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
