Absolute Radio have created a lovely new website at absoluteradio.co.uk. The design is great, but there also seems more of a focus on UX – user experience – delivering a website that concentrates on doing the things that listeners want, rather than what the radio station wants. It works very well on mobile and is probably the best designed radio station website in the UK.
The most obvious part of this is the prominence of the ‘Listen Live’ button. It’s big and in front of you when you visit the site. It’s there because that’s the thing that the vast majority of users want to do. If you look at the stats of pretty much any radio station website, the Player is either the number 1 (or number 2 to homepage) visited page. Often Home and Player’s use is a magnitude ahead of anything else.
The other thing that’s noticeable is that there’s no banner ads – no Leaderboards, Skyscraper’s MPU’s cluttering up the pages, the focus of pretty much the entire site is Absolute-radio related. That’s not to say there isn’t commercial branding at all. Sponsorships, like Wickes’ of the breakfast show have presence and the competitions are, I imagine, all paid for too. What there isn’t is run-of-site (ROS) ads that are usually there to generate incremental revenue.
Most websites that run proper online web banner campaigns are paid on a CPM ‘cost per mille’ basis on views. So, let’s say an advertiser says they’ll pay you £5 for the display of 1,000 banners. This is quite easy to serve, you put up the code, the banners are delivered and the cash rolls in based how many you show. Therefore to increase the money you can do two things – 1. Increase the number of adverts you have on each page; and 2. Increase the number of pages that are viewed.
You’ll often see a minimum of three ad units on a website, this means that’s you’ll make three times a much money – as remember you’re paid per 1,000 views of the ad.
Increasing the number of pages a user views is tougher. The most sensible way to do this is to create compelling content that people want to consume and good navigation for them to find it. Unfortunately that’s very difficult to do. Instead it’s much easier to split articles into two (or more) pages, have image galleries where each picture is on a new page, launch multi-page quizzes and do othe tricks that will help you serve more pages (and ads) and therefore make more money.
Often revenue is more important than user experience and therefore the tail somewhat wags the dog. However, according to a discussion James Cridland had with the Absolute team, they came to the conclusion that with banner revenues under pressure and delivering less money per view, it had started to reach the point whether the benefits did not outweigh the cost (to users). When they removed the banners there was no longer the need to generate additional pageviews at any cost, so they can concentrate on building a site based on what users want.
For revenue generation they’ve doubled down on supporting existing show sponsorship and the in-stream audio advertising their online players allows them to sell. With their player they encourage users to login. This means they have demographic and location details so they can deliver more targeted ads. If someone wants to just advertise to 25 year old men in Manchester they can pay a premium and Absolute’s system will deliver that.
Providing there’s the demand from advertisers the yield they can get from these tailored ads should be greater than the one size fits all nature of traditional radio commercials. I understand that traditional broadcast radio ads may generate £1.20 per thousand impacts of an advert, but targeted in-stream may generate £5 to £10 per thousand impacts. A significant premium.
Therefore why bother with banner ads. Just concentrate on making listening easier, increase the amount, and sell your premium targeted ads.
The thing that worries me about this approach is that Absolute is also doubling-down on the radio model, to the detriment of everything else.
As you navigate the rest of the website, other than finding out who’s on which of their stations, what music they played and the opportunity to enter competitions there’s pretty much nothing else there.
Since the change from Virgin Radio, Absolute have managed to make their main radio station have a decent brand with some actual radio content – presenters who have something to say, comedy and football. They’ve also extended it by launching the successful decades spin-off stations. The end result has been increased hours for the group. Now they’re owned by Bauer, with a large national sales team behind them they can better monetise those hours. In the past, when they were a stand-alone operator they weren’t getting a fair share of the money for those hours, now with Bauer they’re starting to do that.
It’s one of the problems with radio’s core model. Global and Bauer have created ‘share deals’ with most of the big advertising agencies. The ad agencies get a good price in exchange for agreeing to give a bigger share of their radio money to the big groups. So, Global and Bauer may have 80% of commercial radio’s hours but they do a deal to get 90% of the money.
There’s a fixed amount of money to go round, there’s now more stations and you have to work harder to get it. Other than significantly growing your hours it’s unlikely that you’ll be able to grow your traditional radio revenue that much. That’s why there’s more of a focus from radio stations on sponsorship, branded content and online – this is revenue that doesn’t come out of the share deals pot.
Also, the in-stream advertising money’s coming out of a different pot too. It’s coming from the sexy ‘digital’ pot that agencies are using to buy ads on Spotify or other websites. It’s shiny and new, so it costs more and publishers/radio stations can make more money.
To me though, the problem is that in-stream will eventually replicate the share model. Every radio station will run in-stream ads, that combined with Spotify, iTunes Radio and other streaming services will generate a fixed amount of supply and you’ll then get your share of the money. Fundamentally, it’s the same business radio’s always been in, we’ve now just got some more competitors.
I’ve always been of the view that the future for radio stations is to grow their footprint by increasing the number of touch-points they have with their users. As a business, the more time consumers can spend with our products, across as many platforms as possible, the better chance we have of growing our businesses. This could be websites, TV channels, magazines, live events, mobile apps, whatever.
If you don’t do this you’ll be left with a radio station that will find it harder and harder to increase its hours (there’s just more competition) and you’ll make less money from those hours (national CPTs are not going up). To maintain profit margins you reorganise the business, which generally means less marketing, less content and less people. This then has a knock-on affect to revenue and then you’re in a bit of a spiral.
Of course, expanding in other areas is not the easiest thing in the world for radio stations to do. Changing the relationship you have with listeners from a passive to active, encouraging them to do more with you is tough. Over time we’ve also trained our listeners of what to expect from us – music driven radio stations and ads.
The reason that the Listen Live button is the most popular user journey is that’s the main thing we offer consumers – a radio station. Well, of course we’re really good at that! We’ve been doing it for 40 years! Surely the real challenge is growing an expanding the things that consumers come to us for.
To me, Absolute removing most of the content from their website and putting the Listen live button front and centre is actually a statement that they’re giving in. It’s saying, you know what, we’re unable to broaden our relationship with listeners, we’re just going to make it easier to give them exactly what they expect and we’ll concentrate on trying to monetise that.
What’s actually surprising is that the entire commercial radio business is built on the idea we can get consumers to do something new – through radio advertising! Something that all the research shows that works – but that we’re unable to use this relationship with consumers to sell our own products and get them to do something that we want them to.
Partly it’s because as a content business we haven’t invested enough money into non-radio things. We’ve failed to use our scale and relationships to create a compelling website, or mobile property, or video series. We make some efforts at it but it’s an add-on. How many people work on your website vs work on the on-air output?
I think it’s interesting that the people who are making more of a go of it are those who do not have the analogue radio baggage. Team Rock seemingly want to be a rock content business that connects with consumers online, through magazine and on the radio. They’re building a content business that radio’s a part of. Premier Christian Radio and UCB have realised that one of the core models – direct debit donation – is best served by being on all platforms for their fans. Even at Bauer, Heat Radio seems to be something that his growing as a radio station but also supporting the brand. The brand’s also providing content and cross-promotion.
For our children’s brand, Fun Kids, we know that not all of our consumers listen to the radio station. The use of the website, the YouTube videos, the podcasts have as much value as people tuning in. To be honest, I’m much happier that the revenue we generate is spread across all the platforms than just sitting in one. We can also use all of these touch points to create and market new products as the business develops. I definitely don’t want our consumers to just think of us as a radio station or that our website is just a Listen Live button. There definitely wouldn’t be any fun in that.