The year ahead for radio: this 'dead medium' has never been so alive

The year ahead for radio: this 'dead medium' has never been so alive

The grand old medium is expanding and evolving as it turns the threat of digital audio into opportunity.

The radio and audio sector starts 2017 in vibrant health after a year of investment, growth and development.

News Corp’s takeover of Wireless Group, owner of talkSPORT, and Bauer’s acquisition of the Orion network in May, after much speculation, showed that media owners are willing to invest in the radio sector.

The launch of the second national commercial radio DAB multiplex, D2, with new stations such as Magic Mellow, talkSPORT 2 and the relaunch of Virgin Radio, was a further encouraging sign.

There was a strong end to the year, with Global Radio having its biggest month of revenue ever in November.

Digital audio’s reach continues to grow and is now in excess of 22 million adults each week. This is mainly being driven by mobile, with an astonishing 19% of all UK app time being spent with audio apps.

Radio and digital audio both increased revenues last year and, such is digital audio’s scale, we are now working in a "two-tier market".

Looking ahead to 2017, there is always the chance that a few independent radio stations will change hands, but News Corp’s acquisition of Wireless Group looks to have been the big game-changer in terms of consolidation.

Once Rupert Murdoch’s newspaper group gets a better understanding of how the audio market operates, I expect to see developments in terms of cross-fertilisation between brands much in the same way as the BBC operates. It makes sense for talkSPORT to cross-promote The Sun online and for Unruly to build up talkSPORT’s social presence against new kids such as The Lad Bible.

The expertise, resource and access to editorial and current affairs News Corp has will be integral to a live broadcaster.

The growth of digital audio products and streaming services has not had the "death of radio" effect that has often been mooted. But we have seen a decline, unsurprisingly, among 16- to 24-year-olds in radio as they transition to audio listening. That is understandable given the growth of digital audio platforms and services in line with wider advances in technology.

However, radio is still the medium with the greatest reach at breakfast time in the UK, accounting for 21% of time spent on media on an average day, with more than 89% of all adults tuning in each week.

Recent numbers show that while digital audio figures are growing, this isn’t detracting from time spent with traditional radio. Rather it is time spent with owned music – such as people listening to CDs – that has been declining.

Digital audio is a new opportunity to reach a consumer at a time when the interaction can be personalised.

Agencies have two ways of making this work: either roll digital audio into separate digital teams or, as we are doing at Media-Com, look at audio as a whole medium within a broadcast unit. This also reflects how many brands are moving forward.

If you have a mobile and video strategy, then why shouldn’t you have an audio strategy too? Indeed, Facebook, which has invested heavily in video, launched Facebook Audio as a standalone proposition just as 2016 was closing.

We should look to the US, which has led the way in creating a new audio  marketplace that trades differently from radio. The Trade Desk, one of the major demand-side platforms, estimates that, within the next two years, 15% of digital budgets will be spent in digital audio. That is something we as an industry should be working towards in the UK.

Global’s Dax has been a pioneer in digital audio trading in a number of ways.

Data has been an important area of innovation, with Dax signing agreements with other media owners to use their data. The first partnership of its kind was with Haymarket, publisher of Campaign, which allowed Dax to use its best-in-market "auto intenders" data. MediaCom ran the first campaign in the UK to use this data and the results we received back were strong.

With more sectors on board, I’m confident this will be an area both brands and agencies actively embrace.

Dax has also been developing tracking technology in the past year with the advent of "Listener Insight ID". This allows us to track users "post-listen" – after they’ve listened to a piece of audio – to see if they visit a certain brand’s site.

This will be invaluable data for our clients and for the medium to gain new brands and generate repeat spend.

Synchronising traditional radio with out-of-home media is another promising area. 

A brand can give its OOH media plan to Dax and it will "geo-fence" audio content to target areas such as cinemas, restaurants and shops in a certain geographic location.

We will see a higher proportion of media spend allocated to digital audio in 2017, without simply cannibalising radio budgets.

There are lots of ways to target by device at different times of the day. For example, while listening to radio peaks in the morning, desktop and laptop have the greatest share during the late morning and early afternoon, and mobile and tablet are the most important channels in the early evening.

The audio business is also diversifying. Radio stations have always been successful at hosting their own live events, such as Bauer’s Magic of Christmas and the Capital Summertime and Jingle Bell Balls.

Global has created a live division after acquiring the rights to six festivals including SW4, Field Day and Broadmasters. Global has also increased its stake in Broadwick Live, which looks after events such as Snowbombing.

Bauer has adopted a different acquisition strategy focused on growing its radio group footprint geographically across the UK, Europe and beyond.

While the UK radio marketplace will continue to trade on Rajar’s share of hours, cost per thousands and partnerships, all three major radio groups are now looking in separate directions to diversify their businesses and find new revenue streams.

Never has a "dead medium" been so alive.

Lauren Croly is the head of audio investment at MediaCom London

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