What you need to know:

• First Radio 360 survey via hybrid panel – diaries, streaming data and new wearable meter technology – shows roughly one in five listeners of radio do so via streaming.
• New system kicked off three months late, amid some concerns around lumpy numbers.
• But radio execs say no haggling to get the “right” numbers after shift to mostly digital diaries and listening devices to pick up streaming.
• Media buyers suggest total audio numbers will change the way they plan and buy. But they want faster, deeper post-analysis reporting. Measuring podcasts, slated for next year, is what will really move the needle.
• HT&E boss Ciaran Davis thinks that functionality will enable Australian radio networks to strike back against “free-kicking” Spotify.
• After de-duplicated reach, effectiveness should be main aim.
• Passive listening wearables may ultimately be used to measure broadcast too.

Not so late show

Radio’s new rating system kicked off this week – three months late, but seemingly without any major swings in reach that some radio execs had feared could cause commercial headaches from early reads of the hybrid system, which combines panels and wearable listening ‘bracelets’ to wrap in deduplicated audio streaming alongside broadcast.

Radio executives didn’t deny that there had been teething issues with the initial ratings thrown up by the panel, largely ironed out over the last quarter. There was no sign of 15-30 per cent shortfalls in digital audio capture using the new combination of e-diaries, passive recording via wearables and the radio networks’ own server data that some executives had privately mooted ahead of the initial planned launch in March. If anything, some streaming numbers, particularly some of the AM stations, swung the other way.

Ultimately, three months delay is less than half that in bringing the IAB’s new hybrid online digital currency to market, and a blink of an eye compared to TV’s Voz system, finally launched last month. Radio-audio publishers now have a system that promises de-duplicated reach across broadcast and streaming with a better idea of the kind of devices being used to stream. De-duped podcast measurement is set to be rolled in next year.

Media buyers say the industry had to evolve measurement or lose share of advertiser budgets. Next, both radio networks and advertisers want to push beyond reach and into better measuring of effectiveness. Meanwhile, GfK suggests that the passive listening wearables could soon start to measure broadcast radio as well as streaming.

How it started

Advertising on radio has always had an Achilles heel when compared with its broadcasting siblings – audience measurement. For decades, the sector relied upon a small army of 50,000 listeners to mark down details of what radio programs and times they consumed each day into a diary.

This method of “recall measurement” left the radio sector open to criticism from rival media channels that had more sophisticated measurement, and it’s easy to imagine why.

For avid listeners of radio celebrities like Kyle and Jackie O, the recall method may prove accurate, but for light radio consumers, who channel flick or are inconsistent in their listening habits, recalling what you consume each day can become a laborious exercise in guesswork.

Ad buyers weren’t always convinced.

“Any channel that is not investing in more of a digital solution for its measurement would face serious questions and you would wonder whether they'll be able to retain the revenue they have, let alone grow,” said Omnicom Media Group chief investment officer Kristiaan Kroon.

The rise of streaming and the lack of credible cross-market podcast data compounded the need for change. Hence GfK being tasked with building the new hybrid measurement currency: Audience 360.

Phase one provides data about the audience into three parts: total audience, broadcast and streaming, covering AM, FM and DAB+ radio stations in Australia’s five largest cities, Sydney, Melbourne, Brisbane, Perth and Adelaide. Phase two, scheduled for 2024, brings in podcast data and the expanded use of weareable listening devices, “initially being solely used to calibrate and and validate our streaming modelling,” per GFK media measurement director Deb Hishon. “We can tell from the sound matching capabilities of our wearable devices what platform people are listening to, the panel demographics and this helps us calibrate the listeners to devices for streaming.”

That means the radio networks will have third party verified measurement data across streaming and podcasts and potentially sharper targeting, given better device level and streaming data. All of which, hopes Commercial Radio Australia (CRA) chief Ford Ennals, “will encourage advertisers to allocate more of their digital and audio spend to Australian radio”.

How it’s going

Ciaran Davis, CEO of ARN parent company HT&E, didn’t deny reports of initially lumpy numbers. But he said it wasn’t a case of haggling by networks to find better numbers between the originally planned March launch date and June.

“When you use different forms of measurement, you're going to get different forms of results, it’s the same for any sort of system [change],” he told Mi3. Davis is also CRA’s current chair.

“What we're trying to do is pull data points from many different sources and collate them. GFK has done a very good job to provide a much more holistic and granular view of when and how radio is listened to,” per Davis.

“We haven't gone through and said, ‘well, that bit is what we have got to change because it works better’. We've looked at the data, analysed and challenged it. We've taken our time to make sure that when we go to the market, we're able to robustly answer the questions that agencies will have.”

But he admitted it’s not yet perfect. 

“You are going to see some discrepancies as we have with streaming for some of the AM stations,” said Davis, who told Mi3 networks had spent months challenging the figures to ensure they were robust for the Radio 360 survey launch, even though there are very large streaming numbers for Sydney's 2GB and Melbourne's 3AW.

Spotify in sights

Davis said phase two of the 360 roadmap, adding podcasts and unique identifiers, will enable Australian broadcasters to fight back against global tech players that have eaten into audio dollar share.

“We want to provide more robustness and challenge the global players like Spotify, YouTube and Facebook to show that Australians are still listening to radio and in digital format, and we're able to target like our global colleagues,” he said.

Davis points out the radio sector has consistently accounted for 7-8 per cent of ad spend in Australia over the past two decades, years with digital channels accounting for around 55 per cent, if not more.

“Global competitors like Spotify and others have really had a free kick, because when people think digital audio, they think Spotify. Actually, the radio industry is just as digital and we're looking to target those dollars in the next two to three years.”

Money moving?

With more granular streaming data now at hand, media buyers told Mi3 that the networks stand a better chance of taking back digital dollars from big tech. But agencies always want more data – and podcast numbers will be key.

PHD head of national investment, Joanne Barnes, said the ability to segment how audio is consumed will “definitely” impact budget allocation and planning.

“Instead of a proportion of fixed investment going into a traditional audio channel, you can now look to diversify and have that de-duplicated audience,” she told Mi3. “There are different buying methods for traditional spot and digital streaming and this allows us to invest in a radio network that has diversification and more accurately place budgets within those environments.”

Carat investment chief Craig Cooper agreed more granular data benefits buyers and planners, but he’s hungry for the project’s next phase – and said post-analysis reporting should be a focus.

“What we really want in the pipeline is the podcast area, because that's still the last frontier that is not streamlined by a consistent measurement system across all publishers,” per Cooper.

“We would also like post-analysis reporting. Given the amount of spots and the investment going into radio, we really need it to be in line with TV where we get weekly post-data, that shows the position in break and all of that stuff. Podcasting is number one, but post-analysis is like a north star.”

Next: Effectiveness push

Nova Entertainment chief commercial officer Nicole Bence, who switched to radio in March from TV’s Seven Network, said the new system provides greater transparency to advertisers and enable agency partners to make “better planning and buying decisions”.

“We've not tried to boil the ocean and do everything all at once, because this is complex stuff,” said Bence.

Agencies now have greater precision, she said, because the new system “humanises” digital data. As Bence puts it, if someone is listening to Nova’s Fitzy, Wippa and Katie Ritchie in the morning through a smart speaker, and in the car, and then in the office – a wearable would count this as one listener rather than three.

“We understand that you might have four devices that you listen to, but we don't want to count that as four people, we want to count you as one. The new tech helps to validate what listeners are saying by recording what they're doing,” added Bence.

She thinks that will start to move the needle on total audio buys. “Greater transparency of audiences means buyers have greater control over their total audio campaigns. Over time we are going to see people choosing to buy all of audio rather than choosing between broadcast and digital.”

But Bence agreed with media buyers that the new measurement system needs to move beyond reach and into effectiveness and outcomes.

“Clients are looking for us to continue to evolve the methodology to follow consumer consumption behaviour to allow them to better understand where they are, how to target them, what the incrementality is, and therefore, the effectiveness of their campaigns.”

Other radio execs took the same view.

“Marketers are more focused on outcomes rather than the component pieces of an investment decision,” said one major network executive. “But with respect to agency partners, that is exactly what they are paid to do. They want to make sure they are reaching audiences effectively and being asked questions about how much money they should invest in streaming versus broadcast radio.”

Whatever the broadcast-digital investment split, CRA and the networks are hoping for a one-word the answer to that question: “more”.

Article amended to remove reference to lack of third party reach verification by Spotify. It uses Kantar, Nielsen and ComScore.