Magazine article Marketing

Radio Daze

Magazine article Marketing

Radio Daze

Article excerpt

Buy-ups, launches and dizzying listening figures are testament to the success of commercial radio. But this may just be the warm-up

In recent years, commercial radio has become that most frightening of all journalistic nightmares, a "good news" story - and last month it sailed past 50% of all radio listening for the first time, leaving the BBC trailing. In fact, from April to June 1995, it generated [pounds]66m in ad revenue, a figure which suggests that a 5% share of the UK's total advertising cake will prove an easily-attainable goal.

These facts alone would be enough to justify the sector's burgeoning confidence, but they have been further boosted by new figures from the Advertising Association predicting that, while total advertising will have grown 40% by 2007, commercial radio will increase in value by a staggering 190%.

A number of factors have contributed to this, but two in particular stand out. The first is the explosion in the number of stations. Following the 1990 Broadcasting Act, the Radio Authority instigated a licensing programme and the total number of stations has risen by more than a third in three years to 175.

The tally now includes three national (Classic FM, Virgin 1215 and Talk Radio UK), five macro-regional and a host of local stations. For advertisers, it has had the dual advantage of expanding the total listenership and introducing one-stop national sales propositions (see box). With Dublin-based Atlantic 252, national stations now claim 11% of UK listening.

The second key factor has been the success of the industry's joint marketing initiative, the Radio Advertising Bureau. In less than two years it has helped to double radio's revenue from national advertisers and continues to be a persuasive force in demonstrating the medium's credibility.

"After a period of consolidation, commercial radio is growing again and radio is a mass market medium for advertisers," says RAB's Justin Sampson.

Unsurprisingly, radio's improving fortunes have inspired a frenzy of acquisition activity from the media heavyweights. Capital has been quickest off the mark, swallowing up not only Southern Radio but Midlands Radio - which gave it a Birmingham-based operation similar in profile to its London station.

By contrast, EMAP Radio has built its empire from scratch in just a few years. Having started with footholds at Liverpool's Radio City and London's Kiss FM, EMAP swooped on the North-west, buying Manchester-based Trans World Communications from Owen Oysten, making it market leader in Leeds, Manchester, Lancashire and tracts of Wales.

More recently, it turned its attention to the Northeast, where it is currently embroiled in a [pounds]98m takeover of the Metro Radio Group. If successful, the deal will make it the UK's biggest single radio group in terms of audience share.

EMAP's acquisitions were aided by a favourable regulatory regime. Unlike the situation with national newspaper publishers, the fact that EMAP controls huge regional newspaper and consumer magazine interests did not hold it back. When the government relaxed ownership restrictions last May, EMAP was given an almost clear run to create a radio empire.

Some other substantial media operators have chosen to expand through the RA's licensing programme, such as the Chrysalis group - which holds two regional licences under the Heart FM banner - and the Virgin group.

If quizzed on the impact of such changes, insiders generally respond that UK radio has come of age. From Scottish Radio Holdings - which controls 42% of the Glasgow market - to Capital, dominant in London and the South-east, the whole network is now run by efficient media operators who understand the importance of working together.

EMAP Radio managing director Tim Schoonmaker sums it up: "United we stand. Most of the companies involved in radio see the competition as being other media. That has given us muscle. …

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