With Australia’s two most populace states in lockdown again, you might think confidence is down, but “advertisers have learnt to adapt” and sales are steady, according to SCA chief executive Grant Blackley, who spoke to radioinfo after the company’s annual results announcement.
He also highlighted Southern Cross Austereo’s new strategic focus which includes a ‘Digital Audio First’ strategy, growing radio audiences and encouraging audiences to “discover every room” in the ‘House of LiSTNR’ and to entertain, inform and inspire Australians, anytime, anywhere.
Given the pandemic, revenue was down a little (by 2.2%), but net profit after tax increased by nearly 92% to $48 million. “We think that’s a credible result,” says Blackley.
“There has been a substantial recovery in the media market and a substantial recovery in the audio market, of which obviously we’re a sizeable contributor to. So we’re very pleased with those numbers on the way through… we’ve also forecast that in July and August we will see 20 per cent growth posted across both of those months.
“We’re starting to see a further acceleration of our digital audio products as well in terms of their monetization. And we forecast that our audio revenues will increase by between 75 and 100 per cent over the course of the next 12 months, remembering that in the last 12 months they grew by 40 per cent. and we have a stronger digital posture and more digital services and products this year than we did last year.”
While the company had a boost in the first half of last year from Jobkeeper, it did not take any Jobkeeper subsidies or government grants in the second half year, where the company posted $51 million worth of earnings.
It was “a very pleasing result across audio” according to Blackley, who thinks audio is now a staple in the media diet of advertisers and agencies.
The suspension of surveys last year spooked the market at first, but when the commercial radio industry resumed surveys and businesses started to learn how to adapt to the changing face of the pandemic, the market turned positive again. He points to the fact that survey methodology has adapted to lockdowns as a factor in improving advertiser confidence.
Blackley does not expect the same sudden over the cliff dramatic (albeit short lived) fall in ad revenue that happened last year during this Covid Delta wave series of lockdowns. Accounts for July have closed and are looking good for SCA and August bookings seem positive so far.
“Last year there was more fear and misunderstanding as to what was occurring in the market. What we now see 12 months hence is that we have stability of the ratings… and more education about digital streaming, digital data and insights… I think the market welcomes those insights and I think it has helped to settle the market.
“Agencies and advertisers have become accepting of change and have become agile in their own right to the point that what we’re seeing is nine out of ten of the most prominent categories in advertising are all in double digit growth. There’s only one market that’s not in growth, and that’s the retail sector… we’ve had some cancellations, but they’re very small cancellations from small retailers that are quite measured. For example there has been a couple of movie launches changed because cinemas are closed, but that doesn’t mean they won’t launch, it just a timing issue.”
Agencies are “generally quite positive” about the future according to Blackley. “The confidence levels are higher than what I’ve seen for a while, the capacity to move from a stable schedule to changing that overnight has improved across the board.” He is looking forward to next year, when there will be an election which also brings more government spending.
SCA has also adapted. “Over the last four years we improved a lot of our core systems… the industry has launched the trading platform RadioMatrix for agencies… on the way through we’ve had to adapt as well. And we’ve had a fairly seamless approach, which I think the market has welcomed.”
“There is a level of respect for what the audio and radio industries have done… the work of Commercial Radio Australia and the contribution from each of the owners and operators… we’ve worked together in a very collaborative fashion to nurture technology facing improvements, stability of ratings and adaptability… I think that that places audio in a very good place in the media mix.”
He highlights how the LiSTNR app is flowing listeners back and forth between live radio streams and podcasts to expand their listening time. “They’ve walked into the house of LiSTNR, they went there to consume their favourite podcast, they were given recommendations for others and they also found radio stations being streamed live in other rooms. It’s just a natural evolution.”
There are plans for more music offerings, increased news and new sports coverage such as cricket via the LiSTNR app in coming months.
Regional radio revenue has recovered faster than metro revenue and digital revenue has grown 40%.