Regional Radio Ratings good for Revenue

Peter Saxon chats with Grant Broadcasters’ Grant Cameron and SCA’s Brian Gallagher.

Most would agree that people living in country towns tend to be more conservative than their city cousins. Consequently change comes a little slower. So it has been with radio.

Not any more.

As population has grown, so too have radio revenues and so has competition for that dollar. 

As it stands, there are two major regional networks, SCA and Grant Broadcasters who have different philosophies on content but broadly see eye to eye on sales. They both run well resourced national sales teams that rep a number of regional stations as well as their own.

All up SCA and Grant’s The Radio Sales Network (TRSN) each rep about 120 stations (both claim to have slightly more than the other) but for all intents and purposes it’s about the same.

A few weeks ago I spoke with SCA’s Chief Sales Officer, Brian Gallagher (left) about a wide range of topics, including regional sales. I must admit I was expecting him to give little more than lip service to the bush, given his television background and that the metro markets is where all the celebrity action is and the big money is made. Instead I found him to be an enthusiastic advocate for regional radio and I was surprised at just how bullish he is about it. 

“38 per cent of the Australia’s national ad market is regional,” says Mr Gallagher.“But if you look at the ad dollars, they’re way under indexed on that. One of the major focuses of the national sales team is building out that regional asset. The last time we reported, our growth in regional radio was around 12 per cent, which is pretty solid.”

As much as Mr Gallagher, a senior executive with a publicly listed company, was keen to talk up his organisation’s fortunes, Grant Cameron, Executive Director of a private company, was more interested in playing down his organisation’s financial performance and keeping it, well, private.

“There’s a small element among us that likes the map of the empire and where the flags are and what parts are coloured pink,”

While most of the 55 licences, give or take, owned by Grant Broadcasters are known to be highly profitable some (he won’t say which) are not. With Grant’s reputation for shrewd investment one might expect that loss making entities would not last long in his network. “When was the last time we sold one?” quips Mr Cameron.

Profitable or not, each station, is valuable as part of the network, filling a gap in coverage.“There’s a small element among us that likes the map of the empire and where the flags are and what parts are coloured pink,” he says with a smile.

As we relax into the conversation, it becomes more and more difficult to hide the fact that Grant Broadcasters, as well as TRSN’s other networks including ACE and the Super Network are, like SCA, experiencing solid growth on the back of a marked population shift to rural and regional centres. 

What’s more remarkable is that despite the disruptive effect of new digital media carving out around 30 per cent or more of the media spend for itself, radio has maintained it’s historical share of the national ad dollar at around 7.5 per cent. Why? “Because we’ve retained audience. And that’s because we’re local and engaged.” says Mr Cameron. “We really believe in a local medium and that people want to know what’s happening in their city or their town.”

Just to say that the population of Ipswich and Geelong has increased 18 per cent in the last five years is not good enough

Nonetheless, the success of digital media, with its ability to provide advertisers with detailed user metrics, has been a wake up call for what has tended to be a change resistant sector of the radio industry. Apart from the largest of the provincial markets such as Gold Coast, Newcastle and Canberra which have long conducted regular surveys, most regional operators expected clients to take their claim of audience growth on trust. That had to change.

“Three or four years ago we sat down and decided we can’t just say that. We need to prove it,” says Mr Cameron. “Just to say that the population of Ipswich and Geelong has increased 18 per cent in the last five years is not good enough – we need to show our listening audience has increased with that as well. The surveys have given us the confidence to back up the claim that our audiences are growing.”

In 2017, Xtra Insights conducted surveys in 26 regional markets. Of those, eight participated under the current methodology for the very first time.  More than 21,000 people were surveyed in total, and 60 commercial radio stations participated.

SCA was a driving force behind the introduction of surveys to regional markets. “We worked with Xtra Insights in developing the software to take that to the market so people could use it. We monitor closely how many agencies log in and use it. It’s been a real hockey stick. People are using it,” says Brian Gallagher.

“If you want to talk to regional Australia, its not a question of them or us, you need to talk to both of us.

Furthermore he says, “We’re doing most of the heavy lifting and the balance of the radio operators are the beneficiaries of that because when we do a a strong campaign strategy, we drive strong growth into regional then all the operators that fill in the areas where we aren’t get the benefit of that. The regional rebrand where we started to take on our metro personalities of Triple M and Hit was really strong. The rebrand made it easier for the media buyers to understand what we’re selling.”

Mr Cameron acknowledges that TRSN sees SCA as complementary rather than competition. “If you want to talk to regional Australia, its not a question of them or us, you need to talk to both of us. Certainly there’s markets where we offer competing radio stations but even in those markets we’re not offering the same audiences.”

Nonetheless, the SCA brand is top of mind with most city based media buyers, thanks to its huge presence in metro markets. As a result it tends to be the first port of call when those buyers turn to regional radio.

To raise its own profile TRSN has taken out a series of ads in advertising trade media with the premise that you need to make two phone calls if you want to reach regional Australia. “That’s why we’ve been out advertising, to lift our profile just make sure that we’re not missed and to lift the profile of regional radio. We know that 45 percent of people live in regional Australia, outside of the metro markets. But that’s not how the advertising pie is split up nationally,” says Mr Cameron.

Mr Gallagher strongly agrees that national spends on regional radio are “undercooked” which means there’s significant scope to increase revenues.

On the sales side of the business, while TRSN and SCA are seemingly in lockstep – each representing a geographically non-contiguous half of available commercial radio outlets in regional Australia – their content philosophies are very different.

People need choice. I would not want a weak under-investing competitor

Mr Cameron says, “Their (SCA’s) big push, as evidenced to us, is their great belief in the Triple M and Hit brands. And they’ve invested a lot to bring what they see as ‘metro quality’ to regional Australia. 

“We, on our part, have invested in putting people actually in the stations. For instance, when we bought the Prime Network in Queensland, we moved people out of ‘the hub’ on the Sunshine Coast and moved them to Townsville and created new positions in Townsville, Cairns, Mackay, Gladstone and Rocky. 

“We’ve doubled down on the ‘intensely local’ as an investment while its fair to say they’ve doubled down on a national strategy and quality programming. Quality radio is good. People need choice. I would not want a weak under-investing competitor,” says Mr Cameron.

For Grant Broadcasters, “Live and Local” is more than just a positioning statement. To back up their claim that they are part of the community they serve, Grant’s have been buying up property so that their stations are housed in owned premises rather than rented.

In Geelong, for example, they recently bought the small arcade that for many years housed KRock and Bay939 and have redeveloped it into a gleaming new shopping centre.

Local sales have never been better. And with both SCA and TRSN out pitching for more national dollars, the future for regional radio looks very bright.


Peter Saxon




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