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HT&E’s Ciaran Davis on the role of radio beyond the commute and a timeline on digital at scale
CEO and managing director of HT&E and ARN, Ciaran Davis, breaks down the latest financial results with Zanda Wilson, touching on exponential digital growth, and why this round of lockdowns isn't shaking advertiser confidence.
Here, There & Everywhere (HT&E)’s core radio asset, the newly rebranded ARN, posted a 22% increase in revenue for the first half of 2021, to $98.5 million.
That result highlights the fact that ARN continues to make the lion’s share of revenue for HT&E, itself growing group revenue by 21% in the half of 2021 to $109.9 million.
HT&E and ARN chief executive officer and managing director, Ciaran Davis, also reported strong ad revenue for July and better forward bookings for August and beyond, and he is confident we are unlikely to see a downturn in ad spend mirroring the lockdowns of 2020.
“Forward projecting is tough to do in this environment,” Davis admits. “I certainly think August will see a similar pattern to July, but longer-term is unknown. What I’m picking up is that advertisers are still reasonably confident, and we have several categories still in growth.”
As for why we’re seeing a more resilient media market during the current round of lockdowns, Davis explains: “Advertisers understand and realise the value of radio advertising, and a big difference from this time to this time last year that I think advertisers have moved past the perception that people just listen to radio in the car.
“They thought that with commuting falling, listening would fall. But that hasn’t happened and what we’ve clearly seen is that the sense of trust and community from radio is still sought out.
“We are providing content across so many different platforms, and I’m encouraged to see the growth of live listening on platforms like smart speakers or PCs or tablets or mobile phones. We’ve seen an explosion in listening hours, eight million per month, on digital platforms.”
Kyle & Jackie O have had a stand-out half for ARN
The other thing that advertisers have learnt this time around is the power of talent to continue reaching audiences. “Advertisers [now] realise the power that our talent has to connect with an audience, based on the trust listeners have with personalities,” Davis says.
“I’ll point to Kyle [Sandilands]’s ‘Get Vaxxed Baby’ video. They’re talking to a community that are engaged and are listening, and trust the environment they are listening in.”
As with other radio networks, ARN’s digital revenue continues to leap forward in the half. Excluding iNC and The Roar, ARN’s digital revenue was up 149% to $5.5 million, but Davis admits that it remains a “relatively niche” part of the business.
There’s a lot of areas as an industry that we need to work on… making sure measurement is consistent, [making] it easier to plan and buy, the attribution of it is across all networks. Commercial Radio Australia is very focussed on doing that because we do see a real opportunity as an industry.
“The important thing here is the growth in digital audio is not coming at the expense of radio. The time [on there] is time spent while doing other things like cleaning or going for a walk,” says Davis.
“The broadcast business is going to remain really strong, and we will fight for our share among SCA and Nova as we always do, but we are investing in sales capability to go after those digital dollars.Our core radio business is strong and returning to 2019 levels, but equally we are investing in the future growth of digital where we think there is opportunity.”
Despite not yet reaching scale for advertisers, Davis says ARN is committed to ongoing investment in digital via its licensed platform iHeartRadio, which will continue to be built out with exclusive content too.
“The consumption of podcasts in Australia is high, and 37% or people listen to podcasts, but only 20% to 24% of agencies are considering using podcasts as an advertising medium. So there’s a long way to go and I won’t put a timeline on it but we are investing. But we are investing and building out the capability to trade.
“To get scale, you need content to be consumed everywhere. You need to be able to monetise whatever you put on that platform. Equally, for loyal customers, you need the extra exclusive benefits on a platform like iHeartRadio. It’s an important part of our strategy.”
HT&E reported another strong balance sheet, which it has kept up for a while now, leading to obvious questions about future investment in outdoor or other sectors. Davis says that HT&E will continue investment in its core audio business… “in content creation, in distribution and development of digital commercial products”.
“We will be launching a new audio planner in September, early October which is a proprietary tool,” he reveals. “It looks at understanding and showing advertisers what creative works in what environment, what time to use what medium for the best reach and engagement of your audience.”
Davis also says that diversification is very much on the cards, but reveals that a three-year-long tax case is stifling investment, as HT&E needs to keep cash on hand. “Our balance sheet is exceptionally strong but we still do have a tax case that we are mindful of.
“We’re very confident in our position and we will go to litigation if we have to, but equally we have to manage that balance sheet, which is unfortunate and disappointing. And it’s been three years since we put our assessments into the ATO.
“In terms of broader consolidation, you and I have spoken about this a few times. I do believe that, in order to be able to combat what digital global players bring, you need scale, multi-platform content, and every business is looking to build that at the moment.
“You need to offer a mixture of assets, so TV, radio, out of home, we are monitoring the right opportunities. I do thinking there will be big things happen in the next 12 to 18 months.”
As for the next round of radio ratings, due out at the end of August having recently been delayed, Davis doesn’t buy into the idea that lockdowns will see listeners turn back to talk radio in the same way as 2020.
“I actually think people are tired of [talkback] at the moment. I think people are looking for the content that we produce for the association of normality. Escape is probably too strong a word because we do cover news content and we do have a premiers on, the prime minister on. But people want normality, that sense of connection, that sense of community with personalities that they know and love.”
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