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‘No other medium can do what we do’: ARN’s Ciaran Davis

Speaking to Mumbrella yesterday, ARN’s chief executive Ciaran Davis expressed positive sentiment about the future of radio’s appeal to advertisers. Davis spoke on the macroeconomic storm’s role as a competitive advantage for Australian radio businesses, the ‘cultural challenge’ of the regional radio acquisition and the burgeoning digital reinvention of the radio industry.

ARN’s $330 million January acquisition of 46 regional radio stations from Grant Broadcasters saw strong performance in HT&E’s earnings report, with ARN Regional radio revenues up 11%, and EBITDA up 21%. In addition to a positive regional performance, ARN saw satisfactory growth in their metro audiences, most of which Davis assigns to be the result of a strong, successful alignment with the challenging 18-29 market – a feat which is proving to be a major draw for advertisers.

Ciaran Davis, ARN CEO.

“The results show that the radio industry is doing incredibly well. A lot of people wonder about the resilience of radio, but it shows time and time again that it generates increasing audiences – we’ve hit nearly 12 million this year,” Davis said.

“How we go to market with our audio sphere, our ability to bundle across radio, digital audio, digital assets and dynamic audio (which is a commercialization product that we have), the ability to do integration across 58 markets, it’s an incredibly strong proposition that advertisers are leaning into – not to mention the amount of localism we have. If you talk to advertisers about that, they’re incredibly interested in learning more about it.

“Not only do they want scale, they want attentive, engaged scale.”

Davis was especially confident about radio’s ability to reach a younger, engaged market.

“The level of engagement across all age groups is there. People say younger people aren’t listening to radio, bur look at the stats – they are. From that perspective, advertisers are leaning into it,” he said.

Davis was emphatic that keeping abreast of the movements and behaviours of the 18-29 demographic was paramount in maintaining their listenership in a viciously competitive attention economy.

“We’ve employed people who have very strong followings themselves, and they’re speaking the language of young people. Wherever those young audiences are engaging with media, we are there.

“That’s really important to do from an advertising perspective. We all know 18-29 year old’s are a really hard audience to reach, and if you can demonstrate a very strong engaged audience that’s very attentive to what we’re doing then there is a premium for advertisers. That’s something we want to tap into with CADA,” – CADA being the company’s new youth platform.

“In totality, radio is evolving. We’re all bringing new digital products to market, which is growing the overall listening to radio. The level of engagement and connection we all have with our audiences is increasing and it’s only going to get broader and stronger.”

When asked where the company would continue to direct its investment in H2, Davis again highlighted the focus on bolstering the business’ youth offering and digitisation.

“We’re increasing our investment into podcasting, new content creation, new episodes – that’s the bulk of the $9-10 million that we’ve spent this year in terms of digital audio investment. Digital audio is where we will continue to focus our investment.”

Commenting on the $330 million acquisition of the regional assets, Davis said that getting the regional acquisition right was “a cultural challenge”, with the amalgamation of the two businesses being a “huge challenge” to get right.

“It’s been a very busy 6 months integration-wise but the with the work has been a lot of success. the regional performance is outperforming the market, and that revenue is cutting through to strong profitability and margin expansion. This acquisition was all about revenue synergies come through, and we’ve been true to that.”

“We’re staying true to what they are – the lifeblood of local communities. The role of radio is incredibly important around communities and connection with local communities, because no other medium can do what we do in terms of engagement.”

Davis was confident that the downturns in the market would actually pose a competitive advantage for radio, given the relatively swift decision-making process and production of marketing assets. The cost effectiveness of the medium was also pegged as an obvious advantage for advertisers in a period of global economic malaise.

“Clients have realised the power of what we deliver when time for decision making is a bit shorter.

“The challenge now with advertisers is the uncertainty around interest rates and inflation. This is where we showcase how radio comes into its own. The relative cost efficiency of what we do and the lower CPM’s we have to other mediums makes radio a powerhouse to drive ROI in the short term.”

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