The corporation may complain about the success of the newer radio
stations, but the reality is the Radio Authority ensures the fight is
fair, Kester Fielding says
In 1996, commercial radio will be the UK’s fastest growing advertising
medium for the fourth year in a row. In the past three years, the sector
has seen audiences grow by a third, national ad revenue double and local
revenue expand by more than a half. Inevitably, perhaps, such consistent
success begs the question, when will it all end?
What’s surprising is that it’s not advertisers and the press that are
raising doubts about the future. Neither is it the Advertising
Association, which predicts that commercial radio’s ad revenue will grow
twice as fast as that for all advertising over the next decade.
Instead, the only party with a bad word to say about radio is the former
market leader, the BBC. It has consistently complained that the radio
market is static. Despite the launch of new stations, it claims that
there are no more listeners.
For advertisers there are a number of reasons why the BBC’s position
doesn’t stand up to serious analysis; not least because of its selective
use of the Rajar audience figures.
Year on year, the total number of people listening to radio has actually
risen by 400,000 a week to 40.5 million. Nine out of ten adults in the
UK listen to radio for a staggering three hours a day.
Witness the performance of rival media such as TV, which has lost 3 per
cent of its audience in the past two years, or national newspapers,
which have lost 6 per cent of their sales in the same period.
What’s crucial for advertisers in this highly competitive situation is
that consumer choice in commercial radio is expanding. Not only that,
but its listenership skew is younger than the BBC’s.
Extending choice is a marketing principle that advertisers in mature
Ironically, this has also been the BBC’s corporate battle-cry for the
past three years, albeit that commercial radio is expanding and winning
the greater audiences while the BBC has reduced some of its local
services by merging local radio stations.
At the end of 1993, Radio 1’s listening hours slumped by 15 per cent in
just three months. Since then the BBC has been on the defensive as it
strives to retain public support for the licence fee.
Radio 1’s difficulties are symptomatic of the corporation’s more
fundamental cause for concern, which is the prospect of long-term
decline in its audience share, although that’s a blessing for
advertisers and listeners.
Liz Forgan, the BBC’s head of network radio, predicts that pressure from
commercial radio is going to drive down the corporation to a 30 per cent
audience share by the year 2005. That should have advertisers dancing in
the aisles. In effect, the BBC acknowledges that a further 20 per cent
of all its listeners will become available to advertisers in the next
The BBC’s concern about competition would be justifiable if commercial
radio simply replicated services. But the beauty of the system is that
the Radio Authority has a legislative duty to prevent this from
happening. No new licence is granted unless it will attract new
listeners or serve them better.
Commercial radio is getting it right, which explains why powerful media
owners are queuing up to grab a piece of the action. Just look at the
overall stock-market price of top radio companies if you don’t believe
me - they’ve trebled over the past three years.
With the BBC’s share eroding rapidly and the number of commercial
stations expected to double, audience growth is the last of its worries.
Advertisers will continue to be offered bigger audiences and a greater
share of voice for the forseeable future.
Kester Fielding is the group media director of Universal McCann