Keeping marketers tuned into radio

In the first of a new series exploring the effectiveness of media channels, we explore radio, its strengths and the challenges it faces and what it needs to do to increase its appeal to marketers.

On the face of it, radio seems to be in rude health, reaching millions of adults every week. Yet it is dogged by a belief among some advertisers and their agencies that it is less exciting and creative than other channels, and not a brand building platform. There is also a perception among some that it can only be used for promotional activity.

While Nielsen figures show that the Government and companies like British Gas and Asda do spend big on the medium, some of the UK’s biggest advertisers such as Procter & Gamble and Unilever are not spending anywhere near as much as they do on other media channels and do not make Nielsen’s top 10.

The Radiocentre, the trade body for commercial radio in the UK, has acknowledged there is a job to do when it comes to radio’s image among some advertisers. It has launched a campaign directly targeting marketing bosses including Unilever’s CMO Keith Weed and John Lewis’ chief customer officer Craig Inglis, in a bid to convince them to reconsider the medium. Both organisations have invested heavily in brand building on TV and digital, yet radio does not seem a priority.

At the very least, Radiocentre hopes it will get marketers to think again about the role of media, and even lead to a few conversations with their media agencies. Lucky Generals co-founder Andy Nairn, who worked with the Radiocentre on the campaign, said while speaking at the Radiocentre’s annual conference earlier this year: “There’s a general feeling that radio advertising is not quite as exciting as all the other [media] out there.

“[Marketers] tend to diminish the role that radio advertising can play.”

Andy Nairn, co-founder, Lucky Generals

“They tend to talk about it as a tactical, small-scale, promotional medium, rather than something much bigger that we think it can be – much more creative, much more fame-building, much more exciting.”

The Radiocentre, however, is able to tell a positive story. Rajar listening figures for February this year show that weekly commercial radio audiences in the UK have overtaken the BBC for the first time in 15 years. The combined reach of commercial stations was 35.1 million, compared to the BBC’s 34.9 million.

That said, time spent listening to the BBC is still greater than for commercial broadcasters. BBC stations account for a 53.5% market share of listening hours compared to 44.1% for commercial radio.

Yet commercial radio still reaches 89% of UK adults every week (equal to 48.2 million people) – the same as in 1999. It also seems to be reaching coveted youthful audiences, with 2016 Rajar figures showing that 77% of 15 to 24-year olds and 72% of 25 to 44 year-olds tune in every week. Meanwhile, the BBC reaches 35% of 15 to 24-year-olds and 59% of 25 to 44-year-olds.

Total ad spend on radio has steadily risen since dropping during the recession in 2009 to £505.5m. According to Advertising Association and Warc figures, total ad spend on radio grew 2.9% to £591.5m in 2015, with overall UK ad spend increasing by 7.5% to £20.1bn. The Radiocentre predicts that radio will grow 4.3% year-on-year for 2016.

In terms of effectiveness, radio does not disappoint either. The Radio Advertising Bureau, which has since been rebranded as The Radiocentre, found in its 2013 ROI Multiplier study that, after TV, radio has the highest ROI of any media. For every £1 invested by advertisers, radio returns £7.70, it claims.

Yet challenges remain. One of the biggest lies in convincing digital natives who work at media and ad agencies in particular that radio has a part to play in their client’s media mix. There is also suspicion that there is a tendancy among agencies to chase the flashing lights and speak to their clients about new innovative platforms rather than the traditional ones.

“It is hard to keep radio sounding exciting in comparison to some of the new [mediums]. While brands using [these new platforms] can seem very clever, they’re reaching hardly anybody or not the people that matter to the brand,” says James Cridland, managing director of media.info, which focuses on the latest developments in radio, TV, newspapers and magazines.

leonie stat

Using radio differently

While some brands choose radio to shout about their latest sales promotions, home improvement retailer Wickes uses the medium for brand building and customer engagement.

It is currently in its fifth year of a partnership with Absolute Radio, where it sponsors the station’s Christian O’Connell breakfast show and embeds Wickes messages into the fabric of the show’s editorial.

For example, to celebrate a Wickes deal on self assemble benches, the radio brand created the ‘Wickes Shelf Help Group’. It asked listeners to share their DIY nightmares by submitting a photo of their small DIY issues, and every Friday called two of the best on air to battle it out to win a Wickes voucher.

Matthew Gaunt, head of brand and communications at Wickes, says radio has offered the brand “high reach” and consumer engagement, as well as brand awareness when used as part of a wider mix.

“We’ve done some studies recently that show how through sponsorship we’ve improved our brand image. Radio drives our retail [business], it’s targeted and it helps build our brand”

“There’s not much you can do in a traditional spot in radio in terms of brand building, but sponsorships have improved brand perceptions among the British public.”

Matthew Gaunt, head of brand and communications, Wickes

“We’ve done lots of testing, which is why brand spend in radio is increasing. This is driven partly by having a better understanding of what’s working and what’s not. We’ve also started to look at how radio works with a TV campaign and how it works with digital campaigns, which has given us the confidence to do more.”

Competing for listeners’ time

While radio has managed to maintain its high reach, the number of hours the average person listens to the medium has dipped. In 1999 the average person listened to 21 hours of radio a week. Come 2016, this figure has dropped to 18.8 hours. Meanwhile, streaming brands like Spotify and radio offerings by Google and Apple are increasingly competing for consumers’ time.

The Radiocentre, however, believes tech challengers fulfil different needs for consumers and are therefore not direct competitors. It ran a research project two years ago to understand how people consume different types of audio, including radio, online video clips, streaming services and podcasts.

Through that research, it identified six different “need states”. While services like Spotify ‘help people escape’ and ‘amplify the moment’, radio met four other need states, including ‘lifting someone’s mood’, ‘broadening horizons’, ‘providing social currency’ and ‘keeping someone in the loop’.

“Digital services and radio play complementary roles for listeners,” says Mark Barber, planning director at the Radiocentre. “While some people might think they compete, on the whole they serve different needs.”

leonie stat2

Radio must make the most of its strengths

Yet commercial radio is also looking at ways to integrate digital into its offering. Stations including Absolute offer a hybrid between live linear radio and the opportunity to access more of the music that someone wants to listen to digitally, giving both the station and the user some control over what is played.

Commercial radio brands are also playing to their strengths by signing up big personalities from outside radio such as Emma Bunton and Vernon Kay, and placing a bigger focus on content.

“There are so many more ways of making the most out of the content radio produces and owns. It’s about understanding that radio is far more than just a musical jukebox. It’s all about the human connection and the shared experience.”

James Cridland, managing director, media.info

However, Mike Gordon, chief commercial officer at Global, believes radio brands must go one step further and become a “360 platform” to succeed.

“We have moved away from being a traditional radio business towards becoming a music entertainment group. We now focus on four key pillars, including broadcast, social, mobile and live events. We have evolved into a 360 platform,” he explains.

Radio brands also need to forge closer relationships with advertisers – an opportunity that the medium is well placed to take advantage of, says Wickes’ Gaunt.

“If you look at TV buying, there are so many layers behind it – there is a buying team and a broadcast team, which means as a brand you’re too far away to influence what happens. You’re just assigned certain slots and that’s it. For radio, if you can learn to engage advertisers and get them involved in the talent and programmes to create more native content, that has to be a rich area [of opportunities] as well.”

Radio_campaign_LR

Putting tech at the heart of the medium

There has been movement within the industry to keep up with digital developments by putting a heavier focus on programmatic when it comes to selling ad space. In the summer of 2014, Global, the UK’s biggest commercial radio operator, launched advertising platform DAX to provide advertisers with a single buying point across 180 digital audio brands, including rival commercial radio company Bauer Media, as well as Spotify and Blinkbox.

Meanwhile, the UK Radio Trading Desk launched in May this year. It offers an automated platform aimed at making it easier for advertisers and broadcasters to buy and sell radio advertising online.

Global’s Gordon says the DAX platform aims to provide a “solution to the problem” of listeners steadily moving towards streaming services.

“Music consumption is moving from ownership to access – you no longer need to buy CDs, you can simply get access through multiple streaming services. A lot of this [digital radio listening] is done through mobile, yet no one was actually advertising on it. So DAX plays an important role in terms of growth on top of ‘traditional’ radio money,” he says.

Another radio group trying to stay abreast of digital developments is Bauer Media. Earlier this month it extended its audio advertising ‘InStream+’ technology, which provides premium content to listeners in return for personal data including their name, gender, location and age, across more of its radio brands. The move follows a trial, that saw more than 50% of its listeners logging in.

So far, Jaguar UK has used the platform’s geo-targeting to reach specific demographics to book test drives at local dealerships, while Vue Cinemas used the technology to drive ticket sales for the James Bond film Spectre.

“Consumers are increasingly turning ad blockers on, so this is a way for us as a business to understand how we can make advertising more personalised and how to work with clients and brands to make it relevant for consumers,” Abby Carvosso, group managing director of Bauer Advertising, says.

The new technology allows Bauer’s brands to overcome another common challenge that radio faces – a lack of visuals. While FMCG brands, telecoms and media are relatively big spenders when it comes to radio advertising, sectors such as clothing and accessories prefer to invest their money in more visual mediums.

“The technology allows for video content, which lets us work with other clients that tend to be underrepresented, such as the beauty market and fashion related retailers. Especially for younger audiences who are consuming radio content on their mobile, there is definitely an opportunity there to drive them in store,” she says.

While radio might not be as exciting as Snapchat or as creative as Instagram to some advertisers, it has reach, scale and the kind of audience figures most mediums would die for. For it to continue to grow in the face of rising competition for consumers’ time comes down to it taking a bolder stance and educating advertisers and agencies of its worth and potential.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here