The future of UK Commercial Radioand what it means for advertising customers

Andrew Harrison – CEO, RadioCentre

The future of UK Commercial Radio

• RadioCentre – objectives & strategy

• The current status of Commercial Radio

• Catalysts for change

• The vision for UK Commercial Radio

RadioCentre

Revenue

Audience

Digital

Influence

Organisation

Our purpose

The RadioCentre leads a dynamic and thriving Commercial Radio Industry, helping our members grow revenues and audience year-on-year.

Our purpose

The RadioCentre is “the voice” of

Commercial Radio

R-A-D-I-O

R - Revenue

A - Audience

D - Digital

I - Influence

O - Organisation

The future of UK Commercial Radio

• RadioCentre – objectives & strategy

• The current status of Commercial Radio

• Catalysts for change

• The vision for UK Commercial Radio

Audiences are holding up brilliantly despite huge growth in new media

0

20

40

60

80

100

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008(Q2)

All radio Commercial Radio

Weekly reach (% of adults 15+)

Source: RAJAR

Radio continues to recruit listeners amongst 15-24 Digital Natives

6,400

6,500

6,600

6,700

6,800

6,900

7,000

7,100

7,200

7,300

Q201

Q301

Q401

Q102

Q202

Q302

Q402

Q103

Q203

Q303

Q403

Q104

Q204

Q304

Q404

Q105

Q205

Q305

Q405

Q106

Q206

Q306

Q406

Q107

Q207

Q307

Q407

Q108

Q208

TI ME

Reac

h (0

00s)

Weekly reach of 15-24 year olds by quarter for all radioSource: RAJAR

Commercial Radio is strongest for younger audiences

Commercial Radio BBC Radio

55+

55+

45-54

45-5435-44

35-4425-34

25-3415-24

15-24

Proportion of total hours listened by age groupSource: RAJAR Q1 2008

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

28%

14%

49%

5% 1% 6%5%

40%

25%

13%

2%9%

% of time spent with each medium on average day

Base: All adults 15+ Source: Touchpoints 2

Radio is an important medium in consumers’ livesRadio remains under invested-in relation to its share of consumers’ time% share of display revenue

Source : NMR 2007

R-A-D-I-O

R - Revenue

A - Audience

D - Digital

I - Influence

O - Organisation

R - Revenue

Quarterly Commercial Radio industry growth (%)

-12

-10

-8

-6

-4

-2

0

2

4

6

8

Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008

Source : RadioCentre

-7.3%

-9.5%

-1.6%

+0.8%

+5.4%+7.1% +6.7%

RadioCentre Certificate of Excellence

RAB – driving revenue growth

Not Always AnEasy Sell

A Medium I Know

& Like

Hooper Galton qualitative research, Dec 2007

Lots Of OtherOptions

The challenge radio faces

BENIGN NEGLECT

RAB activity

4. Agency events3. Strategy Consultants

2. Reports1. Trade events

Reach/frequency

Audio

Dayparts

Intimate

Online

Re-allocate some of your media budget to radio and you will get more overall effect for the same investment

A – Audience

D – Digital

A digital media world complements not competes with radio

Digital platforms are extending radio’s distribution

18.4%

9.0%

4.5%

1.8%

DTV DAB Internet Total Digital

Digital radio now accounts for 18% of all Commercial Radio listening

Commercial radio: Share of Listening Hours

% listening via platform

Source: RAJAR Q2 08

www.radiocentre.org/player

New RCP graphic

I– Influence

Create optimal environment for Commercial Radio to grow

Achieving a level playing field with the BBC

Local Video

The current status of Commercial Radio

• Radio is important for consumers

• Huge radio audience is holding up despite plethora of new media choices

• Digital platforms will help enhance radio’s relevance & listening

The future of UK Commercial Radio

• RadioCentre – objectives & strategy

• The current status of Commercial Radio

• Catalysts for change

• The vision for UK Commercial Radio

Marketplace change

The Times, 30 June 08

The Telegraph, 15 June 08

BBC News Online, 13 Sept 07

RAB response

EVENT:

A new vision for UK Commercial Radio

18th September

Ownership change

Digital change - DRWG

Digital future

DAB & Broadband• UK broadcast• FREE• MOBILE• PROPRIETARY• ROBUST• Audience data• More national CR stations• Low level interaction

• Global online• Worldwide choice• Return path• Alternative revenue streams• Links to station websites

The future of UK Commercial Radio

• RadioCentre – objectives & strategy

• The current status of Commercial Radio

• Catalysts for change

• The vision for UK Commercial Radio

The vision for UK Commercial Radio

LISTENERS ADVERTISERS

COLLECTIVELY Take the game to the BBC and build share of listening

Easier access to the whole CR listener & online community

COMPETITIVELY Deliver optimum choice for listeners

Deliver optimum value for advertisers

Universal McCann immersion week

28 July MondayStarts with a Classic FM Breakfast

9:30am Andrew Harrison, RadioCentre“The Future of Commercial Radio”3:00pm David Meliveo, Autoglass“How radio has built Autoglass”

29 July TuesdayStarts with an LBC Breakfast

9:30am Simon Cole & John Quinn, UBC Media“Radio as a retailer”12:30pm Moz Dee, talkSPORT“Commercial Radio vs the BBC”4:30pm Andria Vidler & Dee Ford, BauerRadio“How UK brands are evolving in the digital age”

30 July WednesdayStarts with a talkSPORT Breakfast

10:00am Don Thomson, Global Radio“Global Radio’s vision for the future”11:30pm David Muniz, Gaydar Radio“The power of discrete, targeted radio brands”1:00pm John McGeough & SimonDaglish, GCap Media“Fresh thinking with GCap”3:30pm Steve Ackerman, Somethin’ Else“Branded content on Commercial Radio”

31 July Thursday9:30am Julian Carter, Paul Fairburn & JohnMyers, GMG Radio“Taking on the BBC”11:30am Martin Stiksel, Last FM“The growing role of personalised online radio”4:30pm Donnach O’Driscoll & Nick Hewat,Virgin Radio“Meet the new owners of Virgin Radio”From 7pm join us for the Heart music quizwith Toby Anstis

1 Aug FridayStarts with a Kiss Breakfast

10:30am Jonathan Arendt, NME Radio“NME Radio and their new proposition”12:30pm DJ Q&AWith special guests, inc. Christian O’Connell, Ricky & Melvin4pm onwards Kiss FM host Agency DJ of the year