Matt Payton, CEO, Radiocentre, writes about how 2024 has delivered a fresh start – and some familiar challenges for radio.
As we enter the second half of the year, it feels like the perfect time to review industry progress across the first half of 2024 and preview what the remainder of the year has in store for commercial radio.
Of course, this year the world of politics and business has been dominated by the general election and the changes in government and in parliament. This has added to a sense of new beginnings, even if many of the issues are familiar.
One thing that was clear from the election, as well as the result, was that radio and podcasts played a bigger role than ever in providing trusted coverage and analysis. The value of this was brought to life in our latest research that highlighted the way audiences of all kinds rely on commercial radio to stay informed.
For the radio and audio sector, it was a relief to see the Media Act pass through parliament just before the election. Thanks to strong cross-party and industry support it was able to complete its final stages at the end of May. As a result, access and availability of UK radio on voice assistants will be secured, while outdated format regulation is swept away. This will help deliver growth and innovation, along with real benefits for listeners. The fact that the new government supported this legislation while in opposition also gives us confidence that its implementation should be a relatively smooth process.
Another familiar issue this year has been the role, remit and funding of the BBC. In the commercial sector we know that competition with the BBC is a fact of life. However, the significant funding the BBC receives comes with obligations for its services to be distinct and a responsibility to compete fairly.
Using the might of the BBC to launch new radio services that seek to imitate commercial radio, while at the same time reducing investment in distinctive BBC Local Radio, seems at odds with its public service ethos. We have made sure the BBC and Ofcom, as the independent regulator, are aware of our concerns. There is still a long way to go, but we have welcomed Ofcom’s initial decision to at least block the launch of the Radio 2 extension on BBC Sounds and refer it to a full Public Interest Test.
More broadly the new government will need to finalise its position on BBC funding in the next couple of years (before 2027). While it’s early days, the signals on this are encouraging with less talk of alternative funding models – such as advertising, which analysis suggests could damage both the BBC and commercial media – and more focus on stability. And as hundreds of new MPs get to grips with their new roles, we are also working on new research on the trusted nature of commercial radio news, to further demonstrate its public value role.
In the months ahead, there are definite reasons for optimism. Audience figures for commercial radio remain incredibly strong, reaching a record 39.7 million people each week. Revenues are also up year-on-year and moving in the right direction, increasing by more than 5% in the first half of 2024. This bodes well for the rest of the year, as does the latest IPA Bellwether Report, highlighting the growth in available marketing spend for media.
Interestingly, radio (in common with other media) is benefiting from increased revenue from advertisers and brands born online in recent years, many of which are much more focused on short-term businesses effects and performance.
This shift was part of the reason why Radiocentre conducted the Performance Multiplier study, launched in May. This latest take on radio effectiveness highlights how the impact of radio ads is being underestimated by current performance attribution analysis, demonstrating the medium’s efficiency in driving short term web response (when correctly attributed) and the additional brand-building benefits that the medium delivers in parallel. The findings have been well-received and we have already started the process of building on this momentum by investing in analysis of additional campaigns to advance understanding of radio’s effects, which will be shared with advertisers.
We’ll have more updates on revenues and the work we are doing to drive greater investment in commercial radio later in the year, including at our Tuning In conference on 17th September. This year’s conference is already shaping up to be one of our best ever, with the Capital Breakfast Show team making their first appearance since the arrival of Jordan North.
You can sign up to the conference HERE. I look forward to seeing you there.
