After a period of ‘intense cancellations’, HT&E CEO Ciaran Davis is looking at green shoots
Following Australian Radio Network (ARN) parent company HT&E’s results presentation yesterday shares rose 0.18 points to $1.39. Mumbrella’s Hannah Blackiston spoke with CEO Ciaran Davis to find out what investors liked about the presentation and what he sees for the rest of 2020.
Putting aside the cliches of the year (unprecedented anyone?), nobody was expected excellent results from media companies in 2020. A quick glance over the Standard Media Index (SMI) figures which measure agency ad spend would tell you it’s been a tough four months.
Ciaran Davis, CEO of ARN parent company Here, There & Everywhere (HT&E) says March was a time of ‘intense cancellations’ and that the industry took it upon themselves to educate marketers that lockdowns would not mean the death of radio.
“Radio listening overall grew by 7% – mornings, afternoons, breakfast, drive were all up. People wanted some form of normality, they wanted that sense of community and connection that you can only get on radio. For us, having a great stock of talent across the country and some very engaged audiences that grew was an important part of the story we’re now telling,” he said.
HT&E saw its share price rise following the results presentation
“In March, the initial period of lockdown was one of intense cancellations that we saw driven by businesses pulling back on spend, but the misconception was out there that radio advertising would be adversely affected because in car listening would drop. As an industry we knew that wasn’t going to happen, at home listening jumped by 48% so not only has it been negated, but the audience has actually grown. As an industry, I think we did a very good job moving very quickly to convince ad agencies and advertisers that actually these are the conditions where radio thrives.”
HT&E reported a $59.3m loss, largely due to a $64.3m write-down across its radio and outdoor (Hong Kong Outdoor) businesses, and a 29% drop in revenue across the six months to June 30, resulting in $93m in revenue. That was driven largely by the lockdown quarter, which fell 46%, but in its reporting, HT&E pointed to green shoots in Q4 of 2020 which will hopefully result in a different report next year.
Davis is quick to point out that those shoots are very much at the mercy of whatever happens in the world from this point on, but he’s hopeful. The current Melbourne lockdown hasn’t hit ARN’s revenue he says, in fact the state is actually performing ‘quite well’, which he hopes will replicate itself elsewhere if, or when, other outbreaks occur.
“These are challenging times that none of us have ever experience before, but we’ve always put a lot of strength behind our strategy of talent and local content to differentiate ourselves,” he says.
ARN has signed its talent to incredibly long contracts – market leaders Kyle & Jackie O have signed with the network until at least 2024 – and regularly rolls out new marketing material for its top shows, including one a few weeks ago to signal the return to radio ratings.
Davis says its strong talent network is a large part of ARN’s success
Like other media companies, HT&E moved quickly with stand-downs and cost-cutting earlier this year, but in a way the radio industry has been preparing for the lockdowns for a while now as the businesses expand their digital and on-demand offerings.
“Over the last 12, 18 months we’ve been going to market with a strong commercial strategy – mixing the strength of radio, it’s immediacy, effectiveness and ROI from a retail perspective – with the growing consumption of audiences that we now have on our IHeartRadio platform. We’re winning share on the basis that we can drive campaigns between platforms, whether its live radio, its catchup podcast or music streaming. Digital audio revenue isn’t huge at the moment, but it will certainly become material in the next few years.”
For now, HT&E is focused on protecting its core business as much as it can, while investing in the future and preparing for the digital audio revolution. Davis points to Christmas as a period which could see things turn around from an advertising POV and he’s still confident businesses will spend during the period. With radio ratings set to return at the end of September, things will begin returning to normal for the industry soon.
In 2021, after a year of savings and cutbacks, Davis is looking to investment to maintain ARN’s leading share.
“We’re looking at 2021 with the model we have, we’ve been very successful so far, but we’ve got to start investing in the business in 2021 and into things like marketing. We’re planning a lot for which areas need investment and we’ll be looking at digital audio capabilities from both a content and advertiser perspective.”
