In a unique roundtable discussion with some of the top minds in radio, The Media gained rare insights into this sector. Peta Krost Maunder reports.
The participants were Kagiso Media’s executive director Omar Essack, Primedia Broadcasting chief operating officer Ryan Till, United Stations managing director Rivak Bunce, YFM chief executive officer Kanthan Pillay, Media Development and Diversity Agency programme director Nkopane Maphiri, Mediamark managing director Elton Ollerhead and Media Connection director Judy Milne.
One of the key issues facing radio today is how the fast-changing technology affects the medium and how each player has to find ways of keeping up and making it work for them.
Technology
The participants agreed that spending a great deal of money on specially enhanced sound is not a priority; neither is anything that would be an expense for consumers but wouldn’t necessarily be something listeners are looking for. They are eager to use technology that takes social media interaction further and enhances the engagement between radio and its audience.
The key for them all, says Till, is how scalable and robust the new technology is. “Is it responsive enough to the way audiences are becoming used to engaging with information, entertainment and media?”
But new technology is going to change the face of broadcast media in this country, with the introduction of digital audio broadcasting (DAB) and digital terrestrial television (DTT). A number of commercial South African radio stations are already testing DAB which, if implemented, will mean more regulated stations will become available via the digital spectrum. Around the world, more than 30 countries provide a form of digital audio broadcasting, either as permanent technology or test transmissions.
The implementation of DTT will mean radio stations would be available through the set-top box, so local stations will be available nationally. Up front, it doesn’t necessarily offer any additional stations.
Then, of course, there are online radio stations, which are totally unregulated and almost anyone can launch a station. It takes radio stations into a far more internationally competitive arena and is not a great option in South Africa at the moment because of limited bandwidth. Also, FM offers a far more robust option.
But exactly how each media owner is going to tackle the new arenas is not clear.
Till says that as an industry, they have to put their stations on the new digital spectrum because if they don’t, it will be given to others.
“This is a very important industry decision for us to tackle. Do we want to regulate that space and be a part of it, or do we leave it for someone else? I don’t even want to think of the latter,” he says.
“But what is the value, not just from a user’s but from a business perspective? Is it going to offer any different commercial value ultimately to advertisers, which will then allow us to offer more value? I am not convinced of that, but the spectrum must be used.”
Essack agrees. “We’ve got to figure out how to take advantage of it and commercialise it. It could be a drain, as it has been for UK radio, where they had 10 streams of frequency.”
Bunce’s concern is whether the industry can create enough content to take advantage of DAB. “We’ve been moaning about how limited radio is for years. From that point of view, this could be the game-changer, enabling many new radio stations.”
This highlights the complication of further media fragmentation. Ollerhead says, “From a consumer’s perspective, the choice can be a bit overwhelming. So, it is important for brands to leverage their loyalty with audiences and make the most of that.”
According to Bunce, so if the commercial radio leaders start up more stations for their brands, it will probably dilute their brands by needing to ensure they have sufficient content.
“Look at the UK: they ended up just running back-to-back music on the extra capacity channels they were given,” says Essack. “But the biggest issue was they couldn’t find the money to support the cost. And there is a serious cost to running seven or eight channels at the same frequency.”
Bunce says channels overseas dealt with this by using “prerecorded shows”, with limited success.
Maphiri believes the issue around content will be the key driver. “The challenge for radio stations is about the type of content we are going to put on these new platforms. DTT will redefine the landscape completely.
“And looking at it from a community radio perspective,” Maphiri says, “the answer could be redefining a particular area and providing a very local flavour to programming. What does this mean for the bigger radio stations? It will change the space for you too.”
Till maintains that the audio spectrum linked to the DTT will offer great opportunities to do more with existing radio stations.
“So, it is really progressive on a national basis for South African listeners to get access to more diverse content than what they have had access to before because terrestrial radio spectrum is so limited. We will really be able to offer more content.” For example, he says, it will mean taking regional stations national – because only SABC channels had national licences – and adding additional formats, languages or cultures to already available stations. To have only 16 cultural stations for a population of 50 million is very limited.
“And then, in the online space, obviously it is open to everyone as it is an unregulated space. There we will see the most interesting moves, but it is also the space where the most competition exists.”
The participants believe that having endless numbers of radio stations online will be both exciting and inhibiting for consumers. The latter because consumers enjoy the close relationship they have with the stations to which they are currently loyal.
“It is more quantitative than qualitative,” says Till. “It affects the time you spend listening to radio rather than the fact that you are listening.”
Essack suggests that what could work in terms of occupying these additional channels/platforms is subscription radio. That way they wouldn’t need to rely on advertising. “This would only work if you are putting on something extraordinary. The reason Howard Stern in New York gets the listeners is because he can get daily interviews with porn stars, which would never be allowed on normal radio…
“You could do extreme sensationalism, extreme politics – all of those things that we are currently limited in doing during the watershed period,” says Essack.
None of the participating media owners were willing to forgo that extra spectrum and agreed they would deal with the challenges of finding workable ways to use it.
“This could be the catalyst we need to create the talent and stop being so risk averse,” says Bunce. “Right now no one wants to rock the boat with the audience split between channels.“
IMAGE: L-R Rivak Bunce, Ryan Till, Nkopane Maphiri, Elton Ollerhead
Developing talent and content
Radio stations have been criticised for becoming formulaic and not having changed the way they do things in a decade. There is also a call for new voices.
“702 listeners like consistency,” Pillay says. “If you have a young audience like YFM does, they like change, they get bored easily. We change presenters regularly.”
Bunce says he believes youngsters don’t dream of being on radio like they used to and that radio – unlike new media – is not seen as “sexy” anymore.
However, Essack recalls that in the Sunday Times youth generation survey, one of the most desired jobs was a radio DJ. So, following that, Kagiso did “a foot in door promotion” to attract talent. “We were blown away by how many people turned up.”
Pillay and Maphiri say both YFM and the community stations have been serious breeding grounds for the talent on radio today.
Pillay says, “We’ve been recruiting for trainees every six months for years. We have 1.5 million listeners, so it is broad-based. We get a minimum of about 1 500 applications in the two-week window that we recruit online.
“Nearly all of Power FM’s news staff was trained in our training programme and a significant chunk of the young black talent at 702 came from us. And we need to keep churning them out.”
He disagrees that radio is seen as unsexy. “Everyone who walks in there just wants to be on air because it is seen as an incredibly sexy job,” says Pillay.
Maphiri agrees. “Community stations get a lot of fresh talent and it enables us to harness the newest, freshest and raw talent. We are always amazed at the abundance of talent at that level,” he says. “It may not be suitable for the higher commercial operations but community radio has positioned itself as a reservoir of talent.
“It is easy for the public and commercial broadcasters to pick and choose from these guys because they come almost ready made,” says Maphiri.
Essack says that aside from talent, the accusation that radio doesn’t change is incorrect. “All of us do a great deal of research on the temperature and tastes of our audiences. We ultimately reflect on air what our audiences are telling us. And, of course, there are segmented audiences so we aren’t going to play to every single person’s needs but we listen to what the audience wants and we give it to them,” says Essack.
Ollerhead believes there is constant feedback on social media, so if audiences aren’t happy, stations know and can change instantly. Also, he says, these days radio staff monitors every avenue of this constantly.
Bunce says it is unfortunate that Eugene Zwane, who heads up SABC radio sales, wasn’t able to attend the discussion. The national broadcaster plays an enormous role in the radio environment, and it faces other challenges within the constraints of the formats. The SABC has to do a lot that is not really related to what the audience wants but what the public broadcaster believes it needs, says Bunce. (See page 52.)
As for community radio, says Milne, there is great spontaneity and, really, no rules. “It is like a free for all,” she says. “A presenter does what he wants and even brings his own music to play. People walk into the studio and interact. Their programming is whatever suits them that day and they change it tomorrow.”
Essack maintains that while there is plenty of choice and it is growing, the individual stations audiences are doing well. “This must show that we are continuing to do things right.”
Advertising – cost and format
Some media agency folk claim radio ad rates are too expensive, even pricier than television. They say this is unacceptable because an audio spot cannot be more expensive than an audiovisual ad for television.
“This is a misconception,” says Bunce. “In fact, radio’s cost per thousand is too low.” Also, he says, that comparing this with television is a mistake, like “talking about a shotgun versus a rifle”.
He says that if the average planner looks at income, they are going to discover how valuable radio is. “If you look at the penetration of regional radio, where the markets are and where the money is being spent, you see how incredibly high radio is, with 94% of their balance compared to television, which is a shotgun spray approach.”
Bunce claims it “suits media agencies to create the impression that we out-price ourselves”. He explains that this is a problem in the industry at the moment because “their incentive is to try and commoditise us as much as possible – and negotiations basically start off at that point and using tactics like this is meant to make us insecure, so we buckle”.
Most participants agree media agencies compare radio rates to DStv rates, as opposed to SABC or e.tv, where each channel has far fewer viewers than any of their stations.
Says Till, “We would love to know what the viewership is of these smaller DStv channels, on which these great deals are being offered. These comparisons are not fair. Having said that, that’s competition! When we do introduce DAB on radio, and when there are more streaming channels over time, it would be interesting to see what happens to radio’s rates. Do you just group things together and offer one deal or do you start splitting them out? Does audio on DTT stop being offered as a separate product to advertisers? That will come with a lot more complexity of how to understand it and measure its response and see its effectiveness.”
Essack says it would be interesting to compare how much skipping of ads there is on DStv versus on radio. He believes “there is a lot of loyalty to radio stations by a significant number of consumers but no loyalty to TV channels, only to programmes”.
If media agencies are going to compare, they should compare free-to-air television with free-to-air radio, says Essack. “Not just in terms of pricing, but in terms of reach and the way people are consuming it. Also that way there are fewer options,” he says. In the “hyper-fragmented pay-television arena”, he believes the cost of advertising should be cheaper than radio “because the behaviour there is very fickle”.
Alternatively, the “engagement” of radio viewers is totally different. “Start measuring the engagement of consumers and it will surprise you,” says Essack. “Engagement is what gets results for advertisers. So, let’s start measuring that. With the whole fragmented television environment, engagement or attention levels shift downwards.”
Pillay believes it is very easy to measure engagement. “At any point you need to make a topic trend: we [YFM] can do that. It is immediately measurable feedback and advertisers love that because we can prove engagement.”
Till agrees, saying, “To fully cost radio and see its value, you have to add the social media and digital component. I think we are too stuck in the traditional way of measuring and valuating radio.”
The problem for Pillay is that there are different agency people selling radio and digital. “They have to be integrated, because that’s the way the world is going. However the agencies don’t get that yet.” So, when YFM has done huge successful events with massive advertisers, they have achieved this by bypassing the agencies and going directly to the clients.
Essack agrees. “It is a big problem when agencies say ‘time spent listening is going down’ and I keep saying ‘but time spent engaging is going up’.”
Another agency criticism is that commercial radio is moving away from spots on radio to activations and that radio is fast becoming an activation medium.
“I love that,” says Till. “I think that’s the best thing people could be saying about us because it’s a way to get results. Although the 30-second ads [spots] are still the predominance of our revenue, it can’t be all that we do. We are combining things that are measurable and live to get results.
“Because of that, you have this breathing thing that we are managing all the time and can change programming based on what’s happening on social media,” says Till. “And if the campaigns are not working, we can amend them. It’s not a bunch of pre-recorded things that you’re putting out.”
Essack says: “Agency people don’t have evidence to make that statement as bluntly as that. Yes, we are able to do these things, but it is way too early to say that the 30-second spot is dead.”
Bunce adds, “If you are face-to-face with an advertiser or ad agency and they ask for something particular that sticks out, they actually want activations.”
Having said that, Bunce points out that his company has been measuring number of activations versus spots for decades. They found that while the perception is that radio is doing so many activations, the ratio between the non-traditional marketing and the traditional 30-second ad has remained fairly constant.
“I think it is because radio has got so good at events and activations, and because our tools are so powerful that people see they get that much more value from them,” says Bunce.
“But for all that extra work and cost, are they willing to pay us for that?” asks Essack. “While agencies want all the bells and whistles, they were not so keen to pay for the extra costs. And sometimes the 30-second slot is still more effective.”
Bunce agrees. “That slot is your opportunity to say exactly what you want to say, beautifully crafted. Why would you give that up? People don’t: they love the 30-second slots.”
But there are other ways of marketing that are used on radio, some that are more obvious than others. Having the presenter clearly punting a product is one that some people find questionable. Says Till: “This is where the art comes in because we’re trying to create connections with the audience with the goal of providing advertisers with a place to speak to those people.
“You can craft things in a way that doesn’t destroy the value and emotional equity you have with the audience, but you can do it in a way that keeps everybody’s credibility at the right level. So I think some presenters and some shows can get away with more than others. You’ve got to tread that line very finely. It’s no different to any sponsorship. Like, would you let your news bulletin be sponsored? Radio does and TV doesn’t. Why? How do we get away with it and TV doesn’t? Would you let a TV news anchor do an endorsement, as opposed to a radio anchor? TV news can’t get away with it, a radio presenter can. Both TV and radio shows can be sponsored so there’s no science here.”
All the media owners admit to turning away advertising that doesn’t fit with their stations. Till explains, “We liken radio to a personal friendship. If you’re having a dinner party and all of a sudden something gets sponsored, the guests would think it was madness. The relationship with radio is that personal and we take it seriously and we won’t break that trust.”
Research
Following the resignation of the National Association of Broadcasters (NAB) from the South African Audience Research Foundation (Saarf) last year, there has been much debate within broadcasting about what research is necessary and how it would be done.
Till says there is a need to have research that covers the qualitative as well as quantitative relationship with radio, which certainly wasn’t covered by Saarf’s Rams. “We need to have more robust data that reflects the ability of an audience to be shifted and moved to change behaviour,” says Till. “There have been times when we operators have seriously questioned the validity of results that Rams (Radio Audience Measurement Survey) has shown.”
Till says that research has to change to fit in with the changing world in which radio finds itself. For example, radio is now listened to on multiple platforms and radio has a quality relationship with its listeners unlike any other media. Both these issues affect the kind or research needed.
“How is that measured and reflected in what advertisers use to plan? It isn’t because we have a really numbers-based and quantitative conversation about media,” says Till. “And we know there is this immeasurable qualitative relationship and it’s very hard to put it into something concrete where advertisers can agree that our cost per thousand is this, but qualitative measures put radio at a different level.”
Till and Bunce say that they are not alone in believing that radio is underpriced, not least of all because this medium has the inherent ability to mobilise people and shift purchasing behaviour, loyalty and responsiveness.
But the media owner participants feel that despite all the money they put into their own research, their findings are seen as ‘propaganda’ or not independent enough. So, they agree, there is a need to do this research both individually and collectively.
Bunce spoke of NAB leaving Saarf as being “a moment for radio because we have done it now and have to look at what’s replacing it, bringing all our divergent needs”.
He says that the “worrying thing is it is now back to our divergent needs and while we want something for radio, we also want something for our stations, which are so different.”
Essack says this is the role of the Radio Advertising Bureau (RAB), of which Till is board chairman.
Till says there is already a radio research brief out. “We did our repositioning project last year at the RAB, with this whole real personal connection that radio has with its users and the value for advertisers. It is a challenge for research companies, something that they are facing in every industry.
“We want to break the mould of how we do this because research is expensive,” he says. Till dissuades people from projecting how the new Rams will look because of this need for “quantitative research with the qualitative layering of information” and to secure the 13% of ad revenue that radio already has.
Essack cautions, “It is very important to understand what the marketers want because that is our lifeblood.” He says marketers often ask him for evidence as to why he is charging them a higher loading for a live reading [by presenter] versus a [prerecorded independent] spot. “I can’t answer that question because I don’t have independent research on it,” he says.
Ollerhead believes it is important that the research looks at the different measurements of the various media channels and platforms to be able to compare the different media. “Then does digital become a part of the survey and how does it affect the 13% share?” Ollerhead asks. “I think if we’re not able to provide the comparison to the planners and buyers, then we’ve got some sort of disconnect where we’ll be fighting against some other means of evaluation.”
Till disagrees, insisting the idea that agencies need to have a common research methodology across all media to be comparable is “inherently flawed”.
“It reduces it to the lowest common denominator of something that can be measured, which is basically: Are you using it? So, do you go to cinema? Do you see an outdoor? Do you read newspapers? Do you know watch TV? Of what value is that?” he says.
“We need to find a way to evolve that goes ‘here is a measurement that is specific to digital as a value’, and the same for radio. We’ve got a different basket of values to television, to outdoor,” says Till.
He explains that it is also extremely expensive to have this common denominator across the industry. “I understand the value of it, but I’m questioning whether it actually helps anybody or just starts to confuse the whole issue and reduce everything to just an exposure of measure of some form. We disserve ourselves because agencies want it, and ultimately the client ends up getting a measure that has very little value.
Essack agrees, asking how to get the advantage or the benefit of the strength of radio’s engagement. “We’re adding so much more value in terms of audience engagement and are we still getting paid for the stuff people can see, a measurement around radio,” Essack says.
IMAGE: Judy Milne, Omar Essack and Kanthan Pillay
This story was first published in the May 2014 issue of The Media magazine in a special supplement on radio.
