An article by David Rogerson for Arbitron continues to explore the possibilities for Australia’s upcoming new FM licences as radioinfo has been doing this week. The article, Get Ready for New Radio Licences is reprinted here with permission from Arbitron.
With FM radio licences being auctioned in three major Australian Capital Cities beginning in April, general managers and programmers naturally begin thinking of ways to keep and grow their listeners and advertisers. We at Arbitron have some insights about prospering in this changing environment.
We asked John Sintras, Sydney-based COO of Starcom ad agency, to pass along what advertisers and agencies are looking for from existing radio stations in times of market change.
Steady As You Go
What should a station in Brisbane, Sydney or Melbourne do as new licences come up for auction early this year?
John Sintras suggests, “Have a clear view of what your station currently represents, and a sound strategy in place to maintain your current listeners and your existing advertiser relationships.
“That is, be great at what you are and do not try to pre-empt what someone else might do, in the process confusing listeners and advertisers.”
Spread the Good Word
John also advocates that stations get out and meet personally with clients to explain that clear position. “We need to feel confident the station is going to maintain or grow its current audience, and why,” says John. “If we feel it is not complacent about a new entrant into the market, we will be more likely to back existing stations.”
Be Creative and Proactive
Think outside the box in this dynamic competitive market. “Meet with major clients and tailor the most appropriate package to meet client needs,” suggests John. “Sign up long-term deals that make it difficult for new entrants to extract dollars from your advertisers. Of course, clients will only do this when your package represents real value, not just low rates!”
What to Expect
How might a new station change the listening landscape? Information from Arbitron’s Portable People Meter (PPM) trial in Philadelphia chronicled audience shifts when a Hot AC station changed its format to AC in August 2002.
One of the advantages of the PPM is how quickly results are reported. With the PPM, stations that make format or even programming changes can see the results of their decisions in a very timely manner. The stations in Philadelphia benefited from day-by-day and week-by-week reports of audience movement.
In this case, after an initial period of audience uncertainty and discovery, the FM station that switched formats from Hot AC to AC saw its Average Quarter Hour (AQH) ratings increase, especially among women 25-54.
What It All Means
Radio stations that are committed to their formats and deliver strong programming are likely to keep their loyal audiences in the face of a new station and competitive format in town. Build on your strengths, be true to your audience, communicate a clear and consistent message regularly with your advertisers and listeners. Your station can prosper in the long run.
More for Everyone?
According to figures just released by CRA, commercial radio metropolitan advertising revenue increased by 7.8 percent to $267 million in the six months ending December 2003, compared with the same period in 2002. On the back of this strong radio revenue growth, radio companies expect the ad market to grow in 2004.
It’s a good environment for existing radio stations, as the introduction of a new station draws attention from both listeners and advertisers. Even with a new player in a market, we can all hope for a growing revenue pie to divide!