reach (the in­dus­try still re­lies on pa­per diaries, though new peo­ple me­ters are be­ing tri­alled over­seas) or de­liver highly tar­geted mes­sag­ing, ra­dio has main­tained its share of ad rev­enue over the past decade at around 11 per­cent.

Fran­cis puts ra­dio’s strength down to the va­ri­ety of ad­ver­tis­ing prod­ucts it can utilise.

“The old 30-sec­ond ad is as rel­e­vant as ever, but there are a whole range of other means of get­ting a mes­sage across on ra­dio.”

Th­ese days ra­dio is more like a hub for a range of con­tent de­liv­ery chan­nels, typ­i­cally de­scribed as on-air, online, on-street and on-mo­bile.

“A po­tent com­bi­na­tion of four,” ac­cord­ing to The Ra­dio Bureau’s gen­eral man­ager Gill Stewart.

Di­ver­si­fi­ca­tion in con­tent de­liv­ery is ob­vi­ously pay­ing off for the in­dus­try. Stewart says mul­ti­ple plat­form rev­enue at TRB has grown by 41 per­cent over the past four years. It’s likely a large part of the rea­son for ra­dio’s ad share buoy­ancy—lat­est num­bers put in­dus­try ad rev­enue up 6.5 per­cent year-on-year in the first two months of 2013—and a multi-plat­form ap­proach is par­tic­u­larly well suited to ra­dio, where hosts of­ten con­tinue con­ver­sa­tions with au­di­ences across so­cial me­dia as well as on-air.

A num­ber of cross pro­mo­tions with tele­vi­sion broad­cast­ers have seen re­cent suc­cess thanks to such ap­proaches. Both Me­di­aWorks and TRN are sup­port­ing home­grown edi­tions of The X Fac­tor and New Zealand’s Got Tal­ent, re­spec­tively, with event host­ing, simul­cast­ing and on-air pro­mo­tion. For its part, Me­di­aWorks and Draft­FCB saw suc­cess—and plenty of in­dus­try ac­co­lades—with its Se­cret Di­ary of a Call Girl cross-pro­mo­tion with Prime. The cam­paign re­lied on dup­ing More FM DJs into talk­ing on-air about the cheeky go­ings-on in a con­ve­niently lo­cated apart­ment win­dow across from their of­fice.

“It used a good old-fash­ioned set-up, in­trigue and a huge re­veal, with the added ben­e­fit of our online plat­forms en­hanc­ing the ac­tiv­ity,” says Mul­grew.

While The Ra­dio Bureau serves agency clients and lures the big fish for ra­dio sta­tions across the board, much of the bread and but­ter of ra­dio ad­ver­tis­ing—in keep­ing with the in­dus­try’s com­mu­nity fo­cus—still comes from small and medium-sized busi­nesses. Two and a half years ago, TRN es­tab­lished an in-house agency called Carbon to ser­vice the 70 per­cent of its ad­ver­tis­ers who are di­rect clients with small bud­gets, ac­cord­ing to TRN mar­ket­ing gen­eral man­ager Tracey Fox. Carbon, which Fox says is made up from three “very ver­sa­tile” peo­ple, pro­vides a wide range of ser­vices, not just in ra­dio. “A lot of it is dig­i­tal work, but ba­si­cally we’ll do any­thing a client needs. Some don’t even have a brand iden­tity or logo,” she says. “It re­ally is for the sort of peo­ple who just couldn’t get near a main­stream agency oth­er­wise.”

Lis­ten­ing to dig­i­tal

To cap­ture dig­i­tal lis­ten­ers, both ma­jor Kiwi net­works have app of­fer­ings ei­ther al­ready out or in the works. Me­di­aWorks has in­di­vid­u­ally branded apps for each sta­tion, and Mul­grew says up­take has been “phe­nom­e­nal”, with nearly 300,000 down­loads. TRN on the other hand will give lis­ten­ers ac­cess to all its sta­tion streams from one app, and plans to re­lease its Kiwi-fied ver­sion of its par­ent com­pany Clear Chan­nel’s hugely suc­cess­ful iHeartRa­dio in the near fu­ture (it planned on launch­ing a beta ver­sion early this year, but it has been pushed back).

“iHeartRa­dio is unique in that it brings to­gether the best of live ra­dio, in­clud­ing New Zealand’s favourite sta­tions like ZM, Hau­raki and Flava, with the per­son­al­i­sa­tion of cus­tom sta­tions,” says Carolyn Luey, TRN’s group gen­eral man­ager prod­uct and dig­i­tal. “And be­hind it is the power of some of the world’s pre­mier ra­dio brands.”

iHeartRa­dio al­lows TRN’s seven ra­dio sta­tions to be lis­tened to in ev­ery re­gion across the coun­try, but Ki­wis will also be able to ac­cess Aus­tralian Ra­dio

Net­work and Clear Chan­nel sta­tions through­out the US (un­like the over­seas model, which al­lows for third party broad­cast­ing con­tracts, com­pet­ing sta­tions in this mar­ket will not be in­cluded). Spe­cial fea­tures in­clude ‘ Per­fect For’, which gen­er­ates playlists tai­lored to moods, ac­tiv­i­ties and the time of day, and the ‘Dis­cov­ery Tuner’, which al­lows users to con­trol how much va­ri­ety they hear.

“iHeartRa­dio is not about cre­at­ing playlists. It is about end­less streams of cu­rated mu­sic,” says Luey. “iHeartRa­dio ac­tu­ally makes mu­sic stream­ing eas­ier by do­ing the work for you.”

Users can se­lect a song or artist, and the plat­form cre­ates a new sta­tion. Like other stream­ing ser­vices, push­ing the thumbs up and thumbs down but­tons will fine-tune the choices to their tastes.

The plat­form was launched in the US in Septem­ber 2011 and it was a huge suc­cess, gar­ner­ing 20 mil­lion users in only 13 months, a mile­stone it reached faster than Face­book, Twit­ter, Pan­dora, Spo­tify or In­sta­gram. It has gone on to be one of the fastest grow­ing dig­i­tal ser­vices in his­tory, sec­ond only to In­sta­gram, and at twice the rate of Face­book.

“With 400,000 artists, not to men­tion gen­re­spe­cific sta­tions such as com­edy and sport, iHeartRa­dio re­ally is for ev­ery­one with an in­ter­net con­nec­tion or a smart­phone,” says Luey. And it also pro­vides another chan­nel for its ad­ver­tis­ers to reach their tar­get au­di­ences.

Even out­side the main net­works, dig­i­tal lis­ten­ers are be­ing recog­nised as an im­por­tant au­di­ence to cap­ture, es­pe­cially with a plethora of op­tions avail­able ev­ery­where from Spo­tify to Xbox. World TV’s Sam­son Yau says its Can­tonese and Man­darin lan­guage ra­dio sta­tions of­fer online stream­ing through its is­tars.co.nz site as well as iOS apps and an online ar­chive.

Ra­dio New Zealand has done the same, and chief ex­ec­u­tive Peter Ca­vanagh says the pub­lic broad­caster’s online ar­chive, cur­rently hous­ing around 130,000 items, is grow­ing at a rate of 25,000 au­dio items a year. In RNZ’s ex­pe­ri­ence at least, the growth in dig­i­tal lis­ten­ing hasn’t can­ni­balised its on-air au­di­ence, though Ca­vanagh said they had ex­pected to see a de­cline. “If any­thing it has grown,” he says. Dig­i­tal lis­ten­ing ser­vices have also proven use­ful in re­solv­ing the lack of mea­sure­ment and tar­get­ing of tra­di­tional ra­dio.

“With reg­is­tered users you have data and de­mo­graph­ics and there­fore you are cre­at­ing a new level of insight ra­dio hasn’t had so much of be­fore,” says Hast­ings. And if trends in the US are any­thing to go by, even more highly tar­geted and mea­sur­able ra­dio ad­ver­tis­ing is on its way. Ac­cord­ing to Ad­Week, sports broad­cast­ing gi­ant ESPN is in­tro­duc­ing “dy­namic cloud-based ad in­ser­tion” for its dig­i­tal streams. The tech­nol­ogy will tar­get lis­ten­ers “by de­vice, lo­ca­tion, age and gen­der in real time across live na­tional broad­casts,” a ca­pa­bil­ity that is oth­er­wise largely miss­ing from ra­dio. Mean­while, US ra­dio net­work Dial Global is at­tempt­ing to ad­dress in­ad­e­qua­cies in cam­paign mea­sure­ment through its SoundHound app, turn­ing mo­biles into com­pan­ion de­vices for ra­dio. SoundHound, sim­i­lar to home­grown sec­ond screen app Pluk, un­locks ac­cess to ex­clu­sive con­tent af­ter users are prompted to open it by on-air hosts or ads.

In case of emer­gency

The mar­ket is chang­ing, sure, and dig­i­tal lis­ten­ing is grow­ing. But none of it means that the im­por­tance of the AM/FM dial has di­min­ished. Quite the op­po­site, as ex­pe­ri­ences af­ter the Christchurch earth­quake— and Hur­ri­cane Sandy in the US— proved. In both cases, bat­tery op­er­ated ra­dios were not only es­sen­tial for in­for­ma­tion dis­sem­i­na­tion, but of­ten the only form of me­dia still ac­ces­si­ble af­ter hours and days with­out power. The RBA con­ducted re­search fol­low­ing the Christchurch earth­quake and found ra­dio was the first port of call for af­fected res­i­dents.

“Ra­dio was the most im­por­tant medium, cer­tainly in the im­me­di­ate af­ter­math and the pe­riod be­yond the quake,” says Fran­cis.

Ra­dio was re­lied upon to dis­trib­ute in­for­ma­tion, with 82 per­cent of re­spon­dents get­ting Civil De­fence in­for­ma­tion from the ra­dio com­pared to 16 per­cent get­ting it di­rectly from CD staff or web­sites. In writ­ing about the re­liance upon ra­dio af­ter Sandy, Ad Age mag­a­zine noted “ra­dio, the first elec­tronic mass me­dia, has be­come the only game in town.”

On the other hand, Ra­dio Ink re­ported wor­ry­ing news last year when auto in­dus­try rep­re­sen­ta­tives an­nounced at a con­fer­ence that AM/ FM would be elim­i­nated from the dash of two car com­pa­nies “within two years”. Gen­eral Mo­tors was quick to back off those claims, re­spond­ing in a state­ment: “To be clear, GM has no near term plans to elim­i­nate AM and FM from GM ve­hi­cles.” Volvo has re­cently launched an in­te­grated, voice and touch ac­ti­vated mu­sic sys­tem through a part­ner­ship with Spo­tify that is fully in­te­grated into the dash. In New Zealand, the ra­dio in­dus­try has sought—and re­ceived— as­sur­ances from auto mak­ers there are no plans to re­move ra­dio. But Hast­ings says in­dus­try adop­tion of dig­i­tal plat­forms helps fu­ture proof it against such an event.

Whether ra­dio sta­tions are con­nect­ing with au­di­ences on-air or online, Mul­grew says the in­dus­try is con­tin­u­ally look­ing to in­no­vate.

“There is cer­tainly no com­pla­cency around our need to evolve in the face of new tech­nolo­gies,” she says. “We have big, strong, loyal com­mu­ni­ties of lis­ten­ers who want to hear from us, so we need to en­sure we con­tinue to de­liver re­lat­able, en­gag­ing and en­ter­tain­ing con­tent across mul­ti­ple plat­forms with agility, mo­bil­ity—and for free.”

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