Video didn’t kill the radio star, and nor has David Cameron

In a media year dominated by phone hacking and the rise of social media, it’s all too easy to overlook the unlikely success of one of our oldest contingents: radio.

Radio ends 2011 in a far healthier state than many of us, including myself, believed possible. I’m in good company, Martin Sorrell’s media buying powerhouse GroupM, also failed to recognise how well radio has sold itself this year, and has been forced to make a significant last gasp revision to its annual forecast.

Instead of the stagnant ‘zero growth’ tipped only in the summer, GroupM now expects radio ad revenues will grow 5% in 2011. Similarly, ZenithOptimedia also admitted to underestimating the success of commercial radio this year, lifting its own forecast from 0.9% predicted two months ago, to 2.3% growth.

Both revisions provide early recognition that the sector has successfully generated additional revenue since losing its biggest advertiser, COI, last year.

It came as no surprise that in the new ‘age of austerity’, the government’s position as the country’s largest advertiser, which it had held the previous two years, was deemed simply untenable for the debt-ridden Tories.

For years radio had been among the main beneficiaries of government spend, with major campaigns from Change4Life to anti-smoking and alcohol abuse, all relying heavily on the efficient, mass reach radio has to offer.

Deep cuts from government spend via COI meant big losses for radio. In the 12 months to Feb 2010, COI had been responsible for almost a quarter of radio advertising revenue, some £58 million worth. Today, as 2011 draws to an end, this has shrunk by more than two thirds, to less than £15m (Nielsen).

The year started ominously, with broadcasters battling up to 15% drops in ad revenues during the first quarter. However, as I noted at the time, from the second quarter onwards, those in commercial radio were in more control of their own destiny, as the previous year’s COI spend was flushed from the system and yearly comparatives became easier.

Radio sales outperform the market

And we have to conclude those in the business have risen to the challenge. In the third quarter of 2011, some 350 brands spent more than £60,000 on radio, the highest number on record, and a 10% rise over the same period in 2010.

Underpinning this commercial success is the UK’s enduring and often overlooked love of radio.

The latest Rajar figures highlight that more than 90% of the UK population, some 47 million adults, tune into radio every week. This is up more than a third of a million listeners (375,000) on the same period last year.

What ITV’s flailing new breakfast show DayBreak would give to have Johnny Vaughan’s 1.13 million people tuning in each morning. As the IPA’s Touchpoints 3 study highlights, radio is still the nation’s second most-consumed medium after TV, accounting for more than a quarter of the average adult’s time spent with media a day.

No real surprise then that commercial radio continues to be a talent hotbed regularly trawled by those in need – most notably this year by ITV, who poached former Absolute star Chris Goldson.

Simon Redican, managing director of the Radio Advertising Bureau, credits radio’s record audiences with giving broadcasters more confidence exactly when they needed it this year, and providing clients and agencies a timely pause for thought.

Redican also believes the sector’s market leader, Global Radio, deserves recognition for its part in driving innovation. Between June 2010 and June 2011, the home of Capital, Gold and Heart generated £17 million worth of new business, a 30% lift year on year, despite the wider economic restraints.

The strategic decision to position radio brands as part of a national sell also appears to be paying off across the board, with Global’s Capital and Heart, GMG’s Smooth, and Bauer’s Kiss networks all reporting positive rises in yields.

“The success of the creation of the national networks is testament to the insight that brands were moving away from localised campaigns,” says RAB’s leader. “It has made it easier for clients to navigate their way around national radio brands and they have been well sold, client gets them.”

The RAB itself deserves its fair share of credit too, through research like Media and the Mood of the Nation, and hosting industry debates, the radio body has helped galvanise all concerned precisely when they needed it most.

There has also been the welcome arrival of the digital Radioplayer interface, a joint venture between commercial and BBC stations in March, which is now believed to be attracting around 7 million unique users per month. And its momentum looks set to continue, with potential new audiences being sought all the time through innovations like Radioplayer’s Facebook app.

Total internet listening hours were up 15.4% in the last quarter, while access via mobile phones continues to climb, currently up 24.2% year on year.

A further fillip to radio’s coffers this year has come from the relaxation of the sponsorship and promotions (S&P) regulations. Mark Banham provides a roundup of the doors S&P is opening up here.

All of which means the outlook for radio as we enter 2012 – with audiences up, ad revenues rising, platforms increasing, innovation apparent, industry body active, and regulation relaxed – is all decidedly optimistic.

And that all makes for a far more positive review of 2011 than if I’d focused on any other traditional media.