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Radio Broadcasters Feel Ad Pain, Beg For PatiencePockets of turbulence strike every business segment from time to time. Advertising is very sensitive to macroeconomics; consumer spending related to overall confidence. Other factors have upset the advertising business model, digital transition a difficult adjustment. The printed media has been, largely, devastated and traditional TV is getting nervous. Two parts of the media sphere have resisted this: radio broadcasting and outdoor. Now, radio is getting a case of nerves.Radio ad revenues dropped in Australia’s major cities for the September quarter, according to industry data released last week (October 14. Commercial Radio Australia (CRA) reported monthly decline averaging 10.2%, ranging from 6.7% in the Brisbane market to 15.9% in Perth. Market leaders Sydney and Melbourne dropped 11.4% and 8.7%, respectively. CRA reports ad revenue data quarterly collected by Deloitte. Australia’s commercial radio broadcasting business is quite robust. But this year has been something of a challenge for revenue development. “Overarching economic conditions and broader market conditions” were cited by CRA chief executive Joan Warner, quoted by Sydney Morning Herald (October 15th). "The December quarter leading into Christmas is usually the busiest and we hope to see the market stabilise before returning to growth.” Year on year quarterly metropolitan Australia radio ad revenues fell to AUS$181.4 million from AUS$202.1 million. Broadcasters were quick to dissemble, the holiday selling season upon them. “I field calls from the investor market every day, and every call starts with the same question, 'is this radio's turn to be the newspapers?” said Australian Radio Network (ARN) chief executive Ciaran Davis at the Radio Alive conference coincident with the data release, quoted by Australian advertising news portal adnews.com.au (October 18). “And that’s total crap if I’m being honest.” ARN operates about a dozen radio channels in major cities and its owned by Here, There & Everywhere (HT&E), formerly known as APN News & Media. News Corporation Australia is a shareholder in HT&E. "We've all enjoyed a pretty good time last year, and we performed much better than a lot of other sectors but we all understand it's unlikely that it will start raining money this year,” said Southern Cross Austereo (SCA) chief executive Grant Blackley at the same conference. "It is going to be relatively tough over the next three months but buyers need to be aware of the macroeconomic overtures within the market.” SCA operates two quasi-national networks - pop music Hit Network and rock and talk Triple M LocalWorks - on dozens of stations across the country. Also claiming it could be worse was Nova Entertainment chief executive Cathy O’Conner. “Looking around at the broader media landscape, there are a lot of other areas that are struggling worse than we are. The fact that people think it's newsworthy that radio undergoing a short period of pain is interesting and that is leading to people asking a level of disproportionally unfair questions about radio.” Nova Entertainment operates metropolitan radio stations, mostly under the Nova and Smooth brands. The company is wholly owned by an investment company of Lachlan Murdoch. Every conversation about ad spending eventually gets around to Facebook and Google. “Many a platform has tried to come into the radio space,” argued Mr. Davis. “They can do a lot of content, but they don’t have local personalities. And I think we’ve got to get out of the mindset of trying to be friendly on the enemies to Google and Facebook and actually look at our own industry and be confident in the talent and the output that we have.” Earlier this year the Australian Competition and Consumer Commission (ACCC) issued a gargantuan report, over 600 pages of recommendations, excoriating the big digital platforms for all the common sins, including “commercial imbalances.” Online media takes about half of Australia’s ad spending, Google and Facebook, specifically, take 70% of digital advertising. The ACCC recommendations have now passed to media regulator for further recommendations by the end of the year. Closer to radio broadcasters immediate interest is a shift in measurement, from diaries to smart-watches. Pitched as a “world-first initiative”, said Sydney Morning Herald (October 19), the technology proposed is the time-tested Swiss GfK Telecontrol mediawatch, first implemented in 2001. Other passive measurement systems have developed over the years, now including downloadable apps for smartphones. Electronic measurement competes, in some ways, with the data capture on online media. See also... |
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