Commercial Radio Should Aim For 10%
Business guru Sir John Harvey-Jones said yesterday that commercial radio should raise its sights and aim for a 10% share of ad revenue within five years. His comments, made at Tuesday’s RAB conference at the Royal Lancaster Hotel, came during a mixed assessment of commercial radio’s past performance and its future position.
Sir Harvey-Jones praised local commercial radio for being a medium which had woven itself into the fabric of community life and said that in many places it had supplanted the role of the regional press. He believes that listening is a much better form for receiving ads and praised radio’s unique ability to reach business men both at home and in the car.
He did however point out that there were “many serpents in radio’s Garden of Eden”: past success should not cause complacency and the only way for radio to maintain its growth was to set itself high targets and to keep pushing forward. He called for commercial radio to stop squabbling within itself and aim for increasing the total radio listenership – rather than individual stations competing for listeners.
Justin Sampson, director of operations at the RAB, told Newsline that he thought that commercial radio should certainly be looking to increase revenue but doubted that a 10% share could be achieved within five years. He predicted that a 6% share would be achieved by the end of the decade with 10% being a realistic figure by 2010. In order to increase revenue Sampson believes that the creative standard of ads must be raised and said that “in the long-run” the increasing number of stations would increase radio’s audience by about 20%. Gerry D’Angelo, media group head at Leo Burnett, agreed with this assessment of the 10% figure, saying that it was the “Holy Grail” for radio to aim for. He stressed however that if it is to be a realistic aim then the commercial radio industry must take on an outward vision and stop its inward competition. He also believes that radio must begin attracting the big ad spenders such as Proctor & Gamble if it is to significantly increase its revenue share.
Adam Farndell, head of regional media at Optimedia, commented: “The sector is becoming increasingly dominated by a handful of key players whose first concern is their shareholders’ demands, which I believe is often at the expense of product quality. The stations can only sell the impacts they’ve got “in the book” and we are already seeing close to saturation in a number of market areas – unless buyers suddenly became prepared to pay £5+ per thousand for a medium where £2 is only recently accepted as a viable level, national revenue growth will grind to a screeching halt.”
Tim Mellors, chairman of Mellors Reay & Partners, also spoke at the conference regarding the creative side of radio ads. He used his “fingerprint” method to demonstrate how most people regard radio as a medium and how they perceive radio ads. This method uses group research to rank how a product is regarded by the majority of people: the nearer the centre of the fingerprint the more relevant each quality is for that product.
His speech demonstrated that most people see radio as ‘involving’, ‘dynamic’ and ‘entertaining’, with ‘bold’, ‘classy’ and ‘quality’ being just off centre; ‘boring’, ‘bland’, ‘hard sell’, ‘downmarket’ and ‘annoying’ were on the edge, if not off the edge, of the fingerprint.
When it came to perceptions of radio advertising however the opposite was true: ‘boring’, ‘bland’, ‘samey’ and ‘downmarket’ were at the heart of the fingerprint, while ‘creative’, ‘dynamic’ and ‘entertaining’ were off the picture. He said that stations were partly to blame for the poor quality of ads because many were produced in-house with little thought to the creative treatment.
In the afternoon the Media Forum debated the planning and buying of airtime during which Neil Jones, from TMD Carat, produced a letter from Capital Radio which stated that certain conditions had to be met for it to broadcast ads. Jones believed that these “caveats”, which included conditions on pricing and the amount of notice given for ads, were unreasonable and could be seen as arrogant on the part of Capital. Duncan George, from Capital, said that the conditions were not set in stone and there would opportunities for them to be “discussed ” if anyone was unhappy.
Robert Ray, from the Media Centre, then brought up the issue of radio airtime pricing which he believed had recently seen unjustifiable increases. David Mansfield, from Capital, responded by saying that the issue of pricing was difficult and more discussion was needed though he did warn of the dangers of stations setting their own prices. Susan Oriel, from Media Audits, agreed with this, saying she believed the industry as a whole did not think station pricing was acceptable and that the best way of agreeing prices was to use audits. In terms of accountability, a vote in the hall showed that 52% of clients did not believe stations were presenting enough data to their customers, with only 17% satisfied.
Sir Tim Bell, chairman of Lowe Bell Communications, finished the day by calling on commercial radio to protect its interests and follow BSkyB’s example by launching a range of special interest stations. These would include stations for children, news, and sports coverage. Sir Bell also stated his belief that BBC radio has been allowed too much listening share and Radio 5 Live is the kind of station commercial radio should have thought of first.