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How the commercial radio industry is future proofing itself

This week has seen the quarterly Rajar results unveiled and with them, plenty of positive stories. With the media industry continuing to go through rapid change, and advertisers increasingly looking for new ways to reach target consumer groups, radio has had to adapt.

Krissie Ford

It’s clearly working, with radio listening continuing to grow. On the commercial side, not only is listening up, but the latest AA and Warc Expenditure Report predicted an increase of 4.3 per cent in 2015 for radio ad spend. According to Ofcom’s latest Communications Market Report, commercial radio revenue increased by £22m to £483m between 2013 and 2014 and commercial radio revenue per listener increased by 5.9 per cent to £14.14 last year. Commercial radio also saw stronger increases than the BBC set, with increases both yoy and qoq, and has increased its share of listening against the BBC to 44.4 per cent.

Digital radio listening has been and continues to be a big part of this. This set of Rajar figures show that digital radio listening is at an all-time high with reach up by 7.1 per cent yoy. For commercial radio only, this increases to an 8 per cent rise yoy. The launch of the second commercial radio DAB multiplex (D2) early next year from us at Bauer Media, Arqiva and UKTV will see the UK radio industry grow further, expanding the variety of radio brands on offer to consumers.

Aside from allowing consumers to connect with more radio brands more easily, across a range of platforms, digital radio listening also opens up a wealth of opportunities for advertisers. Did you realise, for example, that digital radio listeners are 20 per cent more likely to notice adverts on the radio than the average UK adult (TGI Q3:15)? Or that they tend to be younger, with 32 per cent under 35, and are more likely to belong to the ABC1 category, with 61 per cent part of that group (Rajar W2:15)?

It’s great news that 39.9 per cent of UK radio listening is now done via a digital device (for Bauer Media listening this rises to 53.3 per cent) – of this, DAB is the most popular, accounting for 67 per cent of all digital hours, but online listening has increased to 16 per cent of that total. The top two commercial digital stations, Absolute Radio 80s and Kisstory, have also both posted record reach.

The growth in digital listening, especially connected digital listening, is all good news for advertisers. Technology such as InStream, which was developed by Absolute Radio and enables listeners to be targeted much more specifically, offers the opportunity to increase engagement. Another example of this innovation is Absolute Radio’s ‘One breakfast show, seven playlists’ initiative, where in a world first, audiences can choose to listen to songs from across the entire Absolute Radio portfolio during The Christian O’Connell Breakfast Show.

Also key to the future of radio is engaging with the millennial audience group, which is predicted to grow to 17m by 2019. Our research ‘Bauer Knowledge: The Millennials Chapter’, showed that millennials use radio as a mood changer and Rajar data shows that 45 per cent of 15 – 24 year olds receive social updates from their favourite radio brand, demonstrating high engagement. The fact that 36 per cent of 15-24 year olds listen to the radio via a mobile phone or tablet at least once per month shows that younger generations are still looking to radio, even if they are consuming it in different ways. We see this with KISS, where in London more 15 – 24 year olds and 15 – 34 year olds tune in than to any other station in London.

Extending out flagship radio brands has been another strategy used to increase the reach of radio in the UK. We’ve seen successful brand extensions from KISS, where both Kisstory and Kiss Fresh have seen real success, plus Absolute Radio, where the entire portfolio of stations including Absolute Radio 70s and 90s, Absolute 80s and Classic Rock have all grown audiences in their own right. It’s these brand extensions which have driven record results for the KISS, Absolute and Magic radio networks overall and ensures that audiences keep coming back to their favourite brands.

The way that advertisers are using radio is changing too. More and more, they are recognising that radio is a very effective medium for branded content. At this year’s Arqiva Awards, both the Gold and Silver National Sales Awards went to content outside of the traditional radio ad – Gold to GoThinkBig, an initiative between Bauer and O2, and Silver to Just For Men’s Masters of Man Time project with Absolute Radio. This weekly one hour slot was the second ad-funded programme for Just For Men on the station, showing the success of these campaigns being recognised by brands.

Radio has faced its challenges over recent years, as have all mediums, but it continues to go from strength to strength. There is exciting innovation happening to build on the already growing number of engaged listeners in the UK and we look forward to working with advertisers and agencies on how to utilise the new technology and commercial opportunities.

Krissie Ford is client sales director at Bauer Media

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