MEDIA: FORUM - Advertisers are tuning into digital radio

Has radio taken its biggest leap forward in a decade given the recent results for digital radio, Alasdair Reid asks.

If you believe the digital enthusiasts, radio passed a significant milestone last Thursday with the publication of quarterly Rajar audience figures including results for 17, yes 17, national commercial radio stations. The big news isn't so much about the audiences figures themselves but the mere fact that there are so many new national opportunities here.

Since 1992, we've had three national commercial stations but two of those - Virgin and talkSPORT - have been on AM frequencies and the sector has easily been outgunned by the BBC with its five established national brands.

Now that cosy old world has been blown apart, courtesy of digital. At least that's what media owners will tell you. But in reality, it's a bit of a muddle. We've got dedicated national brands using all the platforms - Freeview, cable, Sky Digital and DAB - and some are only on digital TV. We've got quasi-national brands that are merely aggregating their multi-local audiences and we've got stations that are basically still local and geographically specific in their references but which are now given wider distribution on a hit-and-hope basis.

Isn't the big danger that new national commercial stations will cannibalise the existing commercial audience rather than taking the fight to the BBC?

Not really, Tim Bleakley, Emap's broadcast sales director, says.

He argues that the inevitable long-term outcome will be for the commercial sector to increase its audience share versus the BBC. He comments: "It will attract new listeners and different types of audiences. In any particular area the make-up of audiences for different stations will change shape but commercial reach will increase almost inevitably.

"There are certain audience segments that have been starved of dynamic choice in the past. There was nowhere for them to go. Now there will be something for them. This will definitely be of interest to advertisers and there are no trading barriers in radio to stop money following audiences - and there is already a significant audience there now."

Paul Davies, the operations director at Capital Radio Group, agrees.

He states: "Nationally, the economics work well for everybody. If you look at a station on a regional basis, the numbers might not be that huge but if you aggregate them across the nation, you might have a proposition that is quite significant."

But Guy Phillipson, the head of advertising at Vodafone, isn't so sure.

Yes, he admits, these days he is able to listen to the London station Jazz FM in Oxfordshire but he reckons it might be some while before the audience levels on digital become significant.

"There have been some good results. Kiss seems to have done very well on the Freeserve platform - which probably reflects the fact that there's a smaller selection of stations there. You can be overwhelmed by what's available on the Sky Digital platform. But DAB isn't pulling in much in the way of audience (there are only around 200,000 sets out there) but I hope they persevere with that. In the end, it's going to be about good programming distributed in a better way."

Steve Parker, the head of radio at Starcom Motive, is also reserving judgment: "In some cases, the new stations are building on a relationship they already have with a magazine but we still need media owners working with us to understand how the relationship (between radio station and audience) works.

"But, yes, as there are more national opportunities that will inevitably change the way that radio is sold. If you are a planner or a buyer in radio, you're now considering radio for clients that you weren't before. If, say, One Word was communicating with your target audience in an engaging and unique way, you might well contemplate pulling money over from another medium."

And Tim McCabe, the connections director at Vizeum, says national digital is just one of a number of interesting trends in radio. "Digital is still a very small proportion of impacts and that won't change overnight. For the time being, it will represent a relatively small opportunity but it's definitely an exciting development that will add a new dimension to the medium. Some people are already trying to sell it - some with greater success than others. Where there is a significant and relevant audience and where it's easier to buy by going down this route and where there is complete (trading) transparency in doing so, then they can certainly talk to agencies about this," he states.

- "Whereas local radio might have a general appeal for the whole community, national channels will have more of an appeal for these branded communities - people who are defined not so much by geography but by attitude."

Tim Bleakley broadcast sales director, Emap

- "If you look at Xfm, it's one analogue licence but now it's on several multiplexes and increasingly we're selling it as a national station. And if you have flexibility, as we do with a station such as Xfm, we can sell a major sponsorship across all 17 licences."

Paul Davies operations director, Capital Radio Group

- "The first stage of the sales argument is all about buying into a lifestyle community. But stage two will be all about showing that the digital platforms are continuing to perform well. It's on our radar but I think we'll need more in the way of research."

Guy Phillipson head of advertising, Vodafone

- "We would not want to give it a disproportionate amount of our time and energy but we're certainly not going to dismiss it. In fact it plays to the strengths of an agency such as Vizeum, which is always looking to see what the next development is likely to be."

Tim McCabe connections director, Vizeum.

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