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?

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.”