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COVID impact on commercial radio ad sales more severe than anticipated, RadioCentre says
By Chris Cooke | Published on Thursday 25 June 2020
The commercial radio industry has said that the impact of the COVID-19 pandemic on advertising sales has been even more severe than expected, and that the sector will therefore need further support to help it weather the ongoing storm.
Trade group RadioCentre has published a short report in response to an inquiry made by Parliament’s Digital, Culture, Media And Sport Select Committee. It says that commercial radio stations have played an increasingly important role in supporting communities during the pandemic, but that the slump in ad income has made trading very difficult.
According to RadioCentre’s research, ad sales income for the second quarter of 2020 were down about half year-on-year. But some local stations that rely predominantly on local advertisers have been hit even harder, as many of those local businesses went into shutdown and stopped advertising entirely. For those stations, ad income overall could be down as much as 90%.
Meanwhile, the trade group reckons, listeners have been relying on its member’s broadcasts even more during lockdown. It says that a survey conducted by research company DRG found that “a significant proportion of commercial radio listeners (38%) are tuning in for an extra one hour and 45 minutes per week on average” since lockdown began.
Reasons given for this uplift in listening include: “staying in touch with the outside world (90%), keeping informed (89%), companionship (84%), making them feel happy (77%) and delivering trusted news (64%)”. So, more listeners, but less money.
RadioCentre acknowledges that the commercial radio sector has benefited from the government’s general COVID-related financial support schemes and that media regulator OfCom has taken a sensible approach to enforcing each station’s programming and production commitments during the crisis. It also references the deal done with infrastructure company Arqiva to bring down the transmission costs of radio stations, which ministers helped to negotiate.
However, it says, challenges remain. Radiocentre CEO Siobhan Kenny states: “Commercial radio stations have done an amazing job over the last few months, informing and entertaining people during a really difficult time. As we start to move out of lockdown these valuable services face an uncertain future, so continuing support from government, OfCom and our friends in Parliament will be essential”.
In its report, RadioCentre again proposes that the government increase its ad spend with the radio sector to help stations overcome the negative impact of the COVID crisis, mirroring support provided to the newspaper industry. It states: “Radiocentre has highlighted to the Cabinet Office that there is a case for significantly enhanced government advertising on radio, both on COVID-19 messaging and other public information campaigns”.
It goes on: “Advertising on commercial radio is easy to consume, listening levels are strong and it reaches a broad cross-section of the population (reaching 62% of BAME audiences, 67% of C2DE audiences). A significant increase in government investment in radio advertising – with a broader range of creative executions – would enable effective public service messages to get out quickly to large audiences across a wide range of the population. This increased investment would not only provide useful and effective communication but would also help keep radio stations on air”.
