Warming Up The Ad Buyers

Michael Hedges January 6, 2005

Each New Years brings with it tidings, if not promise, of health and prosperity. Forecasters have already chimed in with the prospect of more ad spending for most media in 2005. This is a warming thought because the last four years have not been ringing financial successes for much of Europe’s media.
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But the warm holiday glow fades quickly as those same forecasts predict big media maintaining its share, local media under intense pressure and on-line advertising both increasing its share of money spent and, notably, confusing ad buyers.

The rebound position for radio broadcasters is to consolidate whenever possible and sell harder. Ownership consolidation the scale of the Capital Group/GWR merger in the UK or the station trading by SBS in Scandinavia in 2004 is not possible everywhere due to national regulatory constraints. Indeed, companies that made significant acquisitions in 2004 may well sit out 2005 and 2006 to digest the goodies. And the fall of the US dollar means American investors are not looking with wanton eyes at European media.

For the rest of Europe’s radio broadcasters selling their ad space will continue to consolidate. And the task will be just that much harder as ad buyers and agencies, even with more money to spend, are pressured by their clients to make careful choices.

“Hello, I’m RadioMan”

Radio broadcasters now with several years experience struggling with ad buyers distracted by everything from zapping to the Internet press the case that their medium is good for business with organized presentations and, yes, clever radio spots.

Austria’s private broadcaster association Verband Österreichischer Privatsender (VÖP) launched the RadioMan spot campaign in May 2004. A series of radio ads promoting the virtue of advertising on radio aired on commercial stations through October.

Hungarian broadcasters and marketing advisor Ipsos-Szonda conducted an advertising survey and presented it in a campaign directed at media buyers called Yes! Radio! The study showed the advantage of radio as a high recall, low cost medium, relative to television and print.

A study of Swiss commercial radio published in September criticized existing ad pools as inefficient and ineffective. Immediately thereafter, sales-houses operating the largest pools launched radiopower.ch as a solution for sluggish radio revenue. Ad pool organizers act as time brokers, offering various combinations of stations, reach and rates.

PubliGroupe, the major Swiss television and print media buyer, announced plans to add radio to portfolio, adding pressure to radio spot brokers to improve their service.

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These promotional campaigns are designed to get ad agencies and media buyers attention. Sales-houses represent their clients and, while traditionally very effective in presenting radios advantages, limit their marketing to the interests of those clients. Commercial broadcaster associations have members interests in mind but often have fewer assets available to mount marketing campaigns. Only a few radio advertising organizations operate in Europe on a full-time basis, like the Radio Advertising Bureau (RAB) in the UK.

Ad agencies have become more cautious and demanding.  Streamlined planning software and portable electronic measurement are tools demanded by media buyers and ad agencies. These tools and broadcasters marketing campaigns are helpful but, according to ad agencies, radio has a perceptual challenge.

“Gone are the days when radio was hip and cool,” says Levente Kovacs, creative director and co-owner of Budapest ad agency REM Kreativ Csoport. “TV has ruthlessly taken over and maintains its position against all its 'enemies'.”

As a creative director Kovacs is critical of ad quality on Hungarian stations. “To many Hungarian advertisers,” he observes, “radio is the only mass media they can afford, but they have no good creative agencies so the results are rushed off, non-inviting, aggressive 20 seconds, splashed at the listeners' ears.”

“TV is an expensive and serious business, as opposed to most other mediums. One can have an appearance on a national radio station for ridicuolusly low fees, while that money won't even buy them a drink at the TV's canteen. This diversity is acknowledged by the players, so 'I'm running a campaign' now means 'I am on TV'.

Kovacs believes radio is effective, based on high listenership rates and “prices  more affordable than television.”

“Radio may already have the quantity, but not the quality to their ads.”

Campaigns to raise the profile of radio as an ad medium reach media buyers, said Kovacs, but creatives are still dubious. “As a creative, I can't hear radical changes.”

From the business side of advertising, Kovacs looks for simplicity, “a fuss-free solution to reach customers…”.

“Why would one be willing to go the hard way with a medium that’s not really chic and cool anyway?”

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German Study Says Media Buyers Need Radio Power – June 29, 2006

Ad effectiveness is an always popular topic among media buyers. With ad budgets shifting – according to conventional wisdom – to “new media” studies pop up to show new value from traditional media.

German sales-houses Radio Marketing Service (RMS) and ARD Werbung Sales & Services (AS&S) released their pitch for better media buying through radio. “RadioPower – the force to create recall” – conducted by GfK Enigma – contrasted ad campaigns using TV only, radio plus TV and newspaper plus TV for both recall and, then, cost effectiveness.

“A radio and TV mix has better value than a pure TV campaign,” said AS&S Managing Director Achim Rohnke in a release accompanying the study. The study of 800 participants showed twice the recall from radio plus TV campaigns as newspaper plus TV campaigns.

Radiozentrale Hooks Up With RAB - March 23, 2006

German radio sales association Radiozentrale and the Radio Advertising Bureau (RAB US) announced a “privileged partnership” to provide RAB US sales training and materials to German and German-speaking broadcasters.

RAB US has been active in European broadcasting for more than a decade supporting individual broadcasters with access to tactical and strategic radio sales resources. It has also assisted in the formation of several national radio sales associations, notably RAB Finland, and in sales training for broadcaster associations.

Radiozentrale was formed last year by public and private broadcasters to promote radio ad sales.

This summer Radiozentrale will offer a European Radio Summit as part of the annual Cologne Radio Day.

Speculation continues that the RAB US will offer a European version of its annual US sales expo.