Q&A with ARN’s Ciaran Davis: Will radio come out of this lockdown stronger than last time?

Editor & Content Director

ARN’s CEO Ciaran Davis believes – economically at least – this round of lockdowns isn’t are dire as 2020. He says for the rest of the year, he’ll be focusing on the health and wellbeing of his staff, rather than any financial targets – but does concede consolidation is on the horizon. 


VK: The market doesn’t seem to be suffering as much compared to when we spoke this time last year. You’re not having to implement stand down orders and whatnot. So what is different this time around?

CD: I think consumer confidence. Spending and advertiser spending on the back of that is an awful lot different to what it was 12 months ago.

We were entering into a world of unknown last year. Nobody knew much about any sort of virus or COVID or the impact or how long it was going to be. I think that had a direct correlation in terms of commutes and then that had a direct correlation in terms of advertisers’ willingness to spend on radio, which is why we saw that huge level of cancellations for a three, four-week period in April and May of last year.

But what we’ve since seen is that – not Melbourne, obviously, Victoria – but the rest of the states had a pretty good run from sort of September to October, November, January, February, March onwards. People began to see that yes, there were infringements on the normality of their life, but overall, it wasn’t too bad.

We’re in a bad place at the moment because of the Delta strain, because we haven’t got a vaccination program really up and running – well we have it up and running now, but it was late to be up and running – but I think it’s really important that people see that there is a way out of this, and actually the answer is vaccinations.

And I watched the Premier League soccer back in the UK over the weekend. Every match I saw had full stadiums – 59,000, 60,000 people.

You see Covent Garden in London, you see New York. I’ve got friends who are flying on overbooked flights throughout America and Europe. Europeans are going on holidays. And it’s because they reached the threshold of 70 and 80% vaccinations and that’s allowed them to do it.

And yes, you think in the UK it’s got 30,000 cases a day, but it’s carrying on as normal, because the hospitalisations are way down.

VK: And so, is this result of yours for this half-year then actually a good standalone result, or is it just because last year was so dire?

CD: It’s a bit of both, to be honest.

So last year was dire, so you would expect good, strong growth coming through.

I think what we have to do as an industry is look at 2019 as the benchmark level to get back to, and we’re getting close to that.

As an industry we’re doing an awful lot to come together to make sure that we promote the power of radio, and its extension into other audio channels that we’re all beginning to offer. The SME sector is a good sector of advertising for radio and some of them are struggling. Equally, others have adapted business models and we’ve seen new advertisers come on board.

But I think 2019 has to be the benchmark we want to get back to, and will we get back to it this year. Certainly up to eight weeks ago I thought we would, and now I go ‘I think we could’, but it does depend on the extent of the lockdowns, particularly as we come into that retail Christmas period.

But you can imagine, everyone is just itching to get out, and when that happens, I think we will see a very, very quick return to advertising.

VK: And so how will you define success for HT&E/ ARN for the full calendar year? What do you want to achieve when you announce your full-year results?

CD: I’m not really looking at financial targets.

I think from our perspective, our core radio business is doing very, very well. We have a very strong pool of talent that’s delivering good ratings. We’re winning share which is good. Our commercial strategy to market is working, and we’re rolling out a new Connections presentation at the moment as we speak.

In a few weeks’ time we’ll be launching a new audio planner, which will aim to track the creative to be used in different audio environments and at what time and where it’s best to use that. And that will be quite proprietary, so we’re looking forward to that.

We’re a number of workstreams under way with iHeartRadio and with other brands that we have that we’ll be announcing over the next five, six, seven weeks, I would say in quarter three, and ultimately then I think a return to advertising should we come out of lockdown to sort of 2019 levels.

On top of that, I think it’s really important that our staff stay very positive. So we are investing a fair bit in terms of cultural driving programs, technology enhancement programs, health and wellbeing programs, because at the end of this, although people don’t see it, we will come through a stronger, better company ready for 2022.

VK: And Hamish McLennan flagged that there is going to be further consolidation in the industry and said you are in a good position given your balance sheet to jump on that. You’ve spent quite a lot of time offloading your non-core audio assets. So, why would you then diversify out again when you’ve spent so much time focusing on that core audio?

CD: Well, I think two things there.

Firstly, our broadcast radio and digital audio business is in very good shape. And I think there’s a real opportunity to grow that business, particularly in digital audio over the next two to three years.

The strength of our balance sheet means that we’re in a very strong position to be able to invest in new areas like technology, like sales capability, like podcasting, content creation, and we will be absolutely focused on growing that sector, because listening is not [being taken] from radio, it’s being enhanced and adding to it. And indeed I think there’s a significant opportunity targeting digital revenues, which account for about 50% of the ad market in Australia.

So this is a new commercial opportunity for us, that is very early in its infancy. We have a lot of learning still to do. There’s a lot of audience still to be captured. But I think it’s absolutely a growth area for this business in the next two to three years. And with the balance sheet that we have, then yes, we are going to focus on investing in that area. I think our shareholders would want us to do that.

In terms of broader media consolidation,I have a very strong view, the board have a very strong view, that there are four things that media companies in the future will need to have, and that’s scale, multi-platform content delivery, ease of trading, and an increasing bank of addressable IDs.

And all media companies are trying to do that at the moment, but I think successful ones and ones that can start capturing revenue from the likes of Google and YouTube and Facebook and Instagram and Snapchat will need to offer that at an accelerated pace.

So I think there will be, when, who knows – a lot of people are trying to get back to where they were pre-COVID and that will be, I think, a focus for the next 12 months – but there will be consolidation in the market if you want to tackle that bigger share of revenue that’s out there.

VK: You also said you’d made a substantial investment with the launch of a new Breakfast show in Melbourne. So what will success look like for that show? How long do you want to give it to find its feet?

CD: I mean Breakfast shows, as we know, take a while to get up and running. It’s obviously unusual to launch a Breakfast show mid-year as well. PJ, perfectly understand why she would want to go back too New Zealand, but really happy with the lineup that we pulled together. And Lauren is a really good talent. But it’s an unusual time to launch a Breakfast show.

Having said that, I’d like to see how they’re going by the end of the year, and we certainly have aggressive plans into 2022.

But the station is more than just the Breakfast show. We know the music content is good. We know the brand is good. We know Will & Woody are good. So I have high hopes. I think it’s a really strong Melbourne show with good Melbourne personalities, and a lot of new personalities that are quite Melbourne coming into the show as well.

VK: And is there any end in sight for the dominance of Kyle & Jackie O Show in Sydney?

CD: I don’t think so.

I did say in the presentation today that their longevity is enduring and long-lasting.

They’re very good at regenerating and bringing new audiences in. We’ve also seen that the likes of the ‘Get Vaxxed Baby’ video that Kyle did actually connects with audiences and can drive an agenda. And that element of trust and that element of connection is something really powerful for advertisers to take notice of and tap into.

VK: And just finally on iHeartRadio, what are your plans for the growth trajectory of that platform?

CD: It’s a magnificent distribution platform for us.

We’ve got a lot of content in there. 86% of people researched want all their audio content in one place – radio, music, podcasts.

So we’re very pleased with the growth that we’re getting. It’s really strengthened our digital and data capabilities.

We’ve brought in an awful load of new people who have expertise in growing distribution channels in digital environments, in personalisation, in on-boarding, in marketing strategies and customer creation and growth strategies, and that’s been magnificent to see over the six months how our business is really transitioning from being broadcast radio to being broadcast radio and digital audio and a digitally-enabled business.

But certainly for us, iHeartRadio is a magnificent distribution platform that we’ve got a lot of plans coming through [for]. You’ve seen we’ve launched TikTok [Trending]. We’ve just announced an MTV [channel]. We’ve got two or three other big distribution partnerships to announce between now and the end of the year.

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Miss
26 Aug 2021 - 6:49 am

I, and others before me, left ARN Melbourne because of mental health issues.

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