Virgin prepares to take the initiative

Virgin Radio has been going through a tough period, changing ownership and losing audience share. Sonoo Singh investigates its recovery strategy

Just a year after Virgin Radio’s parent company, Ginger Media Group, was sold to Scottish Media Group (SMG), the radio station is planning a comeback to reverse falling listening figures.

Instead of competing with Radio 1 for a share of the elusive youth audience, industry insiders believe Virgin Radio will pitch itself against Radio 2 in an attempt to woo back its core 30to 40-year-old listeners.

According to the latest Rajar figures, the total number of listeners tuning in to Virgin each week (reach) in the three months to December fell nearly seven per cent to 3.4 million listeners, and the number of listening hours fell eight per cent.

While Virgin’s FM station posted a 0.6 per cent increase in its listening share, its national AM network’s share fell from 2.2 per cent to 1.7 per cent.

The group recently appointed advertising agency Mustoe Merriman Herring Levy (MMHL), the agency responsible for rebranding Capital, to handle its creative account (MW February 22).

The appointment follows the “revised music policy” announcement made by SMG chief executive John Pearson earlier this year. The station intends to focus on its core listeners with a repertoire of contemporary classic bands rather than number one chart-toppers.

Industry insiders agree that Virgin Radio needs to re-establish itself as a brand, and that the proposed change in programming policy is the right tactic to woo back listeners.

Howard Bareham, head of radio at MindShare, says: “Virgin’s playlist became too populist, and aimed for too wide a market. This alienated some if its core listeners – the 30to 45-year-olds, who want to listen to contemporary FM stations. I think, as a brand, Virgin Radio has become very tired because it is not offering anything different at the moment”.

OMD director of radio Jonathan Gillespie agrees that in order to re-establish the Virgin brand, the station will have to offer something novel to its listeners.

He adds: “My fear is that radio stations are tempted to commoditise themselves to increase revenue and attract the mainstream audience. If all the stations grow to be similar then they become commodities and not brands.”

An industry insider says it would make sense for Virgin to carry out a rebranding exercise, backed by a major advertising campaign, at a time when the station is rapidly losing its listeners.

Virgin Radio, however, insists the appointment of MMHL does not mean that the station is rebranding.

Virgin Radio commercial director Kathryn Jacob says: “The star has been our logo for the past eight years, and we have no intention of changing that. Mustoe understands what we are doing, and will be creating a new campaign for us, which will break in March”.

Last year, rival Capital Radio ditched the smiling sun logo for its flagship Capital FM station, in an overhaul of the station’s image (MW October 12, 2000).

The former head of marketing at Capital Radio, Vijay Solanki, now marketing director at IPC Ignite, says that Capital’s investment in new branding last year paid dividends by attracting more 15to 44-year-old listeners.

Solanki says: “The old Capital logo was very dated. The new logo appealed to new listeners without alienating the core audience.”

Radio buyers say branding has always been important for the radio industry. The reformatting of Talk Radio as TalkSport increased its weekly reach by nine per cent to just over 2 million, with a 1.4 per cent share of listeners (MW December 7 2000).

Richard Oldham, branding expert at Value Engineers, says Virgin Radio has become staid and mainstream in its music offering.

“Maybe if Chris Evans talked about Billie Piper and played her records it would attract more listeners,” he says.

He agrees that a rebranding exercise could help recapture some of Virgin’s lost listeners.

“Since I live in London I can appreciate that Capital’s new logo and media campaign, last autumn, did help to raise awareness of the station.”

But Jacob maintains Virgin Radio is not rebranding: “All we are doing is reiterating our policy. We recognise there is a place for playing chart hits, but there is also a generation which wants to listen to classic songs.”

Rather than playing music by teen favourites such as Ronan Keating or All Saints, the station will devote the bulk of its airtime to bands like The Beatles, Oasis and Toploader.

The group is also looking at moving Virgin onto a digital broadcasting platform as a result of the declining value of the AM station, which Jacob describes as “an ozone layer to which we will be committed as long as necessary”.

It already broadcasts on Digital One, the only nationwide commercial digital radio network, backed by GWR and NTL. SMG also has a ten per cent stake in Switch Digital, the regional digital radio service for London.

Bareham says: “From SMG’s point of view, Virgin has been a good buy, even though it has been losing listeners. After all, Virgin is still a national brand.”

But it remains to be seen whether Virgin Radio’s new mantra of targeting its traditional audience with “real” music will finally lure listeners to tune into its wavelength.

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