ARN and Nova sales reps are feeling the pressure to recoup corporate investment, while SCA needs to better articulate its plan, according to media buyers.
Meanwhile, all three networks are failing to win digital marketing dollars and could do with automating the sales process. But in the face of fragmentation and increasing competition, the medium is excelling at holding what it has, say media agency bosses.
Meanwhile, sales reps are under increased pressure to recoup corporate investment made in the ongoing battle to win audience share.
“ARN invested in Kyle and Jackie O and is now under pressure to recoup that investment,” according to ZenithOptimedia boss Ian Perrin. Meanwhile, Nova has invested in a rebrand and its owner has shelled out to take control of the rest of the company.
“So reps are pushing hard,” said Perrin. “According to SMI data, radio is down 3.5% for the year to date ($307m to July versus $320m to July 2013), so while all the companies are bullish publicly, they are working very hard to recoup those dollars. Lots of sales people are feeling the pressure.”
But the dollars are following the power shifts, Perrin suggested, “perhaps not to the extent that audience has changed, but we are likely to see that catch up in the next few months.”
“That said,” Perrin continued, “there are always very interesting tactical opportunities across networks … There is still value to be had where audiences have declined.”
Starcom boss John Sintras said the agency had seen no more “aggressiveness” on display from radio reps than in any other market.
“Everybody is under pressure, they are always aggressive.” UM boss Mat Baxter agreed.
Baxter, who last month poured cold water on the idea that radio networks could compete for digital and social media marketing budgets, said his view was unchanged. “That won't happen until stations position themselves beyond radio and their digital channels can compete squarely [with pure-play digital channels.]”
Sintras said that approach was “absolutely what radio stations have to do,” and pointed out that other channels such as newspapers were attempting the same thing. The difference with radio networks, he said, was that “they have defended their share [of traditional revenues], compared to newspapers and magazines” which have haemorraged ad dollars.
In a fragmenting world “radio was one of the first channels to [harness digital to amplify audiences],” said Sintras. “It is not just about growth, it is about keeping what you have.”
Starcom counts Spotify as a client and Sintras said that “streaming is the way that it is going, the same as TV,” but stressed that, as with video, streaming would not kill radio. “It is still a very powerful medium.”
While other buyers suggested streaming services would leave the music side of radio struggling, Sintras disagreed. “People need curation and that is a very important role.”
MEC trading director Seb Rennie suggested that the push for share of other channel budgets remained a work in progress. However, he said that traditional radio media sales were “ripe for being traded in an automated fashion.”
“If any of the networks could take a leadership stance they would drive how radio media is being traded,” he said. A “ hybrid programmatic” approach would also help them take social and digital budgets given the biddable nature of those media.
Starcom's Sintras said there was potential for automation, but whether that worked well was “down to the quality of the buyer and ... depends on what the spots are designed for.”
Another media buyer, wishing to remain anonymous because he had to deal with all three networks, suggested that SCA would help its cause by better articulating its plan to the market.
“It's in trouble at the moment. Not really in terms of numbers, because it is not doing particularly badly, but in the perception that it seems to lack a plan. Nova and ARN just seem to be slightly more buttoned down in terms of planning and where they want to go. Their CEOs [Cathy O'Connor and Ciaran Davis] are more vocal, they are out there pressing the flesh.”
However, he said that the network's digital push and ability to create and amplify content would likely bear fruit, provided talent could keep up with the increased demand on their time.
“[DJs] are becoming content production hubs. I'm not sure if these guys get any sleep, but it's great because advertisers want that and they are naturally good talkers and good spruikers,” he said.
Most buyers agreed that radio was delivering when it came to integration.
But ZenithOptimedia's Perrin said that while radio was “very good” at matching brands with talent where there was a natural fit, “they have to go beyond easy solutions and create platforms outside of talent that they can leverage.”
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