MacKenzie ignores industry’s signals

Kelvin Mackenzie has launched his own system of collecting radio listener data. But what use is a non-industry-standard system? asks Caroline Parry

Kelvin MacKenzie, the enfant terrible of the radio industry, lived up to his reputation last week by shaking up the business with the launch of the first electronic audience measurement system.

MacKenzie, who is chairman and chief executive of TalkSport owner the Wireless Group, says he is forced to launch a rival survey using electronic meters because he believes the current method, where listeners manually record their radio habits, underestimates radio audiences.

UK radio listenership body Rajar acknowledges the issue and has been testing two electronic meters, a watch and a pager, for 15 months. Its current contract with Ipsos RSL expires at the end of next year. But while MacKenzie’s impatience with the slow progress of Rajar’s tests has struck a chord with the industry, many feel his decision to go it alone creates an unnecessary rift in the sector.

MacKenzie has sympathisers, but they believe the industry should be working together on the issue. MindShare’s head of radio, Howard Bareham, says: “Rajar is not 100 per cent accurate and we do need to move forward to another system. The problem MacKenzie has is that it is not happening fast enough for him.”

The Wireless Group’s national survey will start on March 3 and will publish results for TalkSport, Classic FM, Virgin and the five national analogue BBC stations every month from June. It will publish monthly figures for the London stations from September. It has signed a three-year fieldwork deal with market research company GfK, owner of Swiss company Radiocontrol, which has developed the wristwatch technology.

The launch of the system follows two three-month-long tests carried out by the Wireless Group last year in six towns, using two samples of 650 people. It chose to test the wristwatch because the pager would require the co-operation of the other broadcasters, which it does not have.

MacKenzie claims his tests show that people listened to more radio stations than they wrote down in the diary and that 30 per cent of all uninterrupted listening was for periods of under five minutes, which is not counted by Rajar.

There are widely acknowledged problems with the diary system, which relies on people remembering to fill them in and to fill in the right station. Heavyweight advertising campaigns can affect listeners’ recollections of stations.

Although the benefits of electronic data collection have been highlighted, there are concerns over whether people will want to wear a watch or a pager. The Arbitron pager system, which works by picking up encoded data, requires a panel to make it work. Rajar does not have experience of running a panel.

Rajar managing director Jane O’Hara says she understands MacKenzie’s impatience but adds that the testing, which will finish in the next four to five weeks, must be completed before moving on.

The Wireless Group believes the new data will show an increased reach that, in turn, will bring new advertisers and generate extra revenue. But it must also pay a rumoured &£2m over three years for the system and media buyers are not going to trade with the research.

MindShare’s Bareham points out: “If they want us to trade on the new audience measurement, everyone has to buy into it, not just a speech radio station.” MacKenzie insists he never said he would trade on the results. It is probably for this reason that he says the group will remain in Rajar for the foreseeable, but not indefinite, future.

He claims advertisers are backing his moves, but will not give names. “Perhaps the pressure will come from the client side, rather than the industry. The radio industry is a small spend as far as buyers are concerned and, at the moment, they can’t see anything in it for them.”

MacKenzie aims to persuade advertisers and other radio groups to take the information seriously. A radio industry insider points out that while the Capital Radio Group and EMAP stations are not included, it will be hard to convince potentially interested parties that the information is robust enough to be used.

The industry may be sticking with Rajar at the moment, but it is clear that others are impatient. Lisa Woodfin, media analyst at RW Baird, adds: “Rajar needs to speed up this process – otherwise MacKenzie is going to continue with this crusade, and that doesn’t do anyone any favours.”

The next landmark will be the Wireless Group’s first set of results. MacKenzie’s biggest critics claim his actions have more to do with impressing the City than pleasing advertisers.

One insider says: “Every time he does anything, he calls a meeting in the City. This is purely for the benefit of his shareholders to show he is doing something.”

Other people believe that rather than concentrating on radio audience research as a separate issue, all media owners should be working together to introduce joint electronic measurement across all media, starting with TV and radio. Insiders claim there is every reason for radio and television to work together, especially as introducing electronic audience measurement would cost the radio industry &£26m – a hefty sum considering that as a collective, commercial radio makes about &£80m a year in profits.

The shape of the radio industry is going to change over the coming year as the introduction of the Communications Bill and digital radio take effect. These changes could render all the current testing pointless and are likely to reinforce the need for a merged audience measurement system.

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