Perhaps we should cut out the clutter, rather than through it

As advertising rates have been driven down, media owners have responded by selling more – but some are now finding that restricting supply can work wonders, says Don Thomson

The media environment has changed dramatically in the past 20 years. In 1985, there were two commercial television channels in the UK and fewer than 50 commercial radio stations, while the internet was unheard of except in academic circles. Media planning must have been a breeze. Advertising minutage was strictly controlled. ITV and Channel 4 could only transmit about six or seven minutes of advertisements an hour and radio was limited to nine minutes.

Since then, mainstream media has fragmented enormously. There are hundreds of TV channels and the number of commercial radio stations available in the UK has more than doubled in the past 15 years. Newspapers, particularly at the weekend, are now so big and so full of advertising and promotional material that paperboys need trolleys to deliver them.

Over that 20 years, advertising revenue growth has been generally buoyant, but the majority of this growth is the result of media owners producing ever more advertising. Consumers are exposed to more messages in every medium, but do they take any more notice? Is there any evidence to prove that by increasing the amount of advertising you carry on your channel, you increase readership, listenership or viewing? I don’t think so – the exception being classified ads in a newspaper.

In recent months, a number of media owners have begun to swim against the tide. Radio Nova, a recently launched radio station in Australia, has a key unique selling-point for both advertisers and listeners: it broadcasts less than half the commercial inventory of its competitors. It guarantees to transmit no more than two ads in a break – unique in Australia, if not the world.

Radio Nova rapidly made a significant impact in the markets in which it operated, so does the number of ads in a break affect recall?

Research carried out on behalf of Radio Nova by the University of South Australia showed that total ad recall was 2.6 times stronger for Radio Nova than for its rival stations in Sydney and Melbourne, and that unprompted recall for the ads researched was 2.3 times stronger.

At the beginning of this year, Clear Channel in the US announced that it was reducing the amount of advertising on its radio stations across the country. Clear Channel owns about 1,000 stations in the US, so this was a big step. It had been facing significant audience declines, and felt this could be part of the solution to its problem.

In August, Clear Channel announced that second-quarter revenues were down seven per cent, after a 27 per cent cut in advertising inventory, so in the short term the move has hit profits. However, the gain will come in the medium term: the latest audience research has showed “time spent listening” has risen by 14.5 per cent at its top 25 stations. If this trend continues, it doesn’t take a genius to work out that Clear Channel will recover its short-term losses quickly by improved revenues, thanks to greater listening.

Smooth FM recently announced it was reducing the number of ads it transmits in a bid to make itself more attractive to advertisers and listeners alike. Time will tell whether this will have a dramatic effect on audience growth. I suspect it will.

In many respects, the events outlined above have been driven by media fragmentation, and the effect this has had on the competitive mindset. However, while media fragmentation has been accelerating rapidly, on the client and agency side mergers and acquisitions have been happening across the globe, causing a significant shift in the balance of power in the media agency-media owner relationship.

With the globalisation of major advertising clients and agencies progressing at a rapid rate, the call from clients when reviewing media is often: “Can you do it cheaper?” There have been numerous instances in recent months where it has appeared to be the main criterion for review and change.

But has fragmentation in the media and the increasing power of buyers led to advertising becoming less effective because of the more cluttered environment in which those messages appear?

When agencies promise to buy media for “x per cent cheaper”, that generally results in weaker media owners selling more cheaply, or not getting the business at all. How do media owners pay for this? They print or broadcast more advertising. If you buy the principle that advertising in a very cluttered environment is less effective than advertising in an uncluttered one, then isn’t “more cheaply” just a false economy?

In the headlong rush to deliver cheaper advertising we have forgotten about effective advertising. Either that, or we get confused between the two.

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