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

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

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