Deloitte was quoted last week by South Africa’s BizCommunity.com as reporting that “an average of 9% of all radio ads booked [on South African radio] are not broadcast as scheduled. Based on an estimated spend of R3 billion on radio advertising in 2008, this error equates to R270 million [USD $35.6 million] erosion of ad spend per annum.”

“Through our research and market testing of this concept, it’s become apparent to us that there are significant operational inefficiencies in radio and television broadcast where advertising campaigns are flighted incorrectly. The scope of errors which we verified were not aired at all, broadcast in the wrong time channel or flighted as scheduled but the wrong material was used,” commented Audine Brooks, business leader for Deloitte’s Advertising Broadcast Certification service.

In the last month, some of the Deloitte findings show:

• Client’s radio campaign ran at a 24% error rate – resultant compensation claim was thirty fold the related certification fee
• Another major advertiser’s radio activity consistently results in an 8% error rate, damaging the reach and frequency intended by its marketing strategy
• Another TV campaign ran at 5% error rate, R149k in value booked but not broadcast accurately.

This report was quickly questioned by commenters on the BizCommunity website, suggesting that the results were not representative of the industry as a whole; and it’s perhaps fair to question Deloitte’s motives in releasing the data, given that they seem to be offering a broadcast monitoring and certification service that would address any such problems in a timely fashion.

Nonetheless the whole story is a useful reminder of the transient character of the broadcast medium, and the need for proof of broadcast in some form.

If a radio station broadcasts in the forest and there’s no-one there, can they charge advertisers for the airtime?

The UK regulatory body Ofcom (Office of Communications) has been taking an 184-page look at the future of radio in the United Kingdom – and specifically “The future of FM and AM services and the alignment of analogue and digital regulation.”

The study opens with some interesting thoughts which tend to echo David Kirk’s comments above:

“Radio, the oldest broadcast medium, is in transition.

“The overall amount of listening [in the UK] remains as high as ever and listeners are benefiting from a rapid increase in the number and range of stations they can choose from, including new community stations, additional local and national services and stations from around the world via the internet. All of this choice is available across a wide range of platforms from traditional AM and FM radio, to digital radio via DAB, digital television and the internet. There will be other new technologies to come.

“For established radio broadcasters this explosion of choice brings new challenges through increased competition for listeners and revenues.Broadcasters also face increased costs from having to invest in new platforms and must deal with increased competition from an ever wider range of media. All of these changes create significant pressures on the traditional pattern of local radio, which has emerged as a result of deliberate public policy by successive governments and regulators.

“This situation presents challenges to broadcasters and to regulators. There is evidence that the changes in listening habits, together with emerging new technologies have had a more rapid and profound impact on the radio industry than was foreseen just a few years ago when the existing legislation was put in place. As a result, the familiar ways of regulating radio, designed for a largely local analogue radio system, which have served listeners and the industry well, may be ineffective and disproportionately costly in the digital era.”

The Ofcom report included some useful predictions on future radio offerings which have some learnings for our own market:

“We foresee a radio landscape in ten to fifteen years’ time consisting of a mix of stations, probably all digitally-delivered:

• “National stations with minimal regulation to ensure diversity catering for different tastes and interests;

• “Local stations regulated to guarantee a minimum amount of local programming. We do not believe that the market would necessarily supply local programming, at least not ubiquitously around the UK, as local programming is expensive, and it is always likely to be more profitable to network as much programming as possible, even if that means a drop in audiences. We believe that plurality remains important and that some form of ownership rules should remain. Our view is that some intervention is needed to ensure at least a minimum level of local programming provision and to secure plurality of ownership.

• “Community stations for any community that wants and can sustain such a service. Their primary aim would be social gain and they would operate on a not-for-profit basis.”

Head on over to the Ofcom website to take a look at the Ofcom report. You might also want to sample the public submissions made in response to the report, which you’ll find here.