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RADIO ADVERTISING. ECONOMICALLY SOUND 2009 Content Overview Common Marketing Mistakes in Challenging Economic Times Case Study: Myer A Time of Opportunity Key Strategies for this time A time for Opportunity on Commercial Radio

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Content

  • Overview

  • Common Marketing Mistakes in Challenging Economic Times

  • Case Study: Myer

  • A Time of Opportunity

  • Key Strategies for this time

  • 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



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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.


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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.


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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.


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Radio Advertising. Economically Sound

Common Marketing Mistakes in Challenging Economic Times


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Common Marketing Mistakes in Challenging Economic Times

  • 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.

  • 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


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Common Marketing Mistakes in Challenging Economic Times

  • 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


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Common Marketing Mistakes in Challenging Economic Times

  • 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


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Common Marketing Mistakes in Challenging Economic Times

  • No unique selling proposition (USP)

    • Customers need a reason to choose one business over another and a USP will help them differentiate.



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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


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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


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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



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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.


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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


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A time of Opportunity

According to the ABS:

  • Australia experienced significant real income growth during the past decade.

  • Between 1996-97 and 2006-07, real net national disposable income per person grew by 2.9% a year on average.

Source: Australian Bureau of Statistics, www.abs.gov.au.


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A time of Opportunity

  • PWC projections in Advertising – 2008-2012

  • Global advertising is projected to increase by 6% compounded annual rate during 2008-2012 period, rising to $760 billion in 2012, from $567 billion in 2007.

  • Radio advertising is forecast to grow 3% in 2009 and 3.2% in 2010 respectively and in the full forecast period to 2012, a CAGR of 3%.

  • The market will be characterized by spikes occurring during the even-numbered years related to advertising associated with the Commonwealth Games (in 2010) and to advertising associated with the FIFA World Cup.

    Source: PriceWaterhouse Coopers: Outlook, Australian Entertainment and Media 2008-2012


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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/


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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.


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A time of Opportunity

According to the ABS Retail Trade Trends report:

  • The seasonally adjusted estimate increased by 0.2% in January 2009. This follows increases of 3.8% in December and 0.4% in November 2008. December 2008 had the largest monthly.

  • In seasonally adjusted terms: Food retailing (+1.5%), Clothing and soft good retailing (+0.8%), Other retailing (+0.2%) and Cafes, restaurants and takeaway food services (+2.3%).

Source: Australian Bureau of Statistics, Retail Trade Trend Report, January 2009, 8501.0, www.abs.gov.au.


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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


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Radio Advertising. Economically Sound

Key Strategies for this Time


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Key Strategies for this Time

  • 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,


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Key Strategies for this Time

  • 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


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Key Strategies for this Time

  • 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


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Key Strategies for this Time

  • Commitment to brand advertising:

    • Three reasons to maintain, or increase, advertising spend

      • less clutterin traditional media means more chance to stand out;

      • 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;

      • brand advertising supports direct response. Brand advertising increases awareness, name recognition and the effectiveness of direct marketing efforts


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Radio Advertising. Economically Sound

A time for Opportunity on Commercial Radio


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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


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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.


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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


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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.


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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.


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Radio Advertising. Economically Sound

Commercial Radio – a dominant choice


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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.


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Commercial Radio Reach & Frequency a dominant media choice 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.


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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


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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


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Unique Strengths of Radio choice

  • 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


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Radio Advertising. Economically Sound choice

Radio in Combination with Other Media


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Radio in Combination with Other Media choice

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 commissionedTNS 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


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Radio in Combination with Other Media choice

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.


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Radio in Combination with Other Media choice

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


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Radio in Combination with Other Media choice

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


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Radio in Combination with Other Media choice

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.


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Radio in Combination with Other Media choice

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.


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Radio in Combination with Other Media choice

  • 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.


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Radio in Combination with Other Media choice

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.


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Radio in Combination with Other Media choice

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%.


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  • For more information on any of the topics covered in this presentation, visit www.commercialradio.com.au

  • Or contact Batoul Alamein [email protected], 02 9281 6577


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