Presentation on theme: "RADIO ADVERTISING. ECONOMICALLY SOUND August 2009."— Presentation transcript:
RADIO ADVERTISING. ECONOMICALLY SOUND August 2009
Content Overview Common Marketing Mistakes in Challenging Economic Times Case Study: Myer A Time of Opportunity According to the Experts Key Strategies for this time The Innovation Engine A time for Opportunity on Commercial Radio Commercial Radio Reach & Frequency – A dominant media choice Unique Strengths of Radio Radio in Combination with other Media
Overview Radio is a resilient advertising medium. It has consistently performed well in challenging and uncertain economic times. The innovative and flexible nature of the radio industry leads the way in the development of new opportunities for attracting advertising revenue. Commercial radio has performed well in what has been a competitive and challenging 12 months for all Australian media.
Overview One of the strengths of radio is its ability to be ubiquitous - radio provides information, entertainment and community without interrupting peoples lives. Each week 76% of Australians tune in to commercial radio, listening on average for 2hrs 26mins each day Source: Nielsen Radio Ratings, Average of Five Capital Cities, Survey 1-8, 2008. All people 10yrs+, Monday-Sunday 5.30am-12mn.
Overview Commercial radio provides more opportunities for a message to be delivered and to impact the consumer than any other medium. Across all day parts, an average 1.16million people listen to commercial radio at any one time. Source: Nielsen Radio Ratings, Average of Five Capital Cities, Survey 1-8, 2008. All people 10yrs+, Monday-Sunday 5.30am-12mn.
Common Marketing Mistakes in Challenging Economic Times Radio Advertising. Economically Sound
Common Marketing Mistakes in Challenging Economic Times 1. Cutting the Marketing/Communications budget: Senior executives may be unsure of the value in advertising because it is often difficult to determine return on investment Senior executives may be advised that it is prudent to reduce the marketing budget due to a general perception that a reduction in marketing and advertising will not hurt the company in the short term. 2. Not knowing your customer: In practice advertisers that have a deep knowledge of the customer base and understand lifestyle, demographics and psychographics tend to develop better communication strategies. Developing advertising that appeals to the key customer is crucial to business success
Common Marketing Mistakes in Challenging Economic Times 3. Buying the wrong media This exists as a results of poor media planning. Highly effective media, is media that targets the core customer. Marketing efficiency increases when media is used which commands a high concentration of key customer groups in the audience The media environment chosen will enhance a brand – customers gravitate to media channels that carry content that is relevant to their lifestyle
Common Marketing Mistakes in Challenging Economic Times 4. Forgetting the customers needs Many companies use their advertising to list the attributes of their business. Characteristics like great service are simply expected by customers, therefore may not necessarily enhance the brand image. Good advertising focuses on the potential customer and how a brand benefits them
Common Marketing Mistakes in Challenging Economic Times 5. No unique selling proposition (USP) Customers need a reason to choose one business over another and a USP will help them differentiate.
Case Study: Myer Radio Advertising. Economically Sound
Case Study: Myer Myer Defies the Gloom and Boosts its Marketing Budget Myer has doubled its marketing budget from February 09, for 3 months in to defy the economic gloom and drive traffic to stores. The Strategy The Myer chain negotiated reduced ad rates and bought advertising packages with media companies Seven, Ten, News Limited, Fairfax Media, ACP and Austereo that will carry Myers marketing campaign efforts Myer sourced much of the budget funds from 165 suppliers who have agreed to underwrite half the cost of the campaign. In return, Myer has agreed to buy tens of millions of dollars of extra stock from the suppliers. Source: Simon Canning | February 02, 2009 - Article from: The AustralianThe Australian
Case Study: Myer The Goal the retailer plans to maintain its advertising expenditure following the end of the post-Christmas sales season, luring a series of partners to help underwrite a range of marketing initiatives in the weeks following the launch. Myers marketing program will not be price-driven, as they believed that would undermine sales held later in the year. Promotion and value are instead the focus of the campaign, which will grow in the three month campaign period. The Myer Chain CEO, Bernie Brooks, believes this is a more innovative approach that will keep consumers reaching for their wallets. Source: Simon Canning | February 02, 2009 - Article from: The AustralianThe Australian
Case Study: Myer The Purpose Bernie Brooks CEO said they know their business in the next 6 months is going to drop and in implementing this marketing push, Myer believe it will stop them from dropping further in sales. Myer believe the Marketing push has a risk to it, but also believe there is a bigger risk in not doing it. Source: Simon Canning | February 02, 2009 - Article from: The AustralianThe Australian
A Time of Opportunity Radio Advertising. Economically Sound
A time of Opportunity Companies that view tougher economic times as an opportunity enable themselves to get a leg up on a weakened competitor. Their brand building efforts will see significant gains over time and into the future. One strategy is to approach clients with certainty in a time of uncertainty.
A time of Opportunity In the light of lower interest rates and lower petrol prices coupled with the Government plans to stimulate the economy, consumers may have more money to spend than in recent times. *Global consumer/end user spending is projected to increase from $1.3 trillion in 2007 to $1.9 trillion in 2012, growing by 6.8% compounded annually. *Source: PriceWaterhouse Coopers: Outlook, Australian Entertainment and Media 2008-2012
A time of Opportunity According to the ABS: Australia experienced significant real income growth during the past decade. Between 1997-98 and 2007-08, real net national disposable income per person grew by 2.8% a year on average. Source: Australian Bureau of Statistics, www.abs.gov.au.
A time of Opportunity PWC projections in Advertising – 2009-2013 Global consumer/end user spending is expected to grow from $974 billion in 2008 to $1.3 trillion in 2013 increasing on average by 5.3% per annum Global advertising is expected to increase slightly from $516 billion in 2008 to $517 billion in 2013. Radio is seen as a medium that is able to embrace and integrate new technology such as the internet and podcasting and now with the launch of digital radio Source: PriceWaterhouse Coopers: Outlook, Australian Entertainment and Media 2009-2013
Consumers look to brands for reassurance Despite financial uncertainty in 2008, most Australian consumers claim to have spent the same amount or more across the festive season than they did the previous year, according to new research, by the Australian Centre of Retail Studies (ACRS). ACRS revealed there is optimism among Australians for the year ahead, with more than two thirds of respondents expecting their households financial situation to either remain the same or improve this year. Source: B&T Today, marketing, advertising, media, PR. January 13 2009 http://www.bandt.com.au/dirplus/images/bttoday/newsletter/13_01_2009.pdf Australian Centre of Retail Studies - http://www.buseco.monash.edu.au/centres/acrs/ A time of Opportunity
According to the Australian Retailers Association (ARA) there was a 2% increase on the 2007 Christmas period ($36.5 billion). ARA research among key sector retailers shows Christmas sales for 2008 were as follows: 2008 National Christmas retail sales: $36.95 billion (projected $37.2 billion) National category breakdown: Food $14.78 billion, Department stores $2.96 billion, Apparel $2.59 billion, Household $6.28 billion, Hospitality $4.8 billion and Other $5.42 billion. Source: Australian Retailers Association, 2009. A time of Opportunity
According to the ABS Retail Trade Trends report: The seasonally adjusted estimate decreased by 1.4% in June 2009. This follows an increase of 1.0% in May 2009 and a revised increase of 1.0% in April 2009. Chains and other large retailers increased by 9.2%, while the estimate for 'smaller' retailers increased by 5.7%. Source: Australian Bureau of Statistics, Retail Trade Trend Report, June 2009, 8501.0, www.abs.gov.au.
A time of Opportunity Consumers look to brands for reassurance People will continue to spend in challenging economic circumstances, but they want to be sure that they are spending wisely. Advertising that demonstrates the benefit and value of a brand will continue to be effective as consumers look to justify their purchases. Advertising effects Economic growth Advertising is the engine for economic growth. It stimulates innovation and provokes competition; both are contributing factors to economic growth
According to the Experts Radio Advertising. Economically Sound
According to the Experts Despite all the doom and gloom, many experts are saying Australia is doing much better than the rest of the world. Australia is reliable trading partner with a healthy banking system Limited exposure to the subprime mortgage market. Australia has a stable system of government and A good welfare safety net that stops the kind of poverty seen in America. Source: International affairs and social commentator, Keith Suter, as seen on Ch7 Sunrise Monday 4 th May 2009.
According to the Experts According to Harold Mitchell, chairman of Mitchell & Partners, who has been through four downturns in his 40-plus years in business and says he has learned two things. 1. they start 2. they finish According to Mitchell, the worst of the fall is over and we are on the way up again. Of course, there will be bumps along the way out of this and, like every downturn, there are still plenty of bruises that have to work their way out of the system. Source: Excerpt from The Age April 30 th 2009, Harold Mitchell
According to the Experts According to CommSec Chief Economist, Craig James: Australia may get lucky and avoid a recession in 2009 Australian banks were in a better financial position than the US and Europe, and had a higher exposure to the domestic market. No other country has received the same economic boost from all three factors - Government spending, lower interest rates and a cheaper Aussie dollar The Reserve Bank has cut interest rates by 400 basis points since September, taking the cash rate to a 45 year low of 3.25 per cent. Article, Australia could avoid a recession say economists, AAP, Daily Telegraph, February 23 rd 2009.
According to the Experts According to the Reserve Bank: The Australian economy had been "more resilient than other industrial economies'' in response to the global financial crisis. The substantial measures taken, like the Government Stimulus packages would help to cushion the economy from the contractionary forces coming from abroad and, over time, work to establish conditions conducive to stronger demand later in the year. The flow through to lending rates from previous rate cuts had been "much more effective in Australia'' compared with many countries. Reserve Bank of Australia minutes, news.com.au, Article by Jordan Chong, Feb 2009, February 17 th 2009
Key Strategies for this Time Radio Advertising. Economically Sound
1. Aggressive advertising Maintain your planned level of advertising while your competitors are cutting back. Maintain continuity to sustain awareness; advertising works cumulatively. People forget rapidly without frequent reminding. Concentrate to dominate. Dominance is the product of impact and frequency. It can be achieved most efficiently by concentrating advertising by medium, by market, by target audience Consumers are looking for strength and stability and brands need to inspire this belief in consumers. Key Strategies for this Time Source: The Cahners Advertising Research report (#2000.5), The Role of Advertising in Uncertain Times,
2. Strong brand management (brand success) Development of corporate management policies to cope with the uncertain environment Product innovation Control over distribution channels Management of price-value relationship and justification of the premium brand Key Strategies for this Time Source: Through The Loop, www.throughtheloop.com/brand
Key Strategies for this Time 3. Strategy and positive results: Focus on core brand values Accentuate the positive Maintain or increase share of voice/advertising presence Innovative use of media / increase media efficiencies Relationship marketing Building corporate brands
Key Strategies for this Time 4. Commitment to brand advertising: Three reasons to maintain, or increase, advertising spend 1. less clutter in traditional media means more chance to stand out; 2. brand advertising makes a product/service stand out. While everyone else is cutting back, there must be a good reason why youre still going strong. Success breeds success; 3. brand advertising supports direct response. Brand advertising increases awareness, name recognition and the effectiveness of direct marketing efforts
The Innovation Engine Radio Advertising. Economically Sound
The Innovation Engine What do Microsoft, MTV, and the iPod have in common? These great brands were born during recessions - FedEx: 1973; People Magazine:1974; Microsoft: 1974; CNN:1980; MTV: 1981; iPod: 2001, Wikipedia:2001 And therein lays the point everyone seems to be forgetting in the midst of the current economic slowdown. A downturn can be a good thing for businesses and brands. It provides a time for opportunity - and the funds - to innovate and get a substantial leg up on the competition. Source: BusinessWeek The Innovation Engine: The Upside of Recession by G. Michael Maddock and Raphael Louis Vitón, 2008
The Innovation Engine Cutting funds back across a company or business can demoralize its employees and instill a sense of instability. Brands will not gain a competitive edge doing the same thing as everyone else It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share, and return on investment at lower cost than during good economic times. Great companies and great executives don't abandon their growth strategies in light of temporary setbacks. They attack aggressively, while everyone else is pulling back. Source: BusinessWeek The Innovation Engine: The Upside of Recession by G. Michael Maddock and Raphael Louis Vitón, 2008
A time for Opportunity on Commercial Radio Radio Advertising. Economically Sound
A Time for Opportunity on Commercial Radio Radio remains the most personal of media; it is interactive, live, local, human and omnipresent. It provides genuine entertainment, an opportunity to hear new music and access instant information
A Time for Opportunity on Commercial Radio The radio industry is embracing emerging technologies to continue to foster its close relationship with listeners and to complement existing radio technology. Radios place as part of peoples everyday lives means Commercial Radio continues to thrive. Radio is embracing and using technology to cement its relevance.
A Time for Opportunity on Commercial Radio Radio can greatly extend coverage and frequency among key groups Across 2008 Commercial radio attracted an average cumulative audience of 8.79 million (76%) of all people in metropolitan areas each week during 2008. This figure was a 55,000 increase over 2007,when 8.74 million people tuned in on average each week. On average, Australians spent 17 hrs 02mins per week listening to commercial radio during 2007, or 2hrs 26mins per day. 65% of radio listeners only listen to commercial radio Source: Nielsen Radio Ratings, Average of Five Capital Cities, Survey 1-8, 2008. All people 10yrs+, Monday-Sunday 5.30am-12mn
A Time for Opportunity on Commercial Radio The frequency of radio ads can jog the memory to reinforce the message. Radio allows advertisers to extend the frequency of the message to achieve specific objectives.
A Time for Opportunity on Commercial Radio The 2008 midnight to dawn survey also shows that radio has increased its relevance among young people despite the presence of other media platforms such as the Internet, iPods and interactive television. Source: Midnight to Dawn Source: Nielsen Radio Advisor, Survey 6, 2008, Mon-Sun 12MN-5.30am, All people 10yrs+ unless otherwise stated.
A Time for Opportunity on Commercial Radio Source: Nielsen Panorama, Survey 2 Fused Metro 12mthly database (Apr 2008 – Mar 2009) and Nielsen Radio Ratings, Survey 1-8 2008, Monday to Sunday 5:30am-12midnight, all people 10years+, unless otherwise stated.. Commercial Radio listeners Food shopping habits Across 2008, in an average week Commercial radio reached 76% of Grocery Buyers. That is 8.79million different grocery buyers each week tuning into Commercial Radio Of commercial radio listeners 45% avoid processed food wherever they can 50% like to try new food products 50% buy wholegrain food whenever they can 50% buy high-fiber food whenever they can 60% enjoy food from all over the world 35% say that the most important food consideration is all natural foods 54% enjoying cooking
A Time for Opportunity on Commercial Radio Source: Nielsen Panorama, Survey 2 Fused Metro 12mthly database (Apr 2008 – Mar 2009) and Nielsen Radio Ratings, Survey 1-8 2008, Monday to Sunday 5:30am-12midnight, all people 10years+, unless otherwise stated.. Commercial radio listeners Grocery Shopping Habits: Of commercial radio listeners 62% have visited a supermarket in the past month 59% have an average weekly spend of $20-$199 per week 32% visit a supermarket once a week Commercial radio listeners Clothes shopping habits: Of commercial radio listeners 35% try to look stylish at all times 57% take care in their appearance at all times 76% have visited a department store in the past month
A Time for Opportunity on Commercial Radio Source: Nielsen Panorama, Survey 2 Fused Metro 12mthly database (Apr 2008 – Mar 2009) and Nielsen Radio Ratings, Survey 1-8 2008, Monday to Sunday 5:30am-12midnight, all people 10years+, unless otherwise stated.. Commercial Radio Listeners and Cafe habits Of commercial Radio Listeners 43% visit a café on a weekday 80% of commercial radio listeners aged 18-54yrs have breakfast at a café on a weekday 35% visit a café on a weekday between 9AM and 5PM 57% of commercial radio listeners 25-39yrs visit a café during these hours And 53% among those 40-54yrs
Commercial Radio – a dominant choice Radio Advertising. Economically Sound
Commercial Radio Reach & Frequency – a dominant media choice Radio can greatly extend coverage and frequency among key groups Across 2008 Commercial Radio attracted an average cumulative audience of 8.79 million (76%) of all people each week during 2008. This figure was a 55,000 increase over 2007, when 8.74 million people tuned in on average each week.
Commercial Radio Reach & Frequency a dominant media choice Breakfast is the most listened to session. Almost 6.7 million people tuned into commercial radio during breakfast in 2008 during which time commercial radios average reach is 61% of all Australians. The frequency of radio ads can jog the memory to reinforce the message. Source: Nielsen Radio Ratings, Average of Five Capital Cities, Survey 1-8, 2008. All people 10yrs+, Monday-Sunday 5.30am-12mn.
Commercial Radio Reach & Frequency – a dominant media choice Place of Listening Commercial radio travels with audiences. A highly portable and flexible medium, commercial radio acts as a companion to listeners, delivering timely and relevant messages. Source: Nielsen Radio Ratings, Average of Five Capital Cities, Place of Listening, Monday to Sunday 5.30am-12mn, Survey 1-8, 2008
Commercial Radio Reach & Frequency – a dominant media choice Radio allows advertisers to extend the frequency of the message to achieve specific objectives. Source: Nielsen Radio Ratings, Average of Five Capital Cities, Place of Listening, Monday to Sunday 5.30am - 12mn, Survey 1-8, 2008
Unique Strengths of Radio Radio reaches virtually everyone in many environments Radio cuts through An anywhere, anytime medium Targeting Pulse of the community. Consistent all year round Influential Cost Effective Flexibility Strong call-to-action A competitive medium
Radio in Combination with Other Media Radio Advertising. Economically Sound
Radio in Combination with Other Media Radio Complements Internet Radio and the Internet can be consumed simultaneously. Radio is the best medium to direct people to web sites for more detailed information Radio adds a strong emotional profile to an Internet message. Radio and Online Research In 2007 Commercial Radio Australia commissioned TNS to study the effectiveness of radio advertising in combination with the internet to understand how Radio and Online work together as a powerful media duo
Radio in Combination with Other Media Radio and Online Research cont. Headline findings: Over 80% of people who hear a relevant radio commercial referring to a website have visited a website as a result.
Radio in Combination with Other Media Radio and Online Research cont. Headline findings: Visits to a consumer website nationally increased by 25% following the campaign Commercial radio generated 11% more visits to a study partners webpage following the campaign period A finance brand generated a 145% increase in page impressions during the campaign For one finance client, completed online applications increased 94% during the campaign
Radio in Combination with Other Media Radio / On Line Fast Facts Of commercial radio listeners: 91% access the Internet daily 96% access the Internet at home 63% search for information on products online 51% access the internet weekday mornings, 54% afternoons 23% listen to the radio 56% access news/ current affairs online 43% search for travel information online Source: Nielsen Media Research Panorama Fused Metro Survey 9 2008, (Nov 07 – Oct 08), All people 14yrs+ unless otherwise stated. Panorama utilises a 100% Online Methodology
Radio Complements Television Radio and television are logical partners with radios strength across the day, when stores are open, complementing the branding qualities of a television campaign in the evening. Radio reaches mobile people where television cannot and radio listeners are station loyal as well as program loyal. Radio in Combination with Other Media
Radio Research – Radios Advantage – Advertising Effectiveness Study Released in 2006, a Millward Brown radio advertising effectiveness study showed that radio, used in combination with television, produces better results than using television alone. It involved reallocating 20% of a television advertising budget to radio and measuring the increase in brand awareness and sales. Radio in Combination with Other Media
Radio and television are logical partners with radios strength across the day, when stores are open, complementing the branding qualities of a television campaign in the evening. Radio in Combination with Other Media
Radio Research – Radios Advantage – Advertising Effectiveness Study Headline Findings Reallocating 20% of a television budget to commercial radio has been proven to increase brand awareness by 22%. Even among well-known brands, reallocating 20% of a television budget to commercial radio has been proven to increase brand awareness by 6%. Even among well-known brands, reallocating 20% of a television budget to commercial radio has been proven to increase sales by up to 15%. Radio increases purchase intention by 13%; consumers exposed to the radio creative showed an increase in intention to purchase by 13% compared to those exposed to television only. Radio in Combination with Other Media
Radio Research – Radios Advantage – Advertising Effectiveness Study cont. Headline Findings cont. The iconic, well known food brand used strongly tested, branded creative concepts for their radio implementation to extend the branding concept developed in the television campaign. Results showed that the radio execution improved consumer response to TV execution. Radio creative drove up overall enjoyment of the TV advertising by 14%. Radio in Combination with Other Media
For more information on any of the topics covered in this presentation, visit www.commercialradio.com.auwww.commercialradio.com.au Or contact Batoul Alamein firstname.lastname@example.org, 02 9281 6577 email@example.com