Radio: When two become one

The proposed merger of Capital Radio and GWR could trigger a wave of consolidation through the radio industry. Campaign asked two media buyers, a rival radio group and a client to give their versions of how the radio landscape will change once the dust settles.

DEREK MANNS - Starcom Mediavest

This is the start of consolidation in the radio market. With Emap and co likely to follow suit, a question-mark now hangs over the future of the likes of Virgin and Chrysalis.

Whether or not this leads to foreign media companies taking over the UK market, we just don't know at the moment. It is believed that Clear Channel or Viacom will look at the situation again after the dust has settled on the first wave of mergers. The merger of two companies on the scale of GWR and Capital is a hard task even for the existing staff who know their business inside out. Any third party would be foolish to think they could improve this process.

When you consider the current exchange rate, it's not the best time for US companies to be dipping their toes in the UK market. Plus, the merged Capital/GWR raises the entry cost to takeover of what will be the UK's lead contractor.

The industry is a hotbed for acquisitive companies, that's for sure, boosted as it is by digitisation and healthy growth. But if consolidation continues, the industry may end up with two or three contractors and two or three buying points that can no longer differentiate themselves on price.

What we need to see from any consolidation within the industry is a real focus on product to build the medium beyond its 7 per cent share of adspend.

It's also crucial that stations don't get bogged down in dogfights over share with each other and the BBC, but focus their efforts externally.

The development of the digital platform will help, encouraging more people to listen and, as an industry, we need to articulate how this is broadening the appeal of commercial radio.

The other extreme is that pressure from the City will place a new focus on cost cutting to improve profits and justify newly acquired scales. I'm sure the reality, however, lies somewhere in between.

- Derek Manns is the head of radio at Starcom Mediavest.


We support the deregulation of commercial radio and therefore, in principle, support the Capital/GWR merger. We firmly believe that a strong commercial radio industry will help to drive radio's share of display advertising revenues. And we would hope that this marriage would lead to a heavyweight commitment to driving digital audio broadcasting, attracting more advertisers to the medium.

The merger doesn't, however, magically create a good business. Of course, the new entity will have scale, but with a large proportion of non-metropolitan stations could this be a "never mind the quality, feel the width" proposition for advertisers?

Given the scale of the new company, there has to be a risk it will be referred. If it is, clearance could take about nine months, during which time both companies will continue to operate independently and the resulting uncertainty and disorientation with their teams could have a negative impact on advertising sales.

There is a size ceiling beyond which I believe it would be unhealthy for radio companies to be awarded further licences - whether that's FM, AM or digital. In making this merger happen it therefore raises the question: "Where does this company go for growth next?" We would expect to see some restriction placed on the new company's ability to apply for new licences and multiplexes.

This is the most exciting time to be in commercial radio. Emap continues to be firm in its intent to be an active player in creating value through consolidation - we have the cash to realise our ambition of "right deal, right price".

- Dee Ford is the group managing director at Emap Performance.


This merger comes as no surprise. Someone had to be first.

In the UK, there are now more than 270 analogue licences and, across the digital spectrum, at last count, there are 398 stations - and 42 fall under the BBC umbrella.

Penetration of digital radios will reach one million sets by the end of the year and, within three years, all new cars will have DAB fitted as standard, emulating the late 70s when FM arrived on the car scene.

This merger will help start to consolidate what is fast becoming a complex area.

Savings from the merger are estimated to be £8 million. As media buyers, we would like to see this money invested in better talent and programming.

Would they buy Wogan or Jonathan Ross from BBC2? Programming strands, while being true to their local roots, could be syndicated, offering high production values, must-listen-to shows and targeted audiences for advertisers. This investment will be key.

I, for one, am fed up with the BBC continually making gains on the commercial sector and duplicating the offering that eats away at available advertising audiences. The battle should be fought against Radio 2 and 4 - innovation through a "higher brow" programme offering would be a start.

With this merger, systems will be united; uniform working patterns will aid efficiencies across airtime scheduling and hopefully ease planning and buying radio campaigns. Last time I counted on our planning machine, there were more than 525 individual icons for station selection!

Consolidation for growth is paramount to the medium's continued success - stations in the same regions can now begin to fight for audience versus the BBC and not each other. If only there were a decent system to measure this fight. Thankfully, that too is in the pipeline.

- Tim McCabe is the head of radio at Vizeum


The merger is almost the perfect fit, not causing Ofcom too much of a struggle, barring some stations in the East Midlands where their share may be above 40 per cent. My immediate reaction was: why did that take so long?

But, as an advertiser, am I concerned the new company will have too much power? If I were putting 85 per cent of my budget into radio, I would be a lot more nervous than I am. But, as it is, 9 to 10 per cent of our budget goes into radio (totalling £8 million) this fiscal year, so it's less of a concern.

There's a strong chance we will increase our spend with the new group.

I have no problem with duplication of sales forces, that's an inevitability.

The merger should, as the ITV merger has, improve efficiencies between the media owner and agencies. Radio buying should become a less arduous process, but whether these improvements will be felt by the advertiser is still in doubt. I'd like to see, above all, the time and energy saved invested into making radio a stronger medium.

For certain BT products such as 118 500, radio is massively important.

But we struggle, as many advertisers do, to get under the skin of radio creatively. We have incredibly short deadlines - we behave like a retailer - and there are a number of things hobbling our ability, given the reactive nature of what we're doing. We need agencies to take the medium more seriously - which the merger should encourage - and we could do with more radio creative specialists to help us crack it.

- Steven Huddleston is the head of media buying and broadcast media at BT.

Become a member of Campaign

Get the very latest news and insight from Campaign with unrestricted access to, plus get exclusive discounts to Campaign events.

Become a member

What is Campaign AI?

Our new premium service offering bespoke monitoring reports for your company.

Find out more

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an alert now

Partner content