SCA sales chief says Covid audience habits are sticking, backs digital boom and tech investments to pump up volume
While linear radio revenues face headwinds, Southern Cross Austereo is backing booming digital audiences (up 58%) and revenues (up 50%) to move the dial. Sales boss Brian Gallagher also predicts further big increases in advertisers using its in-house dynamic creative services. Meanwhile improvements in buying platforms, measurement, transparency and attribution are pumping up the volume, convincing blue chips and SMEs that their dollars are well spent.
What you need to know:
- In-stream advertising revenue up 112% in the 2020 financial year, broader digital growth now at 50% year on year
- Close to 90% of digital advertisers are national and blue chip clients, remaining 10% predominantly larger SMEs.
- SCA increased digital sales headcount 30% since Covid hit.
- Sales boss Brian Gallagher says the channel has become catalyst for “major change” across sector, driving investment in joint platforms.
- Some progress on measurement and attribution, but more work required to avoid “money being left on the table”.
- Gallagher claims big client demand for dynamic creative solutions, as brands seek segmented and geo-targeted ad solutions.
- Predicts “hundreds” of advertisers will use SCA's dynamic creative service in 2021, up from 24 brands this year.
“Digital radio has been a catalyst for growing client demand for better measurement across the entire industry - and we are starting to see that by not having that in place we’re leaving money on the table.”
Silver linings playbook
As for most industries, 2020 has been tough for radio. Though audiences have increased during Covid, there is industry-wide frustration that growth has not been reflected in revenue.
Across the sector, linear advertising revenue for the five capital cities dropped 28% for the first quarter of FY21. Although a significant improvement on the 47% crash for the final quarter of FY20, it suggests the road to recovery may be a long haul yet.
However, Southern Cross Austereo Chief Sales Officer, Brian Gallagher, says the rise of digital audio advertising presents a significant silver lining - while audience habits are sticking beyond lockdown.
SCA’s revenue from in-stream advertising grew by 112% for FY20. Across all digital audio – including podcasting, digital audio catch-up and live in-stream - year on year growth stood at 50%.
As a result of “sustainable client demand” SCA has increased its digital sales headcount by 30%, says Gallagher.
“Covid certainly tipped the scales and saw a lot of people shift listening habits at home and on different devices. However, even with the return to work commencing across the country (with the exception of Melbourne), the trend has continued to grow,” Gallagher told Mi3.
“Audiences are up 58% year-on-year in the digital audio space, with hundreds of advertisers now working with us to utilise our in-stream and podcast inventory.”
Most advertisers using SCA digital audio are made up of blue-chip and national brands, roughly 90%.
The remainder are larger and more “digitally advanced” SMEs. While Gallagher says the SME sector, hard hit by Covid, continues to act as a drag on overall ad revenue, he expects them to migrate to streaming audio over the next two years.
“At the moment agency-led clients are the ones driving the growth because they are already well versed in emerging and mainstream digital channels,” Gallagher says.
“But it won’t be something dominated by ‘the big end of town’ forever, because even SMEs that work with us in a traditional broadcast sense are looking to find more targeted means of talking to customers.
“If they have a customer base located in the western suburbs of Sydney for example, they can dump more spend into geo-targeting that area and increase ROI as a result. That’s where they will eventually derive value.”
“Digital radio isn’t immune to transparency, attribution or ad fraud issues but we are in the unique position of being able to work collaboratively as networks and with agency partners to avoid having these pitfall slow down the process.”
Better measurement, more growth
Gallagher says the boom in digital audio audiences is taking place in tandem with industry investment to improve trading, measurement and attribution. He thinks the combined effect will act as a catalyst for sustained growth where revenues increase in step with listeners.
SCA has already launched two of its own attribution and measurement products to meet the changes to the traditional diary method used by CRA and data provider GFK.
SCA Footsteps measures footfall attribution to digital audio campaigns, while SCA Soundcheck provides campaign and brand effectiveness studies specifically for digital audio.
Using smartphone location data, Footsteps gives advertisers insights on listeners who have heard an audio ad and then gone to a specific location, retailer or precinct as a result within a measured timeframe.
Soundcheck uses tracking and retargeting to identify listeners who heard an ad and hit them with a campaign study questionnaire, allowing comparison to a control group of internet users who have not heard the ad.
Gallagher says clients haven’t lost sight of the reach of traditional broadcast radio but are increasingly asking for more segmentation, adding a need for more “tangible measurement”.
“Digital radio has been a catalyst for growing client demand for better measurement across the entire industry - and we are starting to see that by not having that in place we’re leaving money on the table,” Gallagher says.
“Across all media, the conversation around attribution and transparency continues to mount and by working with the CRA on a hybrid model of digital and linear we can get out in front of the issue and provide a better trading experience.”
CRA and the major networks are working on a solution and this week launched the briefing stage of the collective RadioMATRIX ad-buying platform.
The launch means media buyers can brief multiple radio networks on their campaigns simultaneously through a single, cloud-based platform.
The next stage of development, the proposal module, is now underway and will enable broadcasters to respond to briefs and submit and manage media proposals with individual or multiple media agencies concurrently.
Gallagher thinks the platform will turbocharge growth while addressing some industry-wide issues.
“We’ve got a real opportunity here to get on the front foot and leapfrog a lot of the issues that have plagued other media,” Gallagher says.
“Digital radio isn’t immune to transparency, attribution or ad fraud issues but we are in the unique position of being able to work collaboratively as networks and with agency partners to avoid having these pitfall slow down the process.
“This is all due to radio's rapid scale over the Covid period. As far as we see it, the medium will only continue to reach new heights.”
Gallagher is equally bullish on the prospects for SCA's dynamic creative services division, which handles in some instances upwards of 300 variants of a single brand creative.
Currently, the network has 24 advertisers utilising the service to its full extent, however, Gallagher expects this to reach the hundreds in 2021.
“We’ve experienced a lot of different client briefs that have looked to narrow down on particular locations, interests and more,” Gallagher says.
“What our creative services department can do for brands continues to evolve with the level of investment. We’ve changed creative based on weather, news and even sporting teams winning games.
“Those creative extensions, when executed and clearly attributed back to sales through our own platforms such as Footsteps only further the level of cut-through and ROI clients get with digital audio campaigns.”
Specsavers head of market and planning, Shaun Briggs, needed a big brand hit to kick-start life after Covid. MAFS was hardly love at first sight. But it quickly grew – literally – as the brand, its agency AJF Partnership, and Nine’s Powered creative unit delivered a bespoke integration within weeks. For Briggs, “it’s been an eye opener”.