Radio in 2020: How advertisers & broadcasters respond to COVID-19

• How radio and media agencies are working together in uncertain times

In a special Mediaweek podcast on the commercial radio sector, Mediaweek editor James Manning was joined by guests Peter Whitehead (Chief Commercial Officer, ARN), Jodi Fraser (Commercial Director, Publicis) and Ralph van Dijk (Founding Creative Director, Eardrum) to talk about radio advertising opportunities & challenges in 2020.

There was much discussion about the COVID-19 has impacted advertisers and radio, the way people are listening to radio, and different audio opportunities now available to advertisers and how the industry is co-operating for a recovery.

Following are some of the highlights of the conversation.

Listen to the podcast here.

Consumer behaviour during COVID-19

PW: We have since a dramatic change in consumer behaviour and it is all about product purchasing. People are scrambling to get basics for home living and gearing up for quarantine living. There has been growth in online shopping and we are waiting to see what happens next with the infection.

Radio is still able to fulfil the routine that people are craving right now. It is a trusted medium that provides a sense of comfort and a sense of community and will continue to do so.

We are more and more confident that all audio formats are going to continue to flourish and we will see an increase of in-home listening. That will be radio, podcasting and music streaming. We are seeing an uptick in consumption and out data is showing a 20% increase in iHeartRadio sign-ins recently.

That is a hefty sample with about 1.1m listeners – radio consumption is up close to 20% and podcast audience growth is up close to 30%. The pandemic is driving audio consumption across all those platforms.

Demand high for radio ads

RVD: People wanting our services gives us an idea of the health of the sector and we work slightly ahead of the media bookings. We are busy – we have had more new businesses come to us looking at radio than there have been clients who have put a hold on their activity. Some of those brands are new to radio because they are aware there is an increase in listening.

In home listening has always been strong

PW: In home listening is habitual. People wake up and get their news fix. We are seeing smart speakers driving that even more as they make it easier to engage with radio via a quick voice command given to Alexa or Google. Audio listening in the home makes up 52% of all listening versus 26% of listening in the car. Of that home listening, 74% of that is to commercial radio.

With social distancing likely to increase the lines between at work and home listening start to blur.

Importance of breakfast audience

JF: One of the main reasons why breakfast is so important for radio is the personalities. People have a real fondness for certain radio hosts and they tune in both for news and to have a laugh before they start their day. Those routines remain really important during this time. I wouldn’t be surprised if listening to other dayparts increased given radio is a way to help create a normal environment in the home with more workers and students not leaving during the day.

Spread of radio spend across other audio opportunities

JF: We are starting to see spends diversify. But outside of something like the Spotify platform, we haven’t really caught up with the audience yet. The main reasons agencies haven’t is measurement – we want measurement that includes linear radio and streaming radio and podcasts. We are not quite there yet. We know people are listening and we want to be there, but it’s like anything in media, if you can’t qualify it, we can’t advertise in it.

When it comes to other opportunities we don’t need to necessarily be on the highest-rating podcast at the moment. It’s more of a regular digital buying strategy – we would look for an audience across maybe 25 different podcasts. Outside of sponsorships, that is the best way for us get the most audience we can.

How receptive are clients to new audio opportunities?

PW: Jodie is right, audio has a job to do on measurement – particulary, podcasts, streaming and voice. In current share of ear, radio still holds about 84% of listening. Podcasts are up to 10% and music streaming is on 6%. Podcasts and streaming complement, rather than replace radio. Radio is about convenience and the connection with the local community, music is the mood enhancer, replacing bought recorded music, and podcasts are for self-fulfilment, the content indulgence, like magazines. Overall listening is up 7%.

If we were advising a client on podcast investment, we would advise on how listeners are choosing their audio. So the budget should increase by 7% and then split across the share of listening as mentioned – 84% radio, 10% podcasting and 6% streaming.

Podcasting time is only going to increase because people crave good content. Once consumers are finished with MAFS, finished with Tiger King, they will be putting on their headphones and exploring the podcast world.

Adapting to the needs of brands during COVID-19

JF: Everyone in radio is doing the two things you have to do right now – be flexible and easy to deal with. That is what we are looking for. Luckily at Publicis we have a very heavy FMCG load meaning we are still advertising which is great and radio is helping us with quick turnarounds and creative changes and whatever we need to make sure we have the right messaging on radio. Importantly for our clients, radio is offering them two main things – immediacy and trust.

Challenges for meeting needs of agencies after shutdown

PW: Week one was a bit of a challenge, but in week two we got used to it and we are dealing with it now. The key to this is agility and adaptability. You might notice more live reads on air now – where the live read is explaining how a new business model might work. We are seeing pubs and restaurants starting home delivery, real estate agents doing virtual tours of properties for sale. They are all having to adapt their business models.

Changing pattern of adspend

JF: There are certain categories that are getting really impacted. For the most part advertisers are looking at this period and trying to be responsible. We don’t want to pull out of advertising, we don’t want to go backwards and we want to keep things as normal as possible. It has been a little better than we initially expected, but there some categories really impacted, like auto which I didn’t initially foresee. April is going to be hard, but we are seeing already a bit of bounce back in May.

Categories that are impacted

PW: The things that have been hurt the most are the obvious ones – the events that can no longer happen and the shops that are no longer open. That has impacted every medium, but we are still seeing solid growth out of a number of categories. Government is one with the Federal, State and Local Government needing to get their messages out there. They are putting a lot of money into every platform.

Many retailers are spending though from supermarkets to liquor chains. It is very short though with many making a decision to book media a day out. Insurance companies are spending and so are law firms, banking and finance and online learning plus telcos as well.

Cancellations hit us hard in the first two weeks, but there is still money coming through and is starting to build.

Advertising pricing pressures

JF: There is a little bit of that going on at the moment, but for the most part agencies and clients want to be supporting the industry right now. We are not trying to take advantage of people – times are tough and we are all trying to get through this together. A lot of the different channels are offering lower pricing which we will of course take! We want to come out the other side of this with all of our media partners still here.

PW: It can be hard to hold the line, but the last thing you want to do is bastardise your product and give it away. Integrity is important and we need to stay close to our agency partners to make sure we all get through.

Place for radio in the future

RVD: There will always be a need for local real time connection and as long as that remains radio will play a role. It is too efficient for it to fail or disappear. At the moment it is a medium that is very useful for brands.

JF: Radio is a medium that has always been there and will always be there. This uncertain time will help build the bond between people and radio.

PW: Connection key and radio is the original social media without the trolls. Everything that radio provides is important to get us through these times. The agility and the cost-effectiveness of the medium brings a lot to advertisers. These are difficult times and they present new opportunities and we are working to get through them together.

Listen to the Mediaweek podcast here.

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