RAB mulls increase in commission rate

The radio industry is working on proposals for a new trading system designed to reward agencies for increasing their spend on the medium.

Among the options being considered is a move to a system similar to that which operates in outdoor trading. Agencies are rewarded with higher commissions, typically 15 per cent more than they would get from other media.

The Radio Advertising Bureau is co-ordinating a consultancy project for the major media owners. Radio companies are thought to have recognised the complexity and level of work involved for agencies in buying radio.

Increasing commission across the board is seen as one possible route forward.

The review of the radio trading environment has been prompted by declines in commercial radio audiences during 2005, which have in turn resulted in ad revenue declines for some of the top radio groups. Ralph Bernard, GCap's chief executive, announced last November that its revenues were down 6 per cent in October and 5 per cent in November.