Digital radio presents a major opportunity to brands as smartphone penetration increases and marketers gain greater scope to connect with listeners on the move. In the first quarter of 2011, 26.5% of radio listening came via digital platforms, according to Rajar figures, the highest percentage to date.
While the government will not finalise a date for a digital switchover until the medium accounts for more than half of all listening, many advertisers are already taking advantage of the increased functionality offered by the availability of stations online and via mobile.
Simon Blackburn, business director and head of radio at media agency MPG, concedes that 'it might take a bit of time'
for the majority of listeners to switch to digital, but says the numbers are already convincing. 'More than a quarter of all listening is a number that can't be ignored. Opportunities for advertisers are becoming more and more significant,' he says.
Digital audio broadcasting (DAB) is the dominant digital platform, accounting for 16.7% of all radio listening in the first quarter this year, according to Rajar data. However, Simon Redican, managing director of marketing body the Radio Advertising Bureau, argues that online and mobile platforms will play the biggest role in attracting advertisers. 'Broadcast advertising is broadcast advertising, whatever platform it's on,' says Redican. 'Where it gets interesting is when you can introduce more content and add to the advertising experience.'
Rajar figures show that about 16.3m people have listened to radio via the internet, 12.7m adults have used a 'Listen again' service, and 8.1m have downloaded a podcast.
While it's early days for advertising on these platforms, many believe that the capability to incorporate visual content, the improved tracking offered by digital media and the relaxation of Ofcom brand-integration regulations mean they can enhance traditional on-air spots.
'One of the big restraints of radio has always been the lack of visual impact,' says Blackburn, whose multi-platform work includes a campaign for Lowcostholidays.com on stations including Absolute and talkSPORT. 'One of the obvious benefits of stronger digital properties, then, is that they offer visual representation. That's good for branding but, more importantly, it's a great way to direct listeners through to advertisers' websites.'
Mike Williamson is head of radio at media agency Carat. One of its clients, British Gas, has a long association with Absolute. 'These platforms can provide deeper engagement for the listener that often benefits the advertiser. Radio is now a multi-platform media - it's about how radio stations can exploit that,' he says.
As commercial director at Absolute Radio, Chris Goldson is focusing on turning these digital propositions into advertising revenue. He says that 60% of listening to Absolute's network of stations takes place via digital, with the Absolute brandaccessible via 189 platforms.
Crucially, more than 40% of listening to its core Absolute Radio brand, available on AM nationwide and on FM in London, now comes via digital platforms - way ahead of commercial radio's overall Rajar figure of 24.6%. 'We're a radio business, not a digital company,' says Goldson. 'But digital gives us so many exciting touchpoints and opportunities to engage and interact, that it adds to the breadth of what we can do.'
Goldson cites Absolute's partnership with Sony Ericsson on David Baddiel and Frank Skinner's World Cup 2010 podcasts as a 'landmark deal' for the station's commercial exploitation of digital platforms. 'That was a digitally focused campaign that had a broadcast element,'
he says. 'We were broadcasting their podcasts, rather than making podcasts of their live show - it was a great piece of activity for Sony Ericsson to be involved in, not least because its phones could be used in the mechanics.'
The smartphone factor
While the number of people listening via mobile remains relatively low, many in the industry expect smartphones to ultimately make a significant contribution to listening figures and the development of multi-platform ad campaigns. According to Rajar figures, 6.6m adults have listened to radio via their phone, with 16% of those tuning in via an app for a specific radio station.
More than a quarter of smartphone owners (about 2.2m people) have downloaded a radio app, with 44% of those using it to tune in at least once a week. Meanwhile, a study by digital agency Imano showed 55% of UK iPad owners had used the device to listen to live radio.
Nick Piggott, head of creative technology at Global Radio, which owns Heart, Capital, Xfm and Classic FM - says its Capital app has been downloaded more than 1m times. He expects the mobile audience to grow significantly as more consumers buy and use smartphones.
'The big opportunity with smartphones is they're very functional,' he adds. He cites the devices' colour displays, touchscreens and internet connectivity as crucial in providing a simple route 'from hearing something interesting on the radio to seeing something on screen in an app, clicking on it and being engaged'.
Piggott claims that Global's in-app ad space is booked up months in advance.
It will soon offer the option to have visual ads synchronised with on-air spots across its 'visual stream' services, which include apps and online listening via its websites and the radioplayer.
However, while many are encouraged by the possibilities offered by the latest platforms, it's tempered by widespread public confusion over digital switchover. Few in the radio or advertising industries believe this will happen by the government's target of 2015 and, while Rajar data shows that 38.2% of adults claim to own a DAB set at home, the rise of penetration for the 16-year-old format has proved frustratingly slow.
Williamson expects multiplatform marketing campaigns to increase significantly once the 50% digital listening target is reached, but in the meantime, several digital-only commercial stations have closed, while many of those that remain struggle to win significant audiences or advertising revenue.
Meanwhile, established radio brands have had to cope with the expense of broadcasting on both analogue and digital platforms.
'It's a crucial year,' admits Goldson. 'Digital has the potential to revitalise what radio offers, without taking away from its traditional strength. We haven't scratched the surface yet.'
Online car insurance brand Swiftcover is in the second year of its sponsorship of Absolute Radio's live-music content, a deal that has allowed it to be associated with events from Elbow's gig in St Paul's Cathedral to the Isle of Wight Festival.
Senior marketing manager Amanda Edwards says Swiftcover chose Absolute for its ability 'to extend reach through the events it's involved in'.
While traditional on-air ads will air later this year, Swiftcover's branding on Absolute's website drives traffic to the insurer.
Breakfast Show DJ Christian O'Connell attended the launch of Swiftcover's Waterloo Station promotion, featuring the Iggy Pop puppet from its TV ads.
Edwards says research has showed that Swiftcover's brand awareness remains higher for Absolute listeners, who are also more likely to consider Swiftcover for car insurance.
SONY ERICSSON XPERIA X10/GLOBAL RADIO
Radio rarely plays a significant role in Sony Ericsson campaigns, but the launch of Global Radio's Xfm, Capital and Choice FM Android apps fitted well with the X10's 'mini but mighty' campaign launch.
Sony Ericsson's UK marketing director, David Hilton, says the project had 'mutual advantages'.
'We gave Global exposure to our customer base, and Global had an exciting app that we can talk about as one of the benefits of having a Sony Ericsson Android phone,' he adds.
Global Rado DJs promoted the apps on air and via online videos, while listeners who downloaded them gained exclusive access to a competition to win tickets to a secret Scouting For Girls gig.
According to Sony Ericsson's media agency MEC, more than 60,000 people entered, while Global's Android apps were downloaded more than 500,000 times during the campaign. The activity won best use of mobile and best cross-media project at this year's AOP Awards.