Commercial stations – particularly Classic FM – have established their medium’s credibility. Now the sales houses need to do some catching up

The apparent boom for radio continues as illustrated by the latest revenue and audience figures published by Rajar.

Commercial radio during the second quarter of 1995 took a little more than a half share of radio listening – 50.1 per cent. This figure has been reached after a period of steady and sustained growth. Two years ago the figure was 38.9 per cent; last year’s second-quarter figure was 47.4 per cent and the first quarter in 1995 was 48.4 per cent.

In addition to share, there was also a first in terms of audience reach. Commercial radio’s weekly reach in the second quarter of 1995 hit 61 per cent – 28.5 million listeners – taking the medium over 60 per cent for the first time. The national radio stations played a key role in this, achieving a reach of 27 per cent (12.5 million listeners). The national stations added an extra 1.7 million listeners on last year – included in this, of course, is the launch of Talk Radio UK.

Success in delivering audience is, in programming terms, an end in itself. But for the sales director it has to be translated into apexes on the sales chart.

The latest figure for radio revenue (April to June 1995) showed a year-on-year increase of 25 per cent – a total of 66m. The epithet “fastest-growing medium” looks set to stick, as the Advertising Association’s long-term revenue forecasts indicate.

The key question is how to sustain and develop this growth. To move from a four per cent to a six per cent medium is more difficult than moving from two per cent to four per cent.

The potential for revenue growth would appear to lie in a mix of two broad options: one – increasing the airtime spend of existing radio advertisers and two – finding new revenue streams. The second element of the mix can be divided into two. First, encouraging new advertisers into the medium and second, finding new ways for people to spend their money – such as on sponsorship and promotions.

The first option of getting advertisers to spend more will never satisfy revenue growth needs, particularly given the increase in the number of people wanting a slice of the cake.

The second element of the mix is being addressed with vigour, as promotions and business development units become established on the radio landscape.

National stations, particularly Classic FM, have played an invaluable role in establishing the credibility of the medium with new advertisers and communications packages. A key element of their success has been selling a brand, not a cost per thousand.

The sales houses are working to catch up. Media Sales & Marketing, for example, has conducted “Message Received” research into the attitudes of listeners to sponsorship and promotions. The positive tone of the results indicate real potential for further development in this area.

However, it could be argued that buying into promotions is paying for a premium product (with premium prices) and advertisers need the ballast of standard airtime too. The sales houses still have some work to do – in terms of product knowledge and comparative selling – if success is to be maintained.

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