New commercial opportunities need to be exploited with care, says Clive Dickens.
Ofcom says its new rules will “enable commercial broadcasters to access new sources of revenue, while providing ongoing protection for audiences”. But as the pictures shown on British TV of American Idol with the Coca-Cola logo blurred out demonstrate, we’ve really had a long way to come in the UK. Could it be said that these changes are out of date already?
Here at Absolute Radio, we welcome the rules. We’re well on the way to moving radio into the modern world, where conversation and opinion about brands is commonplace - and about time too.
The digital economy continues to disrupt traditional business models and the unprecedented economic climate has certainly given the advertising and media community a rollercoaster ride over the past two years.
These changes undoubtedly open up the marketplace for commercial radio. As a small industry compared with the mammoth land of TV, there are fewer legislative hurdles to producing integrated branded content, which enables brands to be closer to, and achieve deeper engagement with, audiences.
And these changes could mean a lot of additional revenue for the radio industry - estimates put it at around £50m per annum within a few years. Radio offers a lower investment entry level to brands in comparison with broadcast TV, and these changes mean a significant opportunity for those wanting to invest in the medium.
The RAB reports that 20% of radio revenues are now non-spot - more than 40% of Absolute Radio’s content is branded, for example - and these changes could lead to the radio industry striving to receive 30% of revenues from branded content as its overall share. This is a huge opportunity for the radio industry as a whole.
However, these changes still mean there are significant differences between the radio and TV industries - and it could be said that it should be left up to audiences to decide where they put their loyalty. Consumers should be canvassed on how far they feel commercial brands can go to bring them engaging and interactive content - I would imagine few fans of Alan Partridge are moaning about Fosters bringing the much-loved character back with fresh episodes.
Of course, relevancy is important and, as is the case with anything, these opportunities need to be exploited with care. Commercial messages are only a turn-off when not relevant and not engaging, and therefore not fun. Non-spot advertising delivers exactly to this aim, with embedded and clever messaging. The very fact that we have commercial-free BBC in this country will ensure that we, as an industry, do not fall foul of over-commercialisation to the detriment of the listener consumer.
A forward-thinking future would see the government and Ofcom allow information that is relevant, useful, wanted and, more importantly, needed by the consumer - and brought to users by commercial partners, who will play a vital role in the creation of more exciting and innovative content by investing in it.
These changes came about after a year’s lobbying. We will continue to work with the RAB and the rest of the radio industry to bring about further relaxations and look ahead to an ever brighter future.
➤ Clive Dickens is chief operating officer of Absolute Radio