Rajar Q4 2016: Industry analysis

There have been a few negative reports on yesterday’s Q4 Rajar results; however, looking into the detail, there are actually a number of positive stories for the radio industry. It’s important to remember the previous quarter was a hugely impressive set of results too.

Digital listening continues to grow with a 45.2% share of listening, up from 41.7% in Q4 2015. DAB in car listening, DAB at home listening, online and app listening, listening via new devices (e.g. Sonos Play) are all looking very positive. Radio continues to benefit from new technology. This will become increasingly important for data-driven advertising strategies.

Station by station, listening results are quite varied. The positive listening trend around speech radio continues – LBC up 17% YoY and talkSPORT remains above 3 million weekly listeners. Bauer will be heavily publicising Kiss’ London performance – a great achievement for them to be No.1 in London and in London breakfast.

Capital Radio & Heart’s London performances were disappointing – their owner Global Radio won’t take too kindly to being knocked off the top spot. The timing of Dave Berry’s departure may be a coincidence or the start of some big changes to the line-ups.

What is certain is that the radio marketplace remains hugely competitive and there’s no doubt Bauer, Global & the Wireless Group will all want to be growing their audiences and data opportunities going forward.

It’s hardly surprising that – with the exception of the BBC – radio is struggling, given the insurgency of Spotify, Tidal and the internet. However, this is by no means a reason for advertisers to tune out. 90% of the population still tune into the radio every week, clocking up an average of 21.5 hours of live radio a week – meaning it is still an incredibly effective way of reaching a large audience directly.

Radio is a strong conversion channel for e-commerce brands and the growth in digital aides is putting the point of trigger close to the point of action. The fact that 6 in 10 adults currently listen to radio via a digital platform is a compelling argument for brands to get involved in the channel. Digital aides increase accessibility and the reach of radio as people actively seek out their favourite stations online.

A success story here to note is Kisstory, which took the top spot for most listened to commercial digital-only station. With a repertoire consisting almost exclusively of nineties and early noughties music, it’s clear the younger generations are happy with the progression from the wireless to Wi-Fi, and find it as relevant as ever.

The overall picture is part of evolution of an ageing audience, as those that have abandoned the likes of Capital, Heart and Absolute, are instead tuning into to BBC Radio 3, 4 and 5 Live. Crucially though, radio isn’t leaving young people behind as it adapts to changing needs and likes.

We saw the usual fluctuations in share between the BBC and commercial radio in Q4, but aside from the customary commentary that these swings always generate, the big story for radio in this quarter was the fact that radio reported its second biggest ever live radio audience reach, with 48.7m listeners tuning in weekly.

These figures demonstrate the continuing appeal of audio and highlight the fact that in an environment of increasing demands on peoples’ time, audiences remain loyal to a media which complements their behaviours.

Following a big jump at the start of the year, listening to radio via a digital platform has remained fairly stable in 2016. With 2017 being heralded as the year of digital audio, it will be interesting to see what impact the technological developments in this area have on audience numbers.

42% of all 15-24 year old social media users receive updates about their favourite stations and presenters, which illustrates the growing importance of the integration of audio, social and video, to deliver personalised engagement for younger audiences cross-platform.

This quarter saw the highest ever proportion of in-car radio listening, a number that will continue to grow alongside the on-going installation of DAB in new cars. The strength of radio for this captive audience is in the role of content curator and information provider, in an environment where audiences are still favouring traditional sources of entertainment.

Looking ahead to 2017, it will be an exciting year for audio, with the evolution of tailored and voice-activated ads meaning that advertisers are increasingly able to take advantage of opportunities for personalisation which are already available to them in other media.

We’ll see great advancements in the digital audio market which should lead to further listener growth and more opportunities to engage with audiences.