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How Will Radio Win Back its Revenue?

BPR recently asked a number of radio companies how the Coronavirus lockdown had impacted on their business, how they are dealing with the initial impact and their plans for the coming year.

Our feedback came from a variety of radio groups including Western and Eastern Europe, Russia and Australasia, and highlighted a number of themes and ideas on how radio stations are working through these difficult times.

1. How has the COVID-19 pandemic impacted radio and other media advertising?

Although many surveys continue to show that radio listening is increasing, all of the stations surveyed confirm that advertising has suffered greatly, with many advising that current business has been impacted between 50% and 75% as cities and countries have gone into lockdown.

In Russian speaking territories stations confirmed that advertising has fallen by as much as 70% with many advertiser’s budgets shrinking to ‘microscopic’ levels. In Australasia the greatest impact has been on local advertising as businesses closed for lockdown however increased advertising expenditure from Government and other health related agencies has assisted National advertising revenues. Stations in Western Europe are reporting similar trends with various German stations reporting falls in revenue of around 50% compared to the same period as last year. In Eastern Europe stations have reported declines in the April-May period of between 50% and 70%. All these figures show a common trend among the stations we surveyed and seems that these falls in advertising revenue are widespread and relatively consistent market to market.

2. How have you adapted your approach in dealing with and assisting existing clients during the pandemic?

Despite the impact on advertising, stations are adapting to the changing situation and are taking pro-active steps to help rebuild their business.

Among a range of activities, stations included; smarter and better use of available inventory – using available time through discounts and bonuses for advertisers who maintain campaigns during the lockdown period. Producing free commercials for local advertisers to incentivise the use of radio. A number of companies have introduced new Media ‘Funds’ pooling advertising across all station platforms both broadcast and digital that would be available for both current and new clients.

A common theme emerging highlights the importance of regular and close communication with clients and associates. With many clients welcoming the additional contact and support. German stations Radio ffn, Hitradio Antenne1 and Star FM, all confirmed that one of their most important priorities has been maintaining personal contact with its customers and the agencies.

Being Proactive with Bounce Back & Boost Plans… in New Zealand, radio in local markets are coordinating quarterly business plans that segment customers into categories and levels of impact. Sales advisors can better develop specific product, price approaches to each of these segments to help them and encourage them back on air.

Some positive listening trends are also appearing, Radio Gong, Munich, reports rating and listening increases as many people at home looking to be informed as much as possible on the changing situation, in some cases stations are seeing up to 60% more usage in April, “We provide these figures and ideas for our clients .. to convince them that advertising in radio is now more effective than ever. The claim that ‘radio is nearly the last mass medium in the market with more than 90% reach every day – even in younger target groups’ – is more correct than ever.”

Internet radio streaming has increased by as much as 20% in Germany, while traditional radio stations with local news and info have increased by 27%.

3. Are you still having face to face client meetings (new or potential) or has there been an increase in the use of platforms such as Zoom and Skype?

Predictably, all stations said they are now conducting all meetings remotely. With many not having had a face to face meeting with clients since March of this year. While many stations are uncertain exactly how long this model is expected to last, there are stations reporting positive feedback regarding this change of client meeting format. Stations have found, that remote meetings, and sales staff working remotely have had positive impacts for both clients and the station sales teams.

4. Have there been new business opportunities for radio as a result of the crisis?

Despite the heavy social restrictions currently in place, some stations are actually seeing new opportunities arise. Hitradio Antenne1, Germany, and MediaWorks in New Zealand report additional campaigns for Government including; ministries (social, health) or institutions from the health sector (search for nursing staff).

Radio Gong, Munich also report additional campaigns from several departments of the national and regional governments, but still the government messages are very much regulated by law. New business opportunities have come from Telco’s (internet providers), grocery stores, food-delivery companies and streaming services.

Some larger retailers have modified their campaigns from P.O.S. (Point of Sale) to the promotion of their online shopping platforms and services.

A large retail chain has used their “Morning Show sponsorship” to implement a “thank you” campaign for their employees.

GPM Radio, Moscow advises that new categories are becoming more visible against the backdrop of a decrease in the activity of the main industries (car dealers and pharmaceutical companies). New categories of advertisers are much more active in contact and are ready to consider special offers, combined projects and digital integrations.

5. Are you redefining the creative content for client messages as a result of the pandemic?

Many stations are re-shaping content to focus more on the changes that have occurred as a result of the pandemic. With a stronger focus on people at home, advertising highlights delivery, online purchase and the safety of using services or goods.

Stations have also had to be more creative with sales and advertising promotions. With VTV, Belarus aiming to focus on customer communications highlighting security, contactless delivery and payment, disinfection and other USPs that are most important to consumers today.

Radio ffn, Germany, identify their main objective as understanding the client’s perspective to find solutions together with their customers. This may include finding solutions and compromises, so that the business doesn’t lose contact with their customers.

Despite the shutdown and social distancing, consumers don’t stop shopping, but just use different channels. For retailers and brands, it is important not to lose contact with their customers.

6. Has the emphasis on Sales development changed, for example more Sales and Promotion campaigns rather than just advertising?

Many report not seeing any significant changes so far.

Hitradio Antenne1, Germany, – “We have developed special offers that have a very promotional character and are also well priced. We will see in the next few weeks whether we can implement these campaigns with our customers. The same applies to sponsorships, special forms of advertising or P.O.S. Actions. However, we assume that special times need special creativity and after the “restart” we will take the briefings of our top customers very carefully into account. We therefore assume that more program space outside of the advertising block will be released for commercial communication.”

Radio FFN, Germany. “The aim is to enhance brand experience through promotional activity or games. It takes courage for this kind of advertising in times of crisis, because at this time it is difficult to find the right balance between a proper brand marketing and a promotional game. Often because of this sensitive situation many advertisers are currently refraining from promotional games and special forms of advertising in general. Currently we are working on communicating the gradual opening of the retail sector. This is achieved with concise communication, e.g. with a message like “Customers XY – We have opened again”.

7. Are there aspects of the changed operating environment for the sales team which have been positive?

Remote meetings have generally been quite beneficial and are producing good results. Some companies are also finding that the use of CRM systems in connection with remote working have been quite efficient also.

MediaWorks NZ: “So far we have conducted video webinars with thought leaders including a Leading Economic Adviser, a CEO of major Media company in China and a Crisis Management expert with more to come …these are available to our entire customer base and we also ask them to forward this on to colleagues. Following the webinar we conduct live on-air interviews on our talk back formats, and through podcasts. We have also increased our level of communication with bespoke messages by market going out from local market GM’s weekly, coordinated centrally via our Trade Marketing team”

8. Do you envisage longer term implications for radio sales strategy post-Pandemic? For example – focusing on different retail/service industry categories or client communication or the agency/direct revenue mix.

Many of the stations we surveyed agreed that while they will be working with reduced demand for the time being, they can see many changes ahead. Infomedia, Russia, said that the long-term consequences will concern small budgets for placement and careful selection of the target audience by the client, even within the framework of one radio station. There will also be more coordination with digital including website and streaming and social networks. GPM Radio, Moscow, report that customer categories and sales approaches are likely to change. Sales forces using an account approach will have to take a few steps back and adapt their structures, business processes and motivation systems to changing conditions. While VTV, Belarus, stated that they forecast a significant increase in direct sales in 2020, due to the fact that some advertising agencies have already announced the suspension of radio sales for the second quarter of 2020, and do not give any forecasts for the third quarter.

Industry Coordination: MediaWorks NZ
“At an industry level we are coordinating with our competitors to encourage an industry wide “Support Local” message. The idea been for advertisers to reduce spend on Facebook / Google etc and to increase spend with local media unless local media can not reach a specified audience segment. This is translating into pressure on the government to do the same. We are also working via the Comms Council (Industry Body for Agencies) and ANZA (Industry Body for advertisers) to pool our resources and align on key areas, such as cancellation policies etc. We are also looking to utilise our combined Research & Insights teams to activate surveys, questionnaires etc to understand the sentiment of both consumers and advertisers post lockdown to help stimulate appropriate advertising and provide some level of certainty to the type of activity we are likely to expect.”

One of the main Take Aways from this survey is the amazing level of adaption and resilience that radio stations have shown in dealing with this crisis. Stations are looking at new opportunities that are arising and ways to open new doors. Successful radio stations didn’t waste time dwelling on what was lost but immediately focused on what to gain. The ability to move forward is the key for survival in any industry and radio has shown its great ability to respond and adapt.

Our thanks to,

Stephan Offierowski, Sales Director, Hitradio Antenne1, Germany,
Daniela Lenz, Sales Director National Sales, Radio ffn, Germany,
Bertram Schwarz, Star FM, Berlin, Germany,
Igor Chernyshov, CEO, TAVR Media, Kiev, Ukraine,
Yaroslav Fomin, COO – “Infomediabusiness” radio holding, Kurgan, Russia,
Alexey Zyatitsky, Sales House Director, GPM Radio, Moscow,
Alexander Ozhinsky, COO, VTV-Radio, Minsk, Belarus,
Johannes Ott, CEO, Radio Gong, Munich, Germany,
Andreas Lang, CMO, Radio Gong, Munich, Germany,
Glen Kyne, Commercial Director, Mediaworks, New Zealand.

for their contributions.