Forget all the troubles at GCap. If you're looking for a true marker for the end of commercial radio's first golden era in this country, then search no further than Douglas McArthur, OBE. On 31 May, McArthur, the chief executive of the Radio Advertising Bureau, quits his post as marketer-in-chief for the commercial radio industry following the merger of his organisation into a new structure, called RadioCentre.
He will continue his association with the business in a consultancy role, but the medium will feel very different for the loss of his presence at a senior level. He has been in the role for 14 years - slightly longer if you include his role in devising the RAB remit.
Commercial radio wasn't a happy place to be in 1991. For a start, there was a recession triggered by the Iraqi invasion of Kuwait and first Gulf War, and most media were under the cosh.
For the established independent local stations, the timing couldn't have been worse - because national commercial radio was on the horizon. The medium's 2.7 per cent share of national display ad revenue was about to be spread even more thinly.
There was also a growing acceptance that the way the medium was being sold - there were two sales houses, BMS and IRS - was completely inadequate.
Your average sales rep was low-calibre, badly trained and focused largely on stealing business from the rival sales house. Top clients and mainstream agencies regarded them with, at best, suspicion.
A group of six radio company bosses, led by Neil Robinson at Metro, Capital Radio's Richard Eyre, and Jimmy Gordon from Radio Clyde, decided to act - and they brought in McArthur (who'd worked on previous projects for Gordon) as a consultant. The aim was to set up a third sales house, an elite hit squad that would focus on top clients. McArthur began researching the sorts of issues that this team would have to address.
And what radio needed as a priority, McArthur argued, was not better sales but more education. Even media agency planners who should have known better were vague about the simplest facts about commercial radio - such as the size of the audience it delivered. Years later, Eyre would admit privately that at the time he hadn't really understood what McArthur was on about. But, whatever it was, it was surely worth trying.
1. The RAB launched in February 1992 with a staff of one (McArthur) and the financial backing of half of the commercial radio industry. It had a budget of around £500,000. In May 1992, it doubled in size when Justin Sampson, then the head of research at the sales house IRS, was hired. By October of that year, five more staff had joined.
2. One of McArthur's early priorities was convincing refusnik radio companies to sign up to fund the RAB. Funding was pro rata by advertising turnover and radio bosses with short-term tendencies asked what they'd get for 1.3 per cent of their revenues. Others pointed out that if the RAB was a success, they'd reap the benefits whether they paid or not. One of the hardest nuts to crack was GWR, run by Ralph Bernard - but within two years, every radio company was on board.
3. Radio revenues started to pick up in 1993 and 1994, but many believed that this was just a natural function of economic recovery. In 1994, a Henley Centre report questioned whether radio could ever expect to take as much as 3 per cent of UK ad revenue. But during that year, the RAB hit full stride. With its budget more than doubled, it had a staff of 23.
4. By 1998, there was no longer any doubt about the RAB's ability to deliver real growth for the medium. Its revenues were now £418 million, compared with £128 million in 1991. The RAB was even able to offer a rebate, cutting its funding levy to 1.1 per cent.
5. To the end of 2005 (by which time radio was taking a 7 per cent share of UK media spend), the RAB had cost the industry a total of £33 million. Taking 1991 levels as a base, the extra revenues it has helped create are estimated at around £3.5 billion.
6. The RAB's aims and structure have been imitated by other media bodies, including the Internet Advertising Bureau (launched 1997), the Newspaper Marketing Agency (2003) and TV's Thinkbox (2005).
WHAT IT MEANS FOR ...
THE RADIO INDUSTRY
- The radio industry will be making a dangerous mistake if it assumes that the RAB's work is done.
- RadioCentre merges the functions of the radio companies' regulatory and lobbying organisation, the Commercial Radio Companies Association, with the RAB. It will house a diverse range of activities, from the Jicrit research organisation, the production of syndicated programming such as the Hit40UK chart show and the Radio Advertising Clearance Centre.
- The official line is that the new body will be more effective at marketing the medium. Some critics worry that it is merely a cost-cutting measure made by a rump of senior radio executives who were always basically hostile to the whole concept of the RAB.
- RadioCentre must choose a new chief executive wisely if the marketing function is not to get lost in the mix.
ADVERTISERS AND AGENCIES
- Creative agencies have always found radio an awkward medium with which to work. They employ few copywriters with old-fashioned script-writing skills, and it's not a medium that generally sets pulses racing in creative departments. So in recent years the RAB has focused its attentions, and budgets, on stimulating creative departments.
- On the media agency side, much of the best talent has jumped ship to media owners. At the moment, there are few passionate advocates for the medium among senior agency ranks.
- Meanwhile, advertisers are still not sure what their radio advertising says about them. They've never been confident at assessing how good (or cool) their radio work is.
- Those looking for an excuse to scale back their commitment to the medium will view the RAB's demise as an opportunity to be grasped enthusiastically.