Capital slowdown fuels fears over radio growth as TV demand rises

Capital Radio’s failure to meet its revenue targets is inspiring fears that the rapid advertising growth experienced by the radio industry over the past three years is flagging.

Capital has told radio buyers in agencies that it has had a very weak summer. Few of its sales staff have hit their bonus targets since April, and advance business for September and October is continuing to look weak.

Smaller London radio stations are believed to be picking up some of Capital’s business. The station is also suffering because local advertising in the capital is not as strong a revenue stream as it is for Independent Local Radio (ILR) stations across the regions.

“Capital’s bullishness in a buoyant market meant smaller budget clients had to find ways of using other radio stations,” says Denise Clarke, radio buying manager at New PHD. “Now those clients don’t need to go back.”

Capital is also suffering, according to agencies, because its listening hours have dropped by almost 20 per cent compared with last year.

“It is wild speculation,” says Duncan George, ad sales director at Capital. “We are certainly not struggling. We have had a pretty successful summer and advance bookings look good.”

Agencies believe demand in both the radio and the outdoor advertising markets has weakened because of an increased demand for TV airtime in the last quarter of the year.

Capital Radio has commissioned design agency Basten Greenhill Andrews to undertake a revamp of the station’s logos.