Radio has defied Newton’s Third Law by meeting every action with an unequal, and often incorporating reaction. Those who predict its demise have been proved wrong time and again as the medium continues to thrive.
Newton’s Third Law states that “for every action, there is an equal and opposite reaction”. Over the years there have been many predictions of the demise of radio. These predictions are premised on the latest and newest technology innovation that will disintermediate radio and impact on the audience, the revenues, and ultimately on the business of radio. Yet every time that this has happened, radio has risen to the challenge, adopting the best elements of the new technology and/or innovation, and showing continual growth. Radio has defied Newton’s Third Law by meeting every action with an unequal, and often incorporating reaction.
While some other media genres are seeing declining revenues, radio is still growing, if not holding steady, in most markets around the world. In Australia in particular, regional radio, is still growing in revenue. The primary factor propelling this growth is the fact that radio is increasingly being used in conjunction with digital, thus making the messaging from radio more “sticky”. There are other reasons that I will come to a little later in this article.
For the listener, regional radio keeps them in touch with what is going on in their environment, with a degree of ‘relate to-able’ content that is contextual to their lifestyles. As long as programming remains relevant and compelling, the listener maintains a relationship with the station and the station retains audience loyalty. The ultimate goal of radio programmers and marketers is to build an intensely intimate relationship with the listener so that the listener feels a degree of emotional ownership of the station to the point that they refer to the station as ‘My Station’. Commercial Radio Australia captured this essence very well in a radio marketing campaign where they came up with the catch line: “When you hear it on radio, you hear it from a friend.”
In 1987, I spoke at a Student Radio conference and I came up with a mnemonic regarding radio that is as relevant today as it was then:
R – Real time
A – Audio
D – Decision
I – Influencing
O – Opportunity
From a programmer’s perspective the decision-flow is as follows: the on/off switch; the volume control; the channel setting; and then a vacillation between the volume control and the channel selection. Thus the challenge for programmers is to ensure that the listener stays tuned to his/her station for as long as possible. This is why campaigns like the Liberty Radio Awards are so important; they keep stations focused on making increasingly-compelling content with the ultimate beneficiary being the listener.
But let’s give this some thought from a marketer’s perspective. “I love XYZ FM because they play great ads” said no-one ever. You’re buying air-time to reach prospective customers, and you need to ensure that your message stands out amongst the plethora of messages that the listener is exposed to (some would say bombarded with) on a daily basis.
This is where you should look to bring digital into the mix – so that your spot/campaign can combine with digital to amplify the effect of your messaging. Feedback gathered through digital interaction will give unique insights into the efficacy of your advertising, as well as the profile of the station’s listeners. There are some new audience engagement tools – which can be used by both radio stations and marketers alike – to develop a far more granular view of who is listening. Data should become your new best friend – after all, it will help you to develop and identify new customer insights to improve what you are doing to support the business.
Radio stations need to become more ‘digital’ in nature to engage their listeners. This will mean effectively looking to become more of a tech-data play, however this will require a whole new range of skills able to exploit and interpret the data to the benefit of the station and the marketer.
Technology, which has evolved over the last 25 years, has moved the entire industry from being analogue in nature – to being digital. There is a wealth of information and checking on- and verifying- broadcast of material in the name of compliance is now a standard. Corporate governance dictates more detailed and accurate reporting and marketers are being held increasingly accountable for their performance within the business. Marketers are increasingly using technology to ensure that they are getting what they have booked, and paying for what they got. Stations are going to have to ensure that they optimise their systems to ensure accuracy and to retain business.
I was recently shown a report on a particular large client’s campaign in which the broadcaster only played 40% of the spots accurately as per the booking schedule and contract. This didn’t stop the broadcaster in question from billing for the full 100% of the campaign, as they had no controls to advise that the spots were either not being broadcast, or being broadcast in the wrong time slots. Now imagine a marketer who has planned a campaign and who expects a certain ROI on the campaign, puzzling over the reasons for the campaign to not have performed according to plan. It could be his/her job on the line for this, and the radio industry really needs to smarten up and ensure that clients get what they book.
Ads sold aggressively
In the USA, radio advertising is sold far more aggressively, with only a few stations attracting business through national advertisers. This means that stations are selling directly, and within their regions. Whilst this is a more expensive business model (staff costs); and while it carries increased risks of defaulting debtors, local advertising acts as a very good hedge against media agencies who tend to follow particular patterns in their buying habits.
There are some regional commercial stations in South Africa who are doing excellent work in selling regional advertising and servicing clients in their locale. Community radio could do much better through focusing on regional sales within their community as opposed to aiming to get business from multi-national brands.
In the USA, on-air personalities are often incentivised for bringing advertising sales to the station, and in particular to their own show. I know of a certain community station in SA that is doing exceptionally well with this model.
In the past, I have written about the new BRC RAM data and now that there has been a full year of data gathered, it will be interesting to see the trend lines for various stations. My only caveat with regard to this data is that it is quantitative and not qualitative and marketers have to be cautious when using this as the only guide to decisions.
I believe that it is up to stations to embrace technology and to give a far more granular view of their listeners to prospective advertisers. They need to work closer with clients to develop integrated campaigns that give excellent ROI and that keep radio at the forefront of media choices. And, of course, it is up to the stations to make compelling excellent programming – that will keep the listeners locked onto the station.
Lance Rothschild is the CEO of the Liberty Radio Awards.