Six key strategic actions made in the last five years have delivered SCA a leadership position in the Australian audio market and the last pillar of our strategy transitions SCA to a digital first audio operating model as we head into the future and listeners change their habits.
Our first strategic decision almost five years ago was to focus on developing the potential of our digital radio platform, otherwise known as the ‘digital stack’ encompassing the smart use of owned DAB spectrum. This made SCA the first Australian broadcaster to effectively commercialise DAB across mainland capital cities and select regional geographies. We created 10 new and incremental digital radio stations, broadening our reach and scale while competing more aggressively with our peers in these vital economic regions.
Our second strategic decision was to build out our technology posture to ensure that our listeners could access all our stations on any device, anytime and anywhere. Our strategy was - and is - to be where consumers are with the products and services they expect from us. SCA stations can now be heard on any IP enabled device, from desktops, to smartphones (including car connectivity via apple CarPlay and Android Auto), to smart speakers (including Google Nest and Amazon Echo).
This ubiquity and ease of access gives additional horsepower at home, on the road and at leisure and is a key point of differentiation between us and other media players. To complement this, we have also invested in InStream ad technology, enabling us to control and target the ad inventory on digital devices. As a result, we have seen digital ad campaigns triple across our network. Our massive reach comes from AM/FM devices, where we have a substantial lead over the next largest broadcast radio company and on digital radio, that lead is magnified. SCA is now listening platform agnostic, which gives us the flexibility to meet the needs of consumers and advertisers on whatever platforms they choose - importantly delivering reach, addressable audiences and a revenue dividend – and our digital revenues have jumped 59% in our latest half year financial results.
Our third strategic decision was podcasting. After studying and testing the market potential three years ago, we were confident that podcasting would truly become our third audio offering, and we decided to prioritise and invest specifically in premium original content. Today in Australia, podcasting reaches more people in a month than streaming music services like Spotify, and it has grown at a much faster rate. Our participation in podcasting is consistent with our strong audio positioning and compatible with our core capabilities. Beyond increasing our engagement with users, it is a vibrant new revenue platform, providing a gateway to new products, new advertisers, and larger audiences. Our podcast platform, now on LiSTNR, will be of ever-increasing importance to our audience and revenue objectives.
Our fourth strategic decision was regional brand alignment and simplification of our brand structure, education of our advertisers and simplifying access to valuable regional audiences. We aligned our regional broadcast stations to our metro brands to scale our brand presence Australia wide. These loved brands became foot soldiers for well-known national advertisers; easy to identify, recognise and buy. We then initiated and built Boomtown – an industry marketing initiative designed to highlight the effectiveness and economic value attributed to these vast audiences. We educate and engage with national advertisers about the benefits they can gain from the regions more than ever before, creating an improving revenue stream – with 7% growth in regional radio ad revenues in the half year - and a sustainable and growing earnings profile.
Our fifth key strategy was to interface directly with clients to understand what their challenges are and work out how SCA is best able to make a difference to their business. Many years ago, we realised that to grow the revenue to radio from agencies, we had to expand our capability to deliver end to end marketing solutions for advertisers. Our marketing solutions teams now design and execute marketing strategies directly with major national clients as well as via our agency partners. That puts us upstream in the planning phase and often ahead of revenue allocations to platforms. Today, we pride ourselves on having solid working relations with the majority of Australia’s top advertisers. Just under half our group revenue is directly sourced from a growing list of direct advertiser relations – while our direct exposure to advertisers, expertly managed by our agency partners, is also growing exponentially. SCA has taken an active lead in developing an industry buying and negotiating platform called RadioMATRIX – which simplifies access and ensures trading with our platform is easier, safer and more engaging.
Finally, our latest key strategy is the launch of LiSTNR which will be the ultimate audio destination for all Australians. The number of Australians accessing digital audio has doubled since 2016 and is projected to reach 80% of Australians by 2024. LiSTNR will provide a personalised listening experience that easily enables consumers to discover a world of premium, relevant audio in radio, podcasting, music and news, with local, bespoke content that is timely and timeless. LiSTNR will be a primary generator of listening data, providing a deep understanding of our audience and allowing us to deliver a valuable, targeted audience at scale for advertisers.
The world of audio advertising is accelerating. SCA is firmly positioned to take advantage of the larger audiences LiSTNR will grow - a revenue base that has already expanded by 150% in the last 12 months. LiSTNR combines a compelling data and analytics suite powering a new range of targeted, attributable advertising products and services. LiSTNR will allow SCA to deliver the best targeting, analytics and attribution products available from digital advertising in addition to our high-reach broadcast inventory. This will set us apart from others and provide a foundation for more robust revenue growth as we tap into the increasing digital pool of ad revenue.
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