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					 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
Radio Advertising. Economically Sound




         OVERVIEW
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 people’s 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.
Radio Advertising. Economically Sound



  Common Marketing
     Mistakes in
     Challenging
   Economic Times
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.
Radio Advertising. Economically Sound




         Case Study:
            Myer
    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 Myer’s 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 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.

       Myer’s 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 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 Australian
Radio Advertising. Economically Sound




          A Time of
          Opportunity
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
A time of Opportunity

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 household’s 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
Radio Advertising. Economically Sound




      According to the
         Experts
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 4th 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 30th 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 23rd 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 17th 2009
Radio Advertising. Economically Sound




   Key Strategies for
       this Time
  Key Strategies for this Time

   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.

Source: The Cahner’s Advertising Research report (#2000.5), The Role of Advertising in Uncertain Times,
  Key Strategies for this Time

   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




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 you’re 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
Radio Advertising. Economically Sound




       The Innovation
           Engine
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
Radio Advertising. Economically Sound




       A time for
     Opportunity on
    Commercial Radio
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.
 Radio’s place as part of
  people’s 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

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 (Apr 2008 – Mar 2009) and Nielsen Radio Ratings, Survey 1-8 2008, Monday to Sunday 5:30am-12midnight,
Source: Nielsen Panorama, Survey 2 Fused Metro 12mthly database
all people 10years+, unless otherwise stated.
A Time for Opportunity on Commercial
Radio

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


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.
A Time for Opportunity on Commercial
Radio

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



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.
Radio Advertising. Economically Sound




 Commercial Radio –
  a dominant choice
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 radio’s 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 Advertising. Economically Sound




        Radio in
     Combination with
       Other Media
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.



                       19%
                                              Have visited a website
                                              as a result of hearing a
                                              radio commercial

                                              Have never visited a
                                              website as a result of
                                              hearing a radio
                                              commercial
                               81%
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 partner’s
     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 in Combination with Other Media

Radio Complements Television
•  Radio and television are logical partners with radio’s 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 – Radio’s 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 radio’s 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 – Radio’s 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 – Radio’s 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%.
 For more information on any of the topics covered in this
  presentation, visit www.commercialradio.com.au
 Or contact Batoul Alamein
  batoul.alamein@commercialradio.com.au, 02 9281 6577

				
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