Absolute Radio’s Website and Radio’s Business Model

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.

Absolute & Bauer

Most of its life Absolute/Virgin Radio seems to have been up for sale. Having spoken to friends who work there over the years, most of them say that you can’t be distracted by it, you just have to get on with things. So, I’m sure that’s what they’ll be trying to do over the coming months whilst the deal progresses. Unlike Global/GMG this one’s contingent on there being no regulatory problems, if there are, it would go back to the current owner, Times of India. However, I would be surprised if there were any problems.

Online there seems to be lots of second guessing about what Bauer will do. Most of this seems to be rooted in Fantasy Football-style discussions rather than looking pragmatically at the business. But, I guess, where’s the fun in that…

I think it’s probably best to think why they’ve done such a deal. For my money there are two reasons:

  1. Scale
  2. London


Bauer (and EMAP before them) have never been the commercial leader for national advertising, but its tended to be a close second. Global’s growing size and i’s intended acquisition of GMG causes it some major problems, as it makes them look quite puny when compare to the big G. It was therefore important to scale up as best it can and generate more impacts to sell. The problem is after GMG’s been consumed there isn’t that much to acquire.

Since the GMG announcements they’ve done quite a bit to try and scale up. First it added Kiss to the national DAB multiplex to up its distribution, second it added Planet Rock (and its nearly 6million hours) to the group and now it’s gobbled up Absolute and their 25m hours.

Bauer’s pre-acquisition Q4/2012 share was 10.7%. Now with PR + Absolute it’s on 13.4%.

Global’s share is currently 15.6% (and will be 16.3% if they add Smooth London+West Mids or 20.2% if they get all of GMG’s stations).

Bauer are still behind, but they’ve made up some of the distance – they’ve increased their scale – and actually for not that much money – £30m in total as a one-off seems a good deal.


The next main issue is London. London is fiercely competitive and commercially everyone is connected. Global’s Capital & Heart compete for audience and advertising with Bauer’s Kiss and Magic. Magic’s on-going success has been a particular pain for Global. I expect Global’s excitement about getting their hands on Smooth London is mainly about giving Magic some trouble than it is about improving 100.4 as a station. All they need to do is destabilise Magic and it will potentially let Capital and Heart get extra share of listening and advertising. This clearly would put Bauer on the back foot.

Whilst Absolute on 105.8 isn’t as close to Global’s properties as Magic and Smooth, it’s another battery to go at Capital/Heart’s male listeners (and even keep XFM in the Vauxhall Conference too).

Smooth London and Absolute London’s move from independent to group owned suddenly opens up a truly portfolio play from Bauer and Global more akin to US radio markets like New York and LA.

Rebranding Absolute

There seems to be an assumption from commentators that Bauer will flip Absolute into Planet Rock, like it’s done recently with Kerrang in the West Midlands. Whilst that, of course, may well be their plans, I don’t think it’s a done deal. Again, you need to look at why they did what they did in West Midlands.

As I understand it, Kerrang West Midlands (alongside the national digital simulcast) was doing fine for national revenue and agencies understood it, its problem was that it was difficult to sell locally, with too many negative connotations that weren’t really representative of what the station was doing on air. It was, in effect, a waste of an FM licence. Keeping it nationwide on digital would still retain the national money (less a bit for some audience drop off) and putting something else there would potentially increase national revenue for the ‘other’ brand as well as give the option to raise some local revenue with something less scary. Hence Planet Rock on FM in the West Mids.

The same thing doesn’t happen in London on Absolute, there isn’t the local revenue question as its FM audience is a core part of the brand.

Also, you have to question what would happen to the main Absolute Radio’s hours if you disappeared it, and divvied up its platforms for Bauer’s other brands. The main Absolute Radio’s 12m hours is nearly 10% of the newly enlarged Bauer – do you want to gamble with that share? I’m not so sure. You would have to spend A LOT of money on marketing to get Planet Rock (and other stations’) figures up to account for the 12m Absolute hours loss.

The other thing I would be careful about messing with is Absolute 80s. It’s half the size of the main Absolute Radio (at a fraction of the cost) and about as big as Planet Rock with 6m hours.

Of the others Absolute Radio 60s, 70s and 00s have limited distribution and less than 200k listeners each. I’m not sure about their futures.

Absolute Classic Rock also has limited distribution, but some heritage and 400k listeners/1.6m hours – it would be easy to say that the Classic Rock job is done by Planet Rock and therefore close it, but it’s still a sizable station. Not easy.

Absolute Radio 90s is interesting. Nationwide coverage on Digital One, 500k listeners and 2m hours make it a sizable station. However, the question, like Kerrang in West Mids, is there a better use of the digital capacity it sits on?

Would Bauer grow their scale (against Global) by putting something better on that national spectrum? Something like Magic 105.4?

A move like that would mean Bauer have a national portfolio of Kiss, Magic, Planet Rock, Absolute Radio and Absolute Radio 80s – to me that sounds like a great national line-up. It also makes things a little more difficult for their friends in Leicester Square. Capital and Heart remain a quasi-network, a status quo that the Competition Commission seem keen on keeping.

Other Benefits

The other benefits of acquiring Absolute Radio is to absorb some of their skills into the wider Bauer group. This is particularly hard for companies to manage, but Absolute lead the industry on a few things. One is branded-content, being a smaller operator they have had to come up with compelling ideas to grab budget away from Bauer and Global – can they bring this skill to their new owner?

The other benefit is the skills Absolute have acquired around Mobile and In-Stream. These would be a big addition for Bauer’s other stations and would give the group another great thing to take to the market.

What I hope Bauer do recognise is that they’ve acquired not only some good brands, but some tenacious, talented people. Global’s quick growth was a wake-up call to Bauer that they had to do something. It’s spurred them on to transform their business through these acquisitions, I hope that they use these talented to people to transform their business even further.



Absolute Radio’s #redefiningradio Event

I went along to Absolute Radio’s event at Parliament yesterday – Redefining Radio. It was a good event that demonstrated to Absolute’s clients (and other guests) the way that radio (and broader media consumption) is changing.

There was a good line-up of speakers and Absolute have just put up all the videos from the event.

The session that I thought was the most illuminating was the one that explained Absolute’s thinking behind their new signed-in for streaming service. James Wigley goes into quite a bit of detail about how the system works and some of their early results too. I’ve embedded the video below:

The technology behind this kind of service is not insignificant and I imagine the changes needed for traffic management must be huge. However, what it does do is provide new opportunities for advertisers.

As a percentage of listening, streaming (to both to PCs and mobile) is still a very small part of what radio does. In fact it provides about a fifth of the hours that DAB delivers to radio broadcasters. However, that’s still 40m hours a week of listening – an amount that wouldn’t be sniffed at if you were a new entrant in the online music space.

This means that Absolute can start to target some of the money that’s going to Spotify, Last. fm et al by replicating their media formats and then aligning it with a brand that can deliver to a large audience.

It’s so easy for people to think about radio in binary terms and base all decisions on the model we happen to have had for the last 30 years. It’s great that there’s new ‘radio’ products like these that put us into some different games.




RAJAR Awareness for Evans, 6Music and Absolute 80s

The good thing about RAJAR is that there’s at least four times every year where my medium, radio, gets a go at getting some media coverage. This quarter there’s been a change to the reporting rules which focuses that even more. For the first time results are coming out just after midnight (stations get them at 1.30pm the day before) which means the results can all be in today’s morning papers.

The stories that I think are interesting:
1. Chris Evans has 9.5million listeners (up from 8.4m)
2. 6Music has jumped from having 695k to 1,023k listeners
3. Absolute 80s crashes onto the scene with a very respectable 264k listeners and 1.4m hours
4. Big jump for digital – 38.5% of the UK now listens to digital radio (that’s DAB, DTV and online) each week, this collectively accounts for 24% of all UK radio listening. I’ll take that as half way to switchover!
5. Capital back to London’s Number 1.
6. All Radio reach is up – 91% of the population now listen to the radio each week – that’s over a billion hours of listening.

I think many of these stories are a good reminder of the importance of awareness and i’m going to use the first three as examples.

Everyone is busy. Everyone is assaulted by hundreds of messages everyday. Everyone is consuming information on multiple platforms. Everyone has very fixed firm favourites.

It is difficult to tell people that you exist, a reason they should consume you, how to encourage that first trial and then persuade them to come back and spend even more time with you.

In the old days, to make someone aware of your new radio station was quite easy. Just existing on a frequency generated trial and some promo on launch day in the local paper and on the local telly would get you to most of your county. Provided, of course, you had a cheesy DJ wearing headphones and holding a balloon!

Nowadays, people aren’t so starved of media that they scan for new stations on FM, they probably don’t read the local paper (if it hasn’t closed) and likewise for local TV too (do you know who presents your local TV bulletin?). The choice explosion has also now been with us a number of years. Many consumers are used to navigating Sky+, iTunes or the broader internet to seek out media to consume. In radio there’s probably less people who stay tuned to the ‘least worst option’ than there used to be.

Short version – just being ‘new’ is no longer the best route to growing an audience.

So… back to our top stories.

Chris Evans taking over the breakfast show on Radio 2 has been a big, sustained story for months and months. It kicked off from the rumours of him getting it, to the announcement, to the end of Wogan, to the talk-ups on Drive, to the announcement of Moira, to a TV advert on BBC channels, to the launch of the show, to the backlash. Oh, and it also being on-air and being quite good as well! This is sustained coverage from all media – reminding a big chunk of people that Chris Evans (remember, that bloke you quite liked) is on Radio 2 and is going to be doing a new Breakfast Show. There was also big coverage on Radio 2, from Wogan calming his fans to Chris talking it up – it’s the biggest station in the country – a great captive audience to remind people about the change and also a great platform to explain the benefits of tuning in too.

It’s interesting to compare Chris’s additional audience with that of the station as a whole. In total Radio 2 has added 1.096m listeners and the show has added 1.101m new ones. I’d wager this means Chris has managed the double whammy of bringing a load of new people to the radio station AND retaining the same number of old Radio 2 listeners as well. Now, i’m sure these weren’t all TOGs, but it looks like he’s added more existing Radio 2 listeners to his show than he’s lost from it. That’s quite a feat – not just for Chris, but also for Radio 2, who’s seemingly managed to replace a breakfast show at the right time, with the right DJ.

Another massive radio story has been 6Music. The BBC Trust report that predated by a few days the announcement from the management that they would like to shut it, showed that only 20% of the UK were aware it existed. Now, you need to be aware of something to trial it so it’s no surprise that their audience was small.

Well, one thing that certainly spiked people’s awareness of 6Music, was the threat to close it down! The result has increased its audience by 50%! What’s also interesting about the change is that normally when a station increases its reach, its average hours drop, as the newer people are lighter listeners compared to the older ones. 6Music’s managed to do the opposite, increasing its average hours from 5.5 to 7.7. It could be interesting to look at whether the threat of losing something has brought people closer to it and encouraged them to consume more (or, of course, whether there’s some over claiming of listening).

Finally, it’s great to see Absolute 80s do so well both in reach and hours. Not only because it’s been around for just a few months but also because it’s only on DAB in London (though nationwide on DTV and online).
I think the success is down to three main things – format, brand and distribution alongside using different channels to drive awareness.

Anyone who’s carried out radio research in the last ten years knows that 80s has been a format that ‘scores well’. Why has no one done it? God knows. The format is easy to understand, there’s loads of great tunes and it manages to be ‘gold’ without being ‘old’.

Secondly, by christening it Absolute 80s, TIML have done two things. They’ve aligned it to something people already know – Absolute Radio – which has been slowly growing its own brand values about ‘real music’, allowing it to be an 80s station without being too cheesy. They’ve also got the word 80s in its name. If you haven’t got serious money to spend on marketing, you need to have a Ronseal name – one that instantly explains what it does.

Finally – distribution. Digital TV and the internet can only get you so far – especially with listening hours. A good base in London on DAB means it can be a true radio choice for many listeners and launching an iPhone app means that it can be mobile for many more as well.

Using iPhone apps has also been a great way of driving awareness. As well as there being a stand-alone iPhone app, the station’s also appeared on the other Absolute iPhone apps too. This means that a large number of people are going to be made aware of the new station. Additionally as a stand-alone app they will have driven awareness as it’s climbed the iTunes Store charts.

The other thing that they did was actively promote on Absolute Radio and Absolute Classic Rock the fact that the station exists! They did a big on-air push towards the launch with tags on 80s tracks as well as simulcasting the launch show on Absolute Radio too.

It’s amazing how radio groups rarely use their own radio stations to promote their other radio stations. They’re all scared. There’s too many unknowns. I spent a long time hearing something along the lines of “But why should we move a listener from a stations that generates £8 per listener to one that generates 50p?” The answer, should anyone ever ask you, is “they don’t just listen to your station, you dummy”.

You also have to begin by admitting, even with the best will in the world, that it’s going to get harder and harder to maintain your audience. Your best option is to keep existing listeners happy and bring new listeners to your family of radio stations. You want to be fighting for your group’s share of a listener’s hours – you already know they spend time with other people – use a portfolio approach to make sure they listens less to the other people and keeps/grows their hours with you. Also, use the fact that they listen to two of your stations to give them lots of reasons to flick between them and not over to the competition.

Is that the time? Well, in summary, being successful is all about awareness. This can be generated lots of different ways, but it does need to be generated. If your product is right (and the three examples above all start from the point of being a good product) you need to use your entire armoury of weapons to ensure you get your message out there because just existing is definitely not enough. Even if you have a DJ with headphones and balloons.

Lies, Damned Lies and Streaming Statistics

That’s probably a bit of a harsh headline….

It was interesting to read John Plunkett’s Media Guardian article about Absolute Radio’s streaming hours. The basic gist is – Absolute now beats Radio 1 and Radio 2’s listening figures and doing this puts into question RAJAR’s numbers (John’s assertion rather than Clive at Absolute’s).

However, some things that weren’t really mentioned…

* Absolute’s numbers combine all of their radio stations (Absolute Radio, Xtreme and Classic Rock)
* Absolute’s streaming numbers are monthly (RAJAR measures weekly)
* Absolute’s streaming numbers are international (as I think the BBC’s are as well) – RAJAR meanwhile just measures UK.

So, in other words, we don’t know how each of the stations break down, how much is actually UK and what the actual weekly reach of the streams are.

The weekly – monthly thing is quite interesting as the latter picks up the lighter users who pop in now and again, but not every week. In RAJAR it generally increases reach by another 70%.

Now, overall it’s very good that Absolute produce some figures, it’s more than every other commercial radio station does, it would just be handy if we could all work out what they mean!

(Clive’s responded below in the comments)


Apologies to Clive and the team, but the One Golden Square blog has become a bit dull recently. I think it had fallen into the trap of becoming just PR written in an authentic voice. You can see from the declining number of comments that there hasn’t really anything for people to get their teeth into.

However, today an excellent post has appeared from the Head of Music, James Curran, defending the appearance of Broken Strings by James Morrison, on the playlist. These are normally the sorts of things that stations hide – things that are unpopular with a small number of listeners and partly anti-brand, but at the same time are popular with a large number of listeners and actually the ‘right thing to do’.

I think it’s really good for a radio station to grapple with this in public, if not just to explain why stations do seemingly counter-intuitive things. It’s likely to make listeners a little more accepting and understanding when they tune into the station and will probably stop (a few of them) from switching in the future.