Spotlight On: Radio Sales - How will Capital’s Virgin deal change the radio sales map?

The merger of the stations means MSM has to close. Alasdair Reid investigates.

The merger of the stations means MSM has to close. Alasdair Reid

investigates.



It was perhaps time for a redrawing of the radio sales map - after all,

it’s only a matter of months since the last upheaval, with the demise of

IRS and the ’will-they-won’t-they?’ speculation about whether Emap was

about to set up its own in-house operation.



The only geographical certainty, following Capital’s acquisition of

Virgin last week, is that some of the Virgin sales team will make the

trek to Capital’s headquarters in Leicester Square (Campaign, 9 May)

Emap will be back in the spotlight, but this time the speculation will

also embrace GWR. Media Sales and Marketing, which currently represents

both groups, will soon be no more.



MSM, which is owned by Capital, needs to be sold or wound up to keep the

Monopolies and Mergers Commission sweet following the Virgin deal.



Capital Sales and Marketing, which will sell Capital and Virgin

following the merger, will now account for almost half of national sales

revenue.



Who are the winners likely to be as the dust settles? And what are the

pros and cons for advertisers?



Almost everyone agrees that the biggest winner in all of this will be

Katz Radio Sales, which is likely to pick up most, if not all, of the

pounds 6 million-worth of non-GWR or Emap local radio business held by

MSM. There has also been continuing speculation that it may set up a

joint venture with GWR. GWR has in-house experience, particularly in

selling sponsorship packages for its regional stations, and its Classic

station has its own sales team, but it is not ready to go it alone,

according to some observers.



Simon Lynds, the chief executive of Katz, will not comment on such

speculation but he does admit to feeling bullish. ’There is no doubt

that we will pick up business as a result of the closure of MSM,’ he

states. ’We have been successful in picking up new local radio business

recently, and the MSM situation will give us an inside track on winning

more. We will be pitching for most, if not all, of the available MSM

business.’



Emap must wish it had done its own thing the last time around - but this

push will no doubt compensate for its inability to jump before. In any

case, the MSM contract was due to end in early 1998, so it’s not as if

Emap hasn’t already been reassessing its options. Tim Schoonmaker, the

chief executive of Emap Radio, says he won’t be rushed into any

decisions: ’We’re making plans but the most important thing now is that

MSM continues to service its customers. I know that will not be easy

given all the uncertainty, but David Mansfield (Capital’s commercial

director) handled a similar situation when he was at Thames TV. He knows

what needs to be done.’



Agencies will also be keeping an eye on that situation. Robert Ray, the

deputy managing director of the Media Centre, believes that this

redrawing of the sales map comes at an opportune time - it’s a chance

for everyone to improve. ’In audience terms, the merger will be welcomed

if it helps Virgin take on Radio 1 more effectively and expands the

commercial audience.



On the sales side, we are looking for far greater accountability and

service.



’We are not so worried about concentration of sales - we are used to

dealing with strong sales organisations. Nor would we be too concerned

if parts of the market went the other way and became more fragmented, so

long as we move towards systems common to the whole industry.’



Lynds would endorse that. ’Radio continues to build audience and

revenue.



The last thing it needs is for the market to become so diversified in

terms of ad sales that in the end it will be too complicated for its

current stage of development. We need to ensure that radio remains an

accessible medium,’ he says.



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