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Deep Dive

Russel Howcroft and Nine Radio boss Tom Malone on why media's the most ruthless of Howcroft's career, advertiser age bias and the inside account of Alan Jones' final curtain

By Paul McIntyre - Executive Editor

14 September 2020 5min read

Russel Howcroft (left) and Tom Malone: "25% of Australia's population are over 55 - and they have got 50 per cent of the country's wealth. There is lots of money there for advertisers to go and get.”

By Paul McIntyre - Executive Editor

14 September 2020 5min read

Russel Howcroft says media is the most ruthless industry, consulting the most influential but advertising the smartest. Nine Radio’s new boss Tom Malone, meanwhile, spills the beans on how Howcroft left PwC to join 3AW’s breakfast slot and the overhaul he’s unleashed at Nine Radio to skew younger and address advertiser bias against older, lucrative audiences in radio. Malone says it's a 10 year plan of regeneration, so no freak-outs when the first radio ratings since COVID land later this month. He tells a very different story around Alan Jones and his exit from 2GB and argues advertisers need to drop 25-54 demos and follow the money to higher-spending 35-65 year olds - can commonsense prevail?    

Check out the podcast with Russel Howcroft and Tom Malone below:

 

Walking the talk

Of all the industries he has experienced, former Y&R brands CEO, Network Ten executive general manager and PwC chief creative officer Russel Howcroft says media is the most ruthless. So he only has himself to blame for jumping into the hot seat at 3AW, with Nine wielding cold steel since taking full control of Macquarie Radio late last year.

With the “first wave” of surgery now complete, Nine Radio managing director Tom Malone says it’s a case of proving and monitoring results as Nine attempts to retain older audiences (minus some of their favourite big, old names), while attracting a younger generation to talk radio. Not to mention converting media buyers from their apparent FM reverie.

No mean feat, but Malone, a former Today and 60 Minutes producer and latterly Nine’s director of sport, is confident that the plan will survive first contact with the ratings – and ultimately secure a bigger share of brand budgets.

No stranger to controversial decisions (Malone had a big hand in Nine flicking the cricket for tennis), he does however, want to set the record straight over Alan Jones’ exit.

“When I took over, the first person I went to see was Alan Jones. He was pretty honest. He said, 'listen, Tom, I'm 78. I don't know how long I'll keep doing it. I've got two years to run. Let's see what happens'.”

- Tom Malone, managing director, Nine Radio

Alan Jones: The inside story…

Jones, says Malone, neither jumped nor was pushed. Rather than the reported $20m commercial fallout from the Jacinda Ardern “sock” incident, or an aversion to risk from his new employers, Malone suggests time simply caught up with the man who for decades revelled in delivering unfiltered opinion to Sydney’s largest radio audience, and riding out the consequences.

As Malone puts it:

“When I took over, the first person I went and saw was Alan Jones. For 30 years he's been the most important person on the station in terms of his ability to bring in audiences and advertising,” says Malone.

“There had obviously been some pretty heavily publicised quarrelling with the former management, so I wanted to make sure he knew we supported him. But he was pretty honest. He said, 'listen, Tom, I'm 78. I don't know how long I'll keep doing it. I've got two years to run. Let's see what happens'.”

Then the bushfires hit, which meant Jones didn’t get a Christmas break, says Malone, followed by Covid-19, which meant he didn’t get a break at Easter. As he turned 79, Jones was isolated at his farm for ten weeks.

“I think it gave him pause to reflect. He had a week off for some health concerns [Jones was hospitalised and off air with neck and back issues in 2016 and 2018] and the doctors said pretty clearly to him, ‘it's silly to keep doing this. It's going to be detrimental to your health’.

“So he requested that we have a chat. He said, ‘I think I should finish up sooner rather than later’, and we were able to make that happen. We were able to send Alan off really well, and we're really proud of that,” says Malone. “He's done a lot for this business over a long period of time. So a huge amount of respect for Alan and what he's done.”

Jones, replaced at 2GB by Ben Fordham, promptly joined Sky News.

“The opportunity that PwC gives you ... there's not very many doors you can't walk through. It enables you to have conversations which I always wanted to have, but don't necessarily get to have when you're in the advertising world or indeed in the media world.”

- Russel Howcroft, presenter, 3AW

The wooing of Russel Howcroft

As one stalwart hung up his boots in Sydney, another retired in Melbourne. John Burns had notified the new owners in December that he aimed to finish up at 3AW in July after the Tokyo Olympics, when he turned 75.

While the games fell victim to Covid, a door opened for Russel Howcroft, who admits he “lay back in bed” fantasising about taking the gig when Dean Banks left the breakfast show some two decades earlier.

Back then, Howcroft was just starting out on ABC's Gruen Transfer, and bar a weekly slot talking about ads on local radio, had no real experience.

Fast forward 20 years and Howcroft has had some career – chief exec of Y&R, executive general manager of Network Ten, and latterly chief creative officer at PwC.

Rather than a creative figurehead atop a phalanx of billing artillery, Howcroft suggests the consultancy gig was everything he expected – and provided opportunity to influence the very top table of Australian business.

“Having that job, chief creative officer, meant I was readily in boardrooms speaking to CEOs about the importance of creativity in driving their success,” says Howcroft.

“The opportunity that PwC gives you ... there's not very many doors you can't walk through [including, reportedly, the PM’s office]. It enables you to have conversations which I always wanted to have,” Howcroft adds. “You don't necessarily get to have them when you're in the advertising world or indeed in the media world. But you do get to have them when you're in that world.”

All the same, consultancies are in a world of post-Covid pain.  And when the opportunity arose to live out the one-time fantasy, Howcroft took it.

“Success has many fathers,” says Malone, before laying paternal rights at the door of Howcroft’s manager, Mark Klemens, MD of Melbourne agency, Profile Talent Management.

“We were having a catch-up in February [pre-Covid], talking about successors and Mark said ‘I think Russel would be perfect’,” says Malone. “I knew him from Gruen, from his work at Channel Ten and his incredible background in both media and marketing made him the perfect fit.”

But fundamental to landing the gig was Howcroft’s A-grade Melburnian credentials. 3AW is “unashamedly parochial”, says Malone. “You have to be all-in on Melbourne – and Russel is all-in on Melbourne …So I thought ‘what a great idea’. And it all went pretty quickly from there.”

Now, rather than lie back in bed and dream, Howcroft gets live out his fantasy at 4 A.M. every weekday morning.

“We’re seeing the end of a long generation of very successful broadcasters. But what that means is the audience has grown older with them as well, and we've ceded ground to a lot of the music stations - who are really doing talk shows in breakfast. So we needed to re-establish ourselves.”

- Tom Malone, managing director, Nine Radio

Ruthless cuts or essential pruning?

Of all the industries he as experienced, Howcroft says consultants hold the most influence. Advertising is both the smartest and the hardest sector to crack, he suggests, but media is the most ruthless.

Nine has certainly made some changes since taking over Macquarie’s assets. But Tom Malone, while instrumental in ringing the changes and rolling the dice on a younger skew since taking the helm late last year, baulks at the suggestion Nine embodies Howcroft’s experience.

It’s all part of a long-term plan, says Malone, which will live or die on its ability “to retain our existing audience while opening ourselves up to a younger audience”. The hope is that shift will also improve its trade marketing position and start bringing in more money. Hence shaking up the shows, back office and talent roster.

“We’re seeing the end of a long generation of very successful broadcasters. But what that means is the audience has grown older with them as well, and we've ceded ground to a lot of the music stations - who are really doing talk shows in breakfast,” says Malone. “So we needed to re-establish ourselves, because what we do better than anyone is local, relevant, contextual content.”

Bringing in Howcroft is one piece of that puzzle, says Malone, “but there have been significant changes across the network: Moving Dee Dee Dunleavy into afternoons in Melbourne. We've got [3AW] nights back with Denis Walter in Melbourne. In Sydney, the only show that's the same is Ray Hadley in the mornings, we've got new breakfast, afternoon, drive, sport, money, nights,” Meanwhile Nine has launched a new breakfast and drive shows in Brisbane.

“So for an industry that doesn't like change, it's been significant,” says Malone. Nine, he says, thinks it has “got the balance right” in keeping its existing audience while bringing in fresh blood in order to take audience and dollars from FM coffers.

“This is a 10-year plan. There will be a period of unsettlement, no doubt, as people adjust. The aim is to retain most of the existing audience but also grow the audience. Share will bounce around a little bit - but that's what happens with share.”

- Tom Malone, managing director, Nine Radio

No pain, no gain

All that change will take time to bed in.  But Malone is not unduly concerned about the next set of radio ratings on 29 September. He accepts that there will be bumps along the way.

“This is a 10-year plan. There will be a period of unsettlement, no doubt, as people adjust,” says Malone. “The aim is to retain most of the existing audience but also grow the audience.”

Cumulative audience (cume) and time spent listening (TSL) are the key metrics for radio ratings.

“Hopefully we will pick up a little bit of cume, we might drop a bit of TSL, share will bounce around a little bit - but that's what happens with share,” says Malone. “So I am hopeful that we will remain the number one stations in Sydney and Melbourne and that we continue to improve in Perth and in Brisbane.”

“The 25-54 demographic was set up 40 years ago when people were having kids, getting married and a mortgage at 25 - and then apparently stopped spending at 54. Now nobody can afford a house in their twenties. 35-65 is what advertisers need to start looking at.”

- Tom Malone, managing director, Nine Radio

Brands and agencies buying 25-54 are stuck in the eighties

While Nine is attempting to get younger listeners tuning in to talk radio, Malone says the oldies should not be thrown out with the bathwater – and that media buyers need to think beyond the outdated 25-54 demographic envelope.

“The 25-54 demographic was set up forty ago when people were having kids, getting married and getting a mortgage at twenty five. Then at fifty four they apparently stopped spending because they retired,” says Malone. “Now, no one can afford to get married or buy a house until they're thirty five. The discretionary spend of our listeners - especially between the age of fifty five and sixty five - is huge,” he adds. “35-65 is what advertisers really need to start looking at, because people are still making significant purchases right through that period of their lives.”

Nine must also succeed where Macquarie failed in addressing media buyers’ preference for FM over AM, something the Singletons and former Macquarie chair Russell Tate long lamented. How confident is Malone that Nine can change minds?

“I think we can,” says Malone.

“In the agency groups there is significant bias against talk radio. We probably only get five or six per cent share of the agency money up until Nine took over, whereas in direct we're getting twenty five per cent share of the market. So what does that tell you?”

Malone suggests it says a lot about people who spend other people’s money versus the people who control their own purse strings and who are “watching every dollar”.

“Can we address it? Yes, I think so. The whole strategy of where Nine's been going is to move away from being a TV business to being a content business so we can now go to an advertiser and have a chat about offering a whole of marketing solution across TV, radio, digital, publishing, print, so we can provide that 'whole of experience' for the advertiser and make their dollar go harder and faster for them,” says Malone.

“So I think by leveraging Nine's other assets and making radio part of that consideration, I think we will have an impact on that bias that has been there.”

Russel Howcroft agrees the bias is there – but he thinks positioning talk radio as part of a full suite of audience options will deliver success where others have failed.

“Nine is a sophisticated sales engine. It’s got the relationships with the big media agencies, the big media buyers planners.” 3AW’s numbers are solid, he says, “It just needs to be sold better”.

As such, brands and agencies can expect a charm offensive over the next 12 months.

‘Better trade marketing has got to be a significant part of what Nine does with regard to talk radio,” says Howcroft. “A headline number which says it all is that 25% of Australia's population are 55 and over - and they have got 50% of the country's wealth. There is lots of money there for advertisers to go and get.”

 

Losing signal amid the noise?

Given talk radio is now one piece of a much bigger picture at Nine, is there a risk of it getting buried in the mix?

Malone says not.

“That won’t happen and we have been very clear about that. It is not a ‘fries with that’ selling model. It’s about, ‘this is your product. This is where we think budget should be best spent across radio, TV, print, digital’. We can have a ‘whole of marketing’ conversation with the brand,” says Malone.

Russel Howcroft says brands are increasingly returning to reach as the “critical measure” to spur growth, “and a mix of media is how you get that reach”.

“The advertisers have changed their thinking on what are critical factors, certainly in my recent consulting experience that's the case,” says Howcroft. “One-plus reach is critical - and that requires a mix of media.”

 

Check out the podcast with Russel Howcroft and Tom Malone below:
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