campaignlive.co.uk, Friday, 05 November 2004 12:00AM
The radio industry had ample reason to be pleased with itself at the Digital Radio Development Bureau press conference back in the first week of October.
Here, before us, was an ebullient Ralph Bernard, a man who is not only the chairman of the DRDB but also the executive chairman of GWR - and thus an embodiment of the radio medium's two main themes as it forges ahead into the 21st century.
Those two themes are, of course, consolidation - the news of the merger between GWR and Capital still lingered fresh in everyone's minds - and digital, the main reason for holding the press conference.
Bernard was feeling so bullish about the latter that he felt able to set a few cats among the pigeons. Pointing to the new DRDB forecast that 29 per cent of UK homes will have at least one digital audio broadcasting (DAB) set by 2008, he said: "Figures such as this would give us the confidence to set a target date for turning off the analogue signals. That would help us fix the idea of change in people's minds."
He was being deliberately provocative here, obviously. Although the Government hopes to switch off analogue TV signals in 2012, it has no such plan for radio, and many in the radio industry itself are openly hostile to the notion. After all, there are millions of analogue sets out there and it would seem a shame to stop accessing them.
But if it did nothing else, Bernard's statement was probably effective in routing the last of the digital pessimists. Even a year ago, many observers were sceptical about whether DAB would ever get off the ground in any meaningful way - some even questioned whether there was a real need for it in an era when mobile internet access and the iPod were more compelling themes.
There was a point about 18 months ago when even the technology's most ardent supporters began to admit privately that it was weeks away from collapse. Now, according to the DRDB, DAB is back on the adoption curve that all successful technologies experience, from colour TVs to computers - and in fact, it's now climbing slightly ahead of the take-up rate for the internet in the 90s.
Access to digital will be boosted even further by car makers, a growing number of whom are offering DAB sets as optional extras - and it won't be long before they come as standard. And that's before we get on to the subject of people listening via the three digital television platforms - SkyDigital, Freeview and cable.
Advertisers and agencies are having to get used to the fact that digital radio is no longer a just vague idea - it's rapidly rising up the planning agenda. So should advertisers rejoice?
Media owners give a resounding "yes" and, in doing so, they tend to focus on audience opportunities and, in particular, the prospect of taking the fight to the BBC. Quentin Howard, the chief executive of Digital One, the operator of the UK's sole national commercial multiplex licence, says the argument is completely straightforward.
Nationally, commercial's share of listening is almost level with the BBC's, at around 44 per cent. In London, where there is a greater choice of commercial stations, commercial takes 55 per cent.
Howard says: "If we can grow that to 70 per cent, we will grow our revenues regardless. We can nip in and pinch the ground that the BBC is unable to service. Obviously, the BBC won't lie down and let itself be kicked, but I firmly believe that we can achieve 70 per cent of the audience within a time span of seven to ten years."
Which is all very plausible. But equally plausible are the potential downsides. For instance, more stations might mean more audience share but it will also mean more fragmentation. As we've seen in digital TV, there will be hundreds of stations attracting audiences that the industry's audience research panel, Rajar, will struggle to measure meaningfully.
Then there are the ways in which applications in new digital receivers will be used to edit out advertising - and research on ad avoidance carried out for Campaign by Tickbox.net paints a gloomy picture (see box). Unapologetic technophiles such as Howard counter this by arguing that the availability of TiVo-like technologies will actually be a double-edged sword. He says, for instance, that people might use a playback facility to store commercial information they're interested in. Or even, at the simplest level, to retrieve contact details they've just missed.
And, he adds, there will be opportunities to use digital radio's data- streaming capacity in a creative and compelling manner. There's every prospect of radio becoming a fully interactive medium in the next few years too. But even he admits: "I think it's short-sighted to imagine that the 30- second spot will remain the dominant means of executing advertisers' requirements and I think the radio industry should look at what has been happening in TV, particularly as regards sponsorship and interactivity."
Phil Riley, the chairman and chief executive of Chrysalis Radio, also feels that the TiVo-type threat is overstated as far as radio is concerned.
He comments: "Radio, especially music-based commercial radio, is very much consumed in real time. Recording and playback will be very much a BBC phenomenon - for instance people will use it to record programmes such as The Archers - but I don't think replay threatens advertisers. In fact, it may well be in their favour. Listeners might say: 'Hang on, what was that?' and press a button so they can hear information again."
Is that really the way advertisers and agencies see things panning out? Steve Parker, the UK buying director of Starcom Motive, says research remains the biggest potential concern. He explains: "As the audience fragments, we will need better research to understand who is listening and how they are listening to various stations - and, actually, I think, in general, more media owners need to understand that this is a genuine opportunity rather than a huge risk."
Parker points out that media owners have made big investments in winning the licences and in developing the technology. Now they must be prepared to take the next step, he argues.
But if media owners are increasingly forced to undertake their own research on their own stations, won't that fatally undermine Rajar? And if so, does that really matter? Rajar, after all, has been heavily criticised by some media owners (notably Kelvin MacKenzie, the chief executive of The Wireless Group, who has even threatened legal action) for failing to cope with the relatively modest demands of analogue radio.
Sally de la Bedoyere, the managing director of Rajar, points out that the organisation has already set out a "Roadmap to Change" and is now committed to replacing its archaic self-completion diary system with some form of electronic monitoring. She's confident Rajar can meet the new challenges posed by digital.
"We believe that there is great potential in audiometers designed for this purpose, but earlier versions have not addressed the complex and stringent needs of the UK market," she says. "It is for this reason we are currently undergoing an industry-wide consultation on future requirements of the survey, and are finalising tests for the new meters this November. This is part of our Roadmap to Change, which is hopeful of providing this kind of data detail by 2007."
But whatever happens, she says no-one will want to see Rajar weakened.
"Some media owners undertake some qualitative and quantitative research, but it is not used as official currency. The radio industry understands it is crucial for its future that there is only one gold standard for radio audience research - fragmentation would be disastrous for the industry," she says.
Tim Bleakley, who left Emap Advertising to take the managing director role at Viacom Outdoor last month, would echo much of that - but he also underlines the fact that media owners will have an increasingly important role to play. He says: "When consumers start behaving differently, it sometimes takes the industry a while to come to terms with it - and we've had direct experience of that with people using the Freeview platform to listen to digital radio stations. Initially, there were those who flatly refused to believe it was happening. Sometimes they need a bit of extra help."
We'll see, obviously - but at the very least, it seems clear that advertisers may have to start taking a lot more on trust from media owners. And it's going to be a challenging sell. Bleakley concludes: "Broadly, it's true that a new Rajar methodology will not be able to supply advertisers and agencies with what they want unless they are prepared to pay a lot more money. So, yes, I think that we'll start seeing much more in the way of 'drill down' studies that will allow them to get more out of the industry research."
WHAT BRITAIN THINKS OF RADIO
If you had a digital radio with a personal recorder (the radio equivalent of TiVo), would you use it to avoid listening to the ads? Good question.
So good in fact, that Campaign thought it worth commissioning a survey through the online research group Tickbox.net to find out what people really think.
The results will not make easy reading for many in the radio business.
The take-home figure is that 65 per cent of respondents said yes, they would become ad avoiders if they were to own a digital radio.
Such a high figure should come as no surprise, given what we know of the impact of PVRs in the TV world, especially in the US where they're causing seismic tremors up and down Madison Avenue. But it will nonetheless be depressing for those who believe that award schemes promoting improved creativity (for instance, the Aerial Awards) have led to radio advertising winning more friends and influencing people.
Perhaps more worrying is that the proportion of would-be ad dodgers rises to 75 per cent among 25- to 34-year-olds, typically a favourite audience for those advertisers aiming to tap into the affluent youth market.
This is partly explained by the fact that, despite the progress the industry is supposed to have made creatively, us Brits just don't seem to like radio advertising. Fifty-seven per cent of the people we asked said they find radio ads irritating, which spills over to more than two-thirds of 25- to 34-year-olds.
Only 13 per cent find radio ads entertaining, while a measly 4 per cent say they're informative. Clearly there's a lot of work to be done touching up those scripts or splashing out a little extra on a celebrity that listeners have actually heard of.
Also feeding into the creative conundrum, it seems that digital could have bigger structural repercussions for the radio industry than anyone anticipated - and, as in TV, some commentators are forecasting that advertiser-funded content will have to be the way forward. Oliver Russell, a director of the radio sponsorship company Sound, says he would be saddened if spot advertising started to become less effective - but clearly there will be a bigger role for other forms of commercial activity.
And as it happens, advertisers and media owners are more clued up about this area than you'd think - sponsorship of things such as the news and the weather or chart or football shows are well documented (see our "Branded Airwaves" feature on page 30), but what isn't so well-known is the fact that many stations take more than 10 per cent of their revenues in the form of in-show promotions and competitions. "Advertiser-funded programming in the future will build on that foundation," Russell states.
Media historians will be trawling the archives from the 30s and 40s to see if there are any lessons to be learned from the original advertiser-devised soap operas in the US, so called because they were first used by soap companies to target housewives.
Or perhaps not - the early soaps targeted a mass audience. Russell believes that, in the digital future, we'll see programme strands targeting every single special-interest group you can think of, from cookery to karate.
If you had a digital radio with a personal recording facility, would you
use it to avoid ads (per cent)?
Do you find radio ads (per cent) ...
I am indifferent to them 4
Do you think the growth of digital radio will (per cent) ...
Improve the quality of programmes? 53
Mean there is too much choice? 19
None of these 28
Do you listen to the radio through (per cent) ...
An analogue radio? 92
The internet? 27
Source: Tickbox.net (nationwide online survey conducted in October 2004;
sample size: 1,192).
This article was first published on campaignlive.co.uk