Television is not the only traditional medium to have had a strong start to 2014. New figures this week confirm what many in the business have been alluding to for some time: radio is enjoying a renaissance.
From a listener perspective, the UK’s love affair with radio has never been in doubt. Among adults, the sector regularly commands more than 90 per cent during any given week and continues to be the UK’s second-most-consumed medium (IPA TouchPoints).
Yet trying to translate radio’s reach into advertising revenues remains a tough battle for its commercial players. Radio is still often overlooked as the "support act", despite compelling evidence of its ability to not only lift and tap into the mood of the nation, but to provide a return on investment for brands of nearly 8:1.
The first three months of 2014 have seen the sector build on the momentum generated last year. The launch of the Radio Advertising Bureau’s first-ever analysis of cross-agency data in its Multiplier study in October appears to have added grist to the mill.
Advertising revenue has increased by more than 3 per cent, according to the RAB, on the back of a 6 per cent rise in the final quarter of 2013. The outlook for the second quarter of 2014 is said to be even stronger, with double-digit lifts in trading reported across the main groups. Among the UK’s 100 biggest-spending radio advertisers, radio’s share of marketing budgets rose to 26.7 per cent, from 18.8 per cent a year earlier.
It should not be a surprise that brands wanting an emotional connection are turning to opportunities around audio
Global Radio’s managing director, Mike Gordon, is among those enjoying strong returns from a portfolio that includes Heart, Capital, Classic FM and LBC. He credits the RAB’s econometric work, and attributes ad highs to a combination of regular brands increasing their budgets and new or lapsed companies turning to radio. There has been notable growth from retail, as confidence returns on the high street, plus new spend from the personalised entertainment and digital/tech categories.
It should not be a great surprise that brands wanting to create an emotional connection are turning to opportunities around audio.
Apple’s $3 billion acquisition of Beats Electronics last week is testament to the perceived potential of the company’s nascent music-streaming service – a move that will not have escaped the radio industry.
As business models continue to collide, traditional broadcasters cannot allow themselves to be held back by largely philosophical arguments about what "radio" is.
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