Radio is magic, digital is maths, both are important: ARN's Ciaran Davis | radioinfo

Radio is magic, digital is maths, both are important: ARN's Ciaran Davis

Thursday 14 May, 2020

Like so many others around Australia, ARN CEO Ciaran Davis is working from home for at least part of his week during the COVID 19 pandemic. He speaks to Steve Ahern about the priorities of the company and the effect of the virus on the business.

 

With a background of shelves containing books about negotiation and innovation, Ciaran Davis is quick to answer the question whether he has ever seen anything like this pandemic in any other businesses he had ever worked.

“No. The 2008 crash was severe, but not as severe or as quick as this. 2008 was more gradual, I was in Europe at that time, which was hit harder than Australia...  there was a slower impact on advertising and employment, but this has been very sharp and sudden.”

At the HT&E Annual General Meeting last week, ARN’s parent company reported that it had taken a hit in revenue like most media companies and is weatching trading conditions, but that it had not needed to make anyone redundant yet. Davis says he is proud of the way ARN staff has adapted and remained flexible during the company’s response to the pandemic and the lockdowns that have affected so many advertisers.

Some of ARN’s advertisers have responded quickly and have adapted in the face of adversity. “What has been inspiring has been to see how some clients have pivoted to offer new products or services.” This has been evident in sectors such as food and medical services.

Many direct clients have temporarily closed their doors, so are not able to stay on air, but ARN has been working with those clients to put plans in place that will help them when they reopen and the market returns. “It’s against the grain for us to bail out on them, we will do what we can to show support for our loyal clients.”

Revenue is down but audiences are up. Davis says times like this are where radio comes to the fore. “Our audiences want a sense of normality, I wasn’t surprised that listening has gone up… There are so many new ways to listen, they want to connect with people and content at this time when they are shut in.”

Like most other networks, ARN has seen an increase in daytime listening and lifts across the board. There has also been a significant uptick in listing on the iHeartRadio app and on smart speakers, according to Davis.

“We didn’t change the timing  of our breakfast show like some others did, we want to make sure people feel that their favourite breakfast teams are there as usual, giving them a sense of companionship and stability. It is a great case study for the power of radio.”

After infections diminish and the lockdowns lift, Davis thinks there will be a return to normal listening patterns, but that people will also have added new habits, so overall audiences may increase.

There was a perception amongst some advertising agencies that radio peak listening would go down because fewer people were commuting, but the commercial radio industry has acted quickly to disprove that incorrect assumption. Davis says there has been an unprecedented show of unity on this issue from sales people in every radio company. “We are normally very competitive on sales, but on this issue the Heads of Commercial in all stations have come together and combined forces to communicate the message that listening is up. This has been well received by agencies… it is in the industry’s interest to knock down this misconception with good data from CRA and a united message from us.”

 

What will happen after the pandemic is over and lockdowns are eased? “We are trying to model for various scenarios, but there are so many unknowns, we will need to adapt as we go.

“The thing I do know is that radio will be well placed to respond to the needs of advertisers when they do bounce back. Our ad effectiveness is high and we are good value. Radio can drive ROI and it is the best medium to be able to change messages fast when things are evolving."

In his economic statement yesterday, Treasurer Josh Frydenberg outlined the economic impact of the virus on the economy. Treasury is forecasting Australia’s GDP to fall by over 10% in the June quarter and the unemployment rate is expected to reach around 10%, or 1.4 million. Household consumption is expected to be around 16% lower and business investment down 18%. In March, business and consumer confidence saw the largest declines on record and the stock market’s ASX200 lost more than a third of its value.

Despite these tough times, ARN is still making investments in the further development of iHeartRadio and Davis feels that post-COVID, the interaction of digital audio and radio platforms will bring even more benefits for ARN, given that it now has 1.2 million registered users on the app platform. “The iHeartRadio data is fascinating, we can understand so much about the audience, their reactions to our promos and tactics in almost real time… There were also 8 million hours of music listening  in March, so people, are moving around the platform more than ever now… it is the next level of research.”

Podcasting, music streaming and live radio listening on the iHeardRadio platform are all showing dramatic increases, with catch up radio still “the most profitable content” on the iHeart app. Davis makes the point that, whatever growth there is on digital platforms, advertisers still want radio. About 70% of briefs want integration with talent or promotions, something which pure music streaming  apps can’t deliver. 

“Clients are looking for more than just CPM, radio is exceptionally strong in this area. Radio is magic, digital is maths, the mix of both will be very positive for the future of radio,” he says.

 

ARN was able to move quickly in response to social distancing needs due to ongoing work the company had already been doing to upgrade its technology. 480 staff are now working remotely and Davis says they haven’t missed a beat, from broadcasters doing their shows remotely to sales and creative teams collaborating to deliver client briefs. “I’ve been hugely impressed with how we have been able to change quickly. Staff wellbeing is high despite the fact that some people have had to reduce their hours or take leave. JobKeeper and tightening our cost base has helped us to keep everyone on. The technology team has done a great job and so have the broadcasters, all major shifts have at least someone broadcasting from home.”

In the technology area the entire broadcasting chain across the network was recently upgraded to Audio Over IP technology which gave ARN the flexibility to move on-air talent to any location. The backbone to ARN’s IT network was replaced, expanding bandwidth and capacity to the increasing demand on internal and external traffic.

ARN’s Technology Director Joe Sexton moved to a hybrid cloud solution with critical servers hosted in ARN data centres and office applications on public cloud infrastructure. This gave ARN the ability to scale to the additional requirements of having all staff working outside the network.  

ARN has moved all staff to the Microsoft 365 suite to improve remote  collaboration  and communications, including the adoption of Teams for Video Conferencing and Messaging, and Yammer for all internal communications.  Davis says an example of the technology’s effectiveness came last week when there was a major proposal that needed to be turned around in 48 hours. The sales, promotions and creative teams were able to collaborate and meet the deadline for the client using the new tools.

ARN has also rolled out Nextgen Security to all ARN IT Systems including virus protection, web protection, email and remote access, to ensure security is maintained for both internal and remote users.

Davis predicts that offices will not be the same after the Corona Virus. He plans to eventually review the floor space of ARN’s various offices and the way people work together. “People will still need to be together to collaborate and engage socially, but we may do it differently in the future.”

 

As well as the innovation books in his home office, Ciaran Davis also has a child’s drawing on one shelf and what looks like a Spiderman mask on another. His home office environment seems to reflect a range of interests which include family, work and play.
 

 

In an announcement to the stock exchange today formalising the remuneration decisions from last week's board meeting, Ciaran Davis received another 143,066 shares in the company for the previous year's performance. In response to the current pandemic, Davis and all other senior executives last month announced that they have taken a 20% reduction in salaries for six months as part of compamy wide efforts to cut costs during the virus driven decline in advertising.
 

 

 

 

 


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