Contactless Payments: All Rise

Some comments are just too long for Twitter but I’m unsure they are worthy of a post like this. Still, having no other place I want to comment, here goes.

Last October Apple launched Apple Pay; the contactless payment mechanism using your mobile phone and not a plastic credit card. At the time I wrote a quick summary of my payment day for those who were new to contactless payments (hint: not really aimed at the UK market). It’s now pretty mainstream.

According to the BBC, in the UK, £2.3billion was transacted this way in 2014 where “30% of all transactions [in London] below £20 were contactless,” according to Barclaycard. Last Friday the BBC even had a Six O’Clock News item on the rise of contactless payments, with the three-fold year-on-year rise amusingly illustrated with loaf tins at a bakers (pun, one assumes, absolutely intended). They also noted an increased transaction limit is coming, which is useful. See the video on BBC News.

But no mention of any of the non-plastic card ways to pay: pay tags or mobile phones. I found that a bit odd given they are likely to grow quickly as they are introduced.

Elsewhere: Will The Money Trail Drive Radio Innovation?

A couple of weeks ago, I received a tweet from an Australian chap called Anthony Gherghetta (@wheredidgogogo) who, based on my previous writings about a personalised radio service, suggetsed I consider adding some of them to a collection he was curating over on the writing platform, Medium, about The Future of Radio. I thought about this for a while but, while I was in Melbourne recently, local news about audience figures and money got me thinking about how such a personalised product would be funded. So I wrote Will The Money Trail Drive Radio Innovation? over on Medium (which, I have to say, is a lovely writing platform). As always, I also keep my own copy here but I do suggest you head to Medium to read it!

In the introduction to his 1979 book, The Piccadilly Story, Philip Radcliffe tells how Piccadilly Radio’s broadcast frequency – back then expressed as 261 metres, medium wave – was so ingrained in the Manchester community that shopkeepers would, at a bill of £2.61, simply ask their customers for ‘Piccadilly, luv’.1

For some reason, this – I have always assumed apocryphal – story popped into my mind when sat in a Melbourne coffee shop this week reading about Kyle & Jackie O’s latest audience figures.

By way of a quick summary, last Wednesday’s news was all about the top-rated Sydney breakfast duo who switched stations at the start of the year and, when the first audience figures were released, seemed to have carried most of their listeners to their new morning home. An astonishing switch that generated discussion on my Twitter feed of UK radio pundits. In itself, this has much to say about the power of broadcast radio and why the personalised radio future I envisage, maybe a way off yet.

While there was plenty of commentary about the audience numbers there was, in many ways, a more interesting number buried towards the end of The Australian’s piece on the news. The move had wiped $350 million off the share price of the duo’s former employers Southern Cross Austereo.

Both of these stories – some 35 years apart in their origins – tell of audience scale and it’s relationship to money. Historically, for entertainment media, the two are undeniably intertwined. And this relationship got me thinking, how would the finances of a personalised radio service stand up? In some ways scale and personalisation are not natural bedfellows but does that mean a personalised radio product would struggle to find revenue? In a previous musing on this topic I suggested that sponsored content blocks, mixed with a listener’s own music selection, might be a way forward. But when the audience is combining a unique mix of content selections, can this work? After all, what would the advertiser be buying and can it be sold at a profit?

To help answer that question, and in parallel to any thinking about a future radio product, we have to consider the funding. Is audio content suited to a subscription model so that a radio equivalent of the paywall could be erected? SiriusXM might suggest that it is. But are there many other countries where substantial audiences pay for radio content? None spring to mind. Perhaps there’s a smartphone subscription app-model that may work. But I don’t think that there’s precedent for profitable apps in-car (quite yet) or on kitchen radios. Which leaves us with advertising as the primary revenue model.

There’s a shift in media buying that’s being driven by the connected world whereby advertising space is increasingly traded in real time. On the web, a publisher may offer up an advertising spot to the market in the milliseconds before the advertisement is shown in the browser. One of the leading players in this space, The Rubicon Project, suggested in September 2013 that an average of 40% of online display advertising was traded in this way. In April last year Forrester suggested that almost 25% of online video advertising will be traded programatically by this year.2 The latter figure is important, because this automated trading will become an increasingly important way to generate revenue from television content when consumed online. And if TV goes there, why should we assume radio won’t?

There are many attractions of buying advertising space this way but the ability to easily group audiences that are increasingly consuming fragmented media is one. It’s becoming just as efficient to reach these disparate audiences as it used to be to reach mass audiences by buying, say, Piccadilly Radio.

Interestingly, when researching this piece I couldn’t find numbers for the amount of audio media traded this way. There are companies who specialise in the automated trading of radio advertisements but, when compared to those in the digital display or video space, they appear forgotten. Then again, perhaps it’s not surprising. There are a few stations doing new and innovate things with radio commercials – in the UK, Absolute Radio’s In-Stream is a good example – but they are the exception and not the rule. Therefore where’s the market for the automated trading of radio ads?

It seems to me, radio is missing out. If the advertising world is shifting to more automated way of buying then that means, by necessity, they are buying a connected product. Yet much of radio’s connected offering is simply delivering the same old product in a slightly newer way. For revenue growth, and maybe even for revenue parity, the radio industry has to adapt to the connected world in more ways than just offering up a stream of the broadcast signal.

Undoubtedly, there are many hurdles before there are mass market personalised radio products. Kyle & Jackie O have shown the enormous power of today’s mass-reach broadcast breakfast radio product. Yet, also this week, the BBC announced plans to close the youth-oriented BBC Three television channel. While reduced finances are the reason behind the proposed closure, the channel was selected in part – according to the press release – because it’s young audience “are the most mobile and ready to move to an online world”. A trend that suggests future audiences have different expectations of their media consumption.

There’s a convergence here that the radio industry needs to see: an undeniable shift to consumption on connected devices. This represents opportunities for both sets of radio’s customers. With the right product, audiences will increasingly personalise their radio experience but, I believe it may not be listeners who are the drivers of such innovations. The advertising industry, increasingly looking for ways to better justify their media spend, is pouring an ever growing share of their budgets into automated buying. Radio needs a product to capitalise on this move.

So it maybe that the money trail is the driver of innovation in the radio space and it the advertising industry that pushes radio to reinvent itself for the connected world.

1 Radcliffe, P. The Piccadilly Story, Blond & Briggs, 1979. p9
2 Strictly 24.7% of video spending by 2014.

Elsewhere: Blogging & Advertising

Over on the ukbloggers-discuss at Yahoo Groups, we’ve been having a discussion about advertising, prompted by Tom Coates asking, “Did we ever come to any conclusions about the appropriateness of advertising?” in the context of blogging. In essence we’re saying that blogging is personal and, if you decide that your audience will accept advertising, what does this mean and how iwll it work for a blog?

Over on the ukbloggers-discuss mailing list at Yahoo Groups, we’ve been having a discussion about advertising, prompted by Tom Coates asking, “Did we ever come to any conclusions about the appropriateness of advertising?” in the context of blogging. In essence we’re saying that blogging is personal and, if you decide that your audience will accept advertising, what does this mean and how will it work for a blog?

I started quite open to the concept,

I believe advertising is a compromise. Are you comfortable with a reader questioning your independence? I know it’s a very grand term but, nonetheless, it’s at the heart of the advertising debate. It may not matter to the vast majority of readers but it could (should?) to some. I don’t think anybody but me cares about my independence but it is the reason why I wouldn’t want any advertising on my blog.

But is it that simple? Blogging generally costs something – hosting, bandwidth, time and effort. Should a blogger be entitled to get a little something back? I don’t think advertising is a bad thing on blogs,

When typing my previous post I was being very careful not to say that I felt the acceptance of advertising is inappropriate (because I don’t think it is) but I do believe that while it shouldn’t change what you do or what you say, it may very well change the way you are read. And for some people, that’s a consideration (admittedly, probably not for many).

Or am I putting an undue emphasis on editorial independence for bloggers? Perhaps I am. Is it a silly notion to (try to) apply to weblogs in all their forms?

But then Tom introduced me to, a site aimed at recruiting bloggers with reasonable audiences “who would be willing to help advance their marketing efforts”, and introduced the concept of blogging about products you may have been sent as freebies or paid to write about. I think I turned cynical,

My first reaction was that it proved my point about editorial independence. Then, I was going to cite traditional broadcast media. There are some rules there to ensure clear distinction between programme and advertising content.

However, when you think about it, how many morning DJs talk about having seen new blockbuster that’s not released yet? Many of them. And most of them went for free. You do not consciously think their opinion is biased.

Perhaps the online world is playing catch up with traditional media. And I can’t decide if that a good thing or not.

Maybe it’s sad that I cling to the notion that connected networks somehow empower people. I am not against the commercial web but weblogs are a great example of a (generally) positive use of the technology. When the marketers get involved it changes my expectations. It’s not a surprise but the next time somebody raves about something new won’t you question it (even a little bit)?

Is it possible to turn into a world-weary cynic in the space of two hours?

And now? Well, I stand by my thoughts that you should be clear about what you write. Blogging to me is the fulfilment of the web’s promise of personal publishing for everybody. But, of course, money always gets in the way and there’s nothing wrong with advertising online. After all, it’s what I do, isn’t it?