Irish radio needs ‘radical’ overhaul to counter revenue decline, say media agencies

‘Huge concern’ as medium’s popularity is not reflected in its share of advertising market

Ireland’s ‘love affair with radio is very much alive’, but advertisers’ fondness for the medium has waned. Photograph: iStock.

Ireland’s ‘love affair with radio is very much alive’, but advertisers’ fondness for the medium has waned. Photograph: iStock.

 

Ireland’s radio industry needs to “turn everything inside out” and overhaul how it sells advertising if it wants to escape the shadow cast by tech giants Google and Facebook, a radio conference in Dublin heard on Friday.

There was little by way of easy listening as the heads of three media agencies told radio executives and marketers at the Radio Days Ireland conference that the medium was in danger of losing further market share to digital media.

Dentsu Aegis Ireland chief executive Liam McDonnell said radio would suffer in the same way as print if the industry didn’t take “radical” steps and “turn everything inside out”.

He called for the Irish radio sector to “aggressively drive digital” innovations and consolidate, “either officially or in an umbrella manner”, to better cope with Google and Facebook, which between them are hoovering up any gains in Irish ad spending.

Bill Kinlay, who leads Group M in Ireland, said the absence of live measurement data put radio at a disadvantage to digital for selling ads. “Radio needs to catch up in a major way,” he said, adding that the standard of radio advertising copy was also “not as good as it needs to be”.

Dave Harland, chief executive of Omnicom Media Group in Ireland, said the conversation had begun on a “horribly negative and defeatist” note, but he too called for “more dynamism”, energy and collaboration in the sector.

The media agencies that plan and book ad campaigns for clients are keen for radio owners to move from selling radio ads on a spot basis, in which advertisers book a certain volume of ads, to a cost-per-thousand (CPT) basis, with advertisers paying according to the size of the audience reached. RTÉ recently began selling radio advertising on a CPT basis, which Mr Harland said “makes an awful lot of sense”.

A CPT system would help radio stations sell advertising inventory “more efficiently”, Mr Kinlay agreed, but a “more sophisticated” audience measurement system than the quarterly Joint National Listenership Research (JNLR)data was also required for radio to fight back.

‘Absolute fatigue’

Mr McDonnell said there was “absolute fatigue” among agencies in hearing “who is up a point and who is down a point” in market share, while Mr Harland said the JNLR’s weekly audience reach figures were also unimportant. “Quite a few of the metrics used are outdated,” he said.

The industry has welcomed an announcement by Minister for Communications Denis Naughten that he will amend broadcasting legislation that sets an upper hourly limit of 10 minutes of advertising on commercial radio stations. However, a perhaps greater challenge for Irish radio is persuading advertisers to spend their budgets with them in the first place.

John Purcell, chairman of the Independent Broadcasters of Ireland (IBI) group and chief executive of Carlow and Kilkenny station KCLR 96 FM, said it was “a huge concern” that radio advertising was expected to contract again in 2018.

If it does, it will be the third consecutive year of decline, figures from Core Media suggest. While the overall advertising market will grow 7 per cent this year, according to Core’s estimates, radio revenues will fall 3 per cent.

Core has also commented that the sector “needs to act” and that, as part of this, the Broadcasting Authority of Ireland (BAI) should update the way it awards licences, to better plan for a digital-only future and “stop focusing on FM”.

Group M, which is part of advertising giant WPP, forecasts that adspend by media agencies will be flat in 2018, but that media agencies’ spending on radio will fall 6 per cent, while Dentsu Aegis expects radio advertising will either decline or be flat in 2018 amid an overall “low single-digit growth” in the ad market.

Love affair

“Does the rising tide lift all boats? In the case of radio, the answer is no,” said Mr Purcell, who quoted Unilever marketing boss Keith Weed’s recent remarks that the big tech platforms have become a “swamp” of fake news, extremism and prejudices.

“The choices made by the Unilevers of this world have a very big impact on our media,” Mr Purcell said. “Maybe it’s time for some corporate social responsibility in terms of media choices.”

The industry has, in recent years, consistently highlighted that the popularity of radio among Irish people is not reflected in the medium’s share of the advertising market.

Gabrielle Cummins, chief executive of south-east station Beat 102-103 and chair of the industry-wide Choose Radio group, said the JNLR data, which shows that 3.1 million Irish adults listen to radio for an average of more than four hours a day, “proves Ireland’s love affair with radio is very much alive”.