RADIO LET DOWN BY POOR DATA: It's a case of 'show me the performance figures then you get the budget' for the misunderstood and neglected radio medium across much of Asia

<p>Radio is often viewed as the greatest missed - some say neglected - </p><p>opportunity in advertising. For a medium with an arguably greater reach </p><p>than any other, with substantially lower costs to the consumer than </p><p>television or print, it has still to come into its own. </p><p><BR><BR> </p><p>A combination of variable quality programming, limited promotional </p><p>opportunities and a failure to properly extol the virtues of radio to </p><p>advertisers, backed up by reliable statistics on audience figures, have </p><p>left Asian media buyers feeling distinctly lukewarm about the medium. So </p><p>when Virgin and Star both announced major initiatives earlier this year </p><p>- the former launching a regional radio service, with the latter </p><p>launching India's first private FM radio station - the market sat up. </p><p>Did this signal the start of a new push for radio in Asia? </p><p><BR><BR> </p><p>"Radio's potential for truly connecting with a person is incredibly </p><p>strong, in some cases more than TV," says Julia Singleton, regional </p><p>director of CIA Communications Channel Planning in Singapore. "You have </p><p>to sit and watch TV. With radio you can be listening to it in the car </p><p>but it can consume you. It's something you can get very involved with. </p><p>Because it's an immediate trigger medium you hear lots of 'buy now' </p><p>style of advertising, but it has greater potential for communicating </p><p>brand values and personalities." </p><p><BR><BR> </p><p>Adrian King, director media research and strategic planning at MediaCom, </p><p>reasons that pretty much all product categories are suitable to the </p><p>medium, though it is not conducive to any sophisticated forms of </p><p>brand-building. </p><p><BR><BR> </p><p>"Radio doesn't build brands. Radio builds frequency to awareness," </p><p>argues King. "It stimulates recall and awareness, The only emotive, </p><p>intrusive system that builds brands is TV. But if I had a brand that </p><p>needed constant top of mind and not much brand building, then radio is </p><p>ideal." </p><p><BR><BR> </p><p>But radio is perceived by many as the poor relation to TV when it comes </p><p>to allocating budgets, or dreaming up compelling creative executions, </p><p>largely because the ad industry has failed to get its creative head </p><p>around the medium, says Singleton. "Creatively, it is hugely </p><p>misunderstood," she says. "The way stations' ad sales teams may be </p><p>marketing air time has not been particularly creative or flexible. What </p><p>you tend to see is rigid or staid sponsorship packages, not creative </p><p>executions that are integrated into the editorial." </p><p><BR><BR> </p><p>The arrival of Virgin on the scene across the region may do something to </p><p>change that. It has teamed up with US venture capital firm ChinaVest, </p><p>which is taking a 25 per cent stake in the operation, to launch Virgin </p><p>Radio Asia, a regionally branded service with localised content, across </p><p>all major markets in Asia ex-Japan over the next year. Virgin is still </p><p>in discussions with advertisers in the key markets it has identified to </p><p>launch into sometime in the first quarter of 2002. </p><p><BR><BR> </p><p>According to Jason Keiles, senior vice-president, business development </p><p>at Virgin Radio (Asia), the company will be hitting Greater China, </p><p>Taiwan and Thailand first, with India hopefully following sometime in </p><p>the next quarter. </p><p><BR><BR> </p><p>Virgin is capitalising on its belief that there is not enough </p><p>differentiation between radio networks in Asia which leaves a gaping </p><p>hole for a well-known brand to deliver consistent programming across </p><p>multiple, local language radio stations. Even in relatively mature radio </p><p>markets such as Thailand or the Philippines, which attract comparatively </p><p>sizeable portions of ad revenue, that has still not yet been achieved, </p><p>argues Keiles. </p><p><BR><BR> </p><p>"Thailand is a more competitive market than others but we believe </p><p>there's no differentiating factor and we believe there is untapped </p><p>potential," he says. </p><p><BR><BR> </p><p>Virgin is planning to target 18-34 year olds - the 'trendy, young and </p><p>hip' sector, that advertisers are most gunning for. Not surprisingly, </p><p>one of the key factors that Virgin believes will be in its favour in </p><p>winning them over is the power of its brand. </p><p><BR><BR> </p><p>"Asia represented an opportunity for us because either current providers </p><p>aren't providing a compelling enough product or there isn't a compelling </p><p>enough brand to draw the customers in," says Keiles, adding that in a </p><p>lot of cases the programming quality has been poor which has resulted in </p><p>low listener figures. "In a lot of these stations, there's no format, </p><p>DJs will play whatever they want to play. So why are listeners going to </p><p>tune in when they don't know what they are going to get?" quips </p><p>Keiles. </p><p><BR><BR> </p><p>News Corp-owned Star TV has also recently debuted its own FM radio </p><p>service in India, and now runs the country's very first privately-owned </p><p>24-hour FM radio station, FM Radio City, based out of Bangalore. The </p><p>early signs have been very promising. In the space of five months it has </p><p>notched up two million listeners, around 50 per cent of Bangalore's </p><p>population, following an aggressive marketing push by Star. "Two months </p><p>ago it was around 38 per cent," says Star Radio chief operating officer </p><p>Sumantra Dutta. "Growth is taking place very rapidly." </p><p><BR><BR> </p><p>Furthermore, the time spent listing to radio has increased from 50 </p><p>minutes at the time Star launched to two hours 40 minutes a day </p><p>currently. And in terms of advertisers, Dutta says Radio City has more </p><p>than 190 brands on air, split evenly between local advertisers and </p><p>multinational brands like Levers and Procter & Gamble, though he admits </p><p>there is still a steep learning curve with regard to how advertisers </p><p>perceive the medium. "We are having to go into the big advertisers and </p><p>show them how radio advertising works," he says. </p><p><BR><BR> </p><p>In terms of the total ad dollars spent for January and June 2001, </p><p>ACNielsen found that the Philippines and Australia were head and </p><p>shoulders above the rest of the region, with the Philippines taking in </p><p>six billion pesos (US$116.3 million) and Australia banking </p><p>A$217.8 million (US$113.3 million). </p><p><BR><BR> </p><p>The next largest in line is South Korea which attracted 93 billion won </p><p>(US$72.4 million), followed fairly closely by Thailand which </p><p>pulled in just under 2.5 billion baht (US$56.2 million). </p><p>Comparatively Hong Kong and Singapore trailed behind with US$48.7 </p><p>million and US$24.5 million in that same period. </p><p><BR><BR> </p><p>The spread is equally as wide looking at the proportion of total adspend </p><p>allocated to radio compared to TV, print, cinema, outdoors and so </p><p>on. </p><p><BR><BR> </p><p>Hong Kong overall has the lowest allocation to radio at only 2.7 per </p><p>cent of total ad spend in that period, with South Korea and Malaysia </p><p>placing 3.3 per cent and 3.7 per cent of their budgets on radio </p><p>respectively. </p><p><BR><BR> </p><p>The clear leader again is the Philippines, which put a whopping 18.3 per </p><p>cent of its ad spend into the medium, with the remaining surveyed </p><p>markets hovering in and around the six to nine per cent range. </p><p><BR><BR> </p><p>The markets that are generally seen as having the most potential in Asia </p><p>are those that have a strong existing radio culture - mainly those with </p><p>national radio stations with heavy ownership of the mainstream radio </p><p>audience such as Thailand and the Philippines, which has around 370 </p><p>commercial radio stations and low TV penetration, making radio a </p><p>top-of-mind media buy. </p><p><BR><BR> </p><p>According to OMD, the ad expenditure on radio in Thailand has increased </p><p>by 20 per cent every year since 1999. And there are definitely signs of </p><p>growth elsewhere around the region. Malaysia has seen a 23 per cent </p><p>growth over the last year in advertising revenue, according to OMD, and </p><p>Singapore saw a 42 per cent growth over last year, increasing its </p><p>overall share of the advertising pie from five to seven per cent. </p><p><BR><BR> </p><p>Despite Hong Kong's relatively poor figures, it has attracted a large </p><p>proportion of ad spend from certain sectors such as movies and </p><p>entertainment and mobile communications and equipment providers. Equally </p><p>in Taiwan - one of Virgin's key markets - radio's main income is derived </p><p>from the major record labels, with its top five advertisers all falling </p><p>into that category. </p><p><BR><BR> </p><p>"Looking at all those Taiwan advertisers, it makes a lot of sense for </p><p>Virgin to create its own media vehicle in markets like Taiwan where they </p><p>have good distribution," says Peter Allen, director of communication </p><p>insights, Asia at OMD. "If you've got all those record companies </p><p>advertising on Taiwan's radio stations, there's a lot of clutter and </p><p>Virgin can cut through that clutter." </p><p><BR><BR> </p><p>MediaCom's King argues that the ratio of allocated ad expenditure to </p><p>radio versus other mainstream media is not that out of whack with more </p><p>mature markets such as the UK, though he does admit that Asia's radio </p><p>industry has not done itself any favours by failing to provide proper </p><p>reporting procedures. The last time there was a piece of syndicated </p><p>research on the industry in Hong Kong, for example, was in 1997 in a </p><p>survey conducted by ACNielsen. </p><p><BR><BR> </p><p>"In mature markets such as the UK, the requirement for measuring the </p><p>effectiveness of your adspend is very high," he says. "You have to give </p><p>ROI on every ad dollar you're spending at the moment." </p><p><BR><BR> </p><p>If that information is not readily available, or reliable, he argues, </p><p>then advertisers cannot be expected to allocate greater proportions of </p><p>their adspend, particularly in current market conditions, where every </p><p>dollar counts. The main sticking point for media planners, he says, is </p><p>the lack of proper syndicated research on the radio market. </p><p><BR><BR> </p><p>Commenting on the Asian radio station owners, King remarks: "They are </p><p>really doing themselves a disservice by not providing that performance </p><p>information". Part of the problem, he says, has been that the media </p><p>owners in many markets want to use different forms of research, making </p><p>the formation of a universally-agreed upon research currency difficult </p><p>to say the least. </p><p><BR><BR> </p><p>And until media owners take more of a responsibility to introduce </p><p>greater transparency on a consistent basis alongside their competitors, </p><p>then effective radio research will remain in the doldrums. </p><p><BR><BR> </p><p>"Media owners, who have to foot 99 per cent of the bill, can't agree on </p><p>the methodology," says King. "In Hong Kong, RTHK wants diaries, Metro </p><p>wants CATI (computer assisted telephone interview)." </p><p><BR><BR> </p><p>OMD's Allen though warns that bearing in mind current market conditions, </p><p>neither media owners nor agencies are going to be rushing out to spend </p><p>the necessary amount of money to get a proper independent research body </p><p>set up. "Right now, there's such a pressure on budgets, it's really hard </p><p>to be arguing for more money to do this. It's a tough sell </p><p>internally." </p><p><BR><BR> </p><p>Star's Dutta says that Radio City has no immediate plans to initiate a </p><p>syndicated research body in India, for reasons of cost mainly, though </p><p>also for practical reasons of lack of competition in the FM arena. </p><p><BR><BR> </p><p>"Research is expensive," says Dutta. "In the short to medium term, I </p><p>don't think there will be any syndicated research here. For that to </p><p>happen, we need to have more radio stations launching." </p><p><BR><BR> </p><p>However, from a client and a media buyer's perspective, without those </p><p>crucial statistics, Asian radio's share of the advertising pie isn't </p><p>going to get much bigger anytime soon. As MediaCom's King says: "If they </p><p>provide me with performance figures, they get budgets, it's that </p><p>simple." </p><p><BR><BR> </p><p>ERICSSON HOLLERS AWAY FOR INDONESIA'S BEST OF BEST PRIZE </p><p><BR><BR> </p><p>How can a brand stand out with a radio commercial? Music's an obvious </p><p>choice, but tunes can get easily lost among the hours of music </p><p>programming radio offers. So Ericsson chose the cacophony of yelling and </p><p>bawling. </p><p><BR><BR> </p><p>And it walked off with the Best of Best prize at this year's Citra </p><p>Pariwara Awards in Indonesia. </p><p><BR><BR> </p><p>The radio spot, entitled 'Sayangku' (love you) was created for </p><p>Ericsson's teen market. According to the brand, it made sense to grab </p><p>their attention with a boisterous, no-nonsense spot. Yasmin Ahmad, </p><p>executive creative director of Leo Burnett Kuala Lumpur, one of the </p><p>judges for the awards, dubbed Sayangku as unique. </p><p><BR><BR> </p><p>RADIO VS TOTAL ADSPEND (JAN-JUN, 2001) </p><p> YOY YOY </p><p> (total) (radio) </p><p>Country Radio Total % %** %** </p><p>Australia (Adollars million) 217.8* 2,900.3 7.5 - 45.4 </p><p>Hong Kong (HKdollars million) 380.3 13,637.6 2.7 16.7 10.3 </p><p>Korea (Won, billion) 93 2,770.4 3.3 23.8 44.9 </p><p>Malaysia (Rm, million) 54.3 1,465.4 3.7 24.4 19.8 </p><p>New Zealand (NZdollars million) 73.2 822.2 8.9 4.9 5.3 </p><p>Philippines (Peso, million) 6,068.5 33,033.1 18.3 17.3 16.2 </p><p>Singapore (Sdollars million) 45.1 750.5 6.0 23 23.4 </p><p>Thailand (Baht, million) 2,498.6 25,968.2 9.6 23.9 23.0 </p><p>* YOY change based on local currencies to eliminate foreign exchange </p><p>impact </p><p>** YOY growth 1999-2000 figures </p><p>SOURCE: ACNielsen Media International </p><p><BR><BR> </p>