Why a united GWR and Capital will broaden advertiser horizons

When GWR and Capital merge, a 36 per cent listener share and the promise of network-wide campaigns should outweigh fears of rate hikes. By Richard Jacobs

Finally GWR and Capital Radio Group have confirmed their merger. The combined company will have a turnover of &£243m; a 38 per cent share of the commercial radio market; own one national radio station (Classic FM), 55 local analogue services, 93 digital stations; and reach 18 million listeners – or 36 per cent of the UK commercial radio audience.

The deal gives Capital access to national station Classic FM, one of the strongest brands in radio, and gives GWR the keys to London’s biggest station.

If you add GWR’s Classic Gold and Capital’s Gold network (including a bit of digital) you get a weekly reach of about 2.5 million adults. This means that morning advertising on the Gold stations will have a reach bigger than TalkSport and almost the same as Total Virgin Radio. With the possible exception of Century in the Midlands, GWR and Capital offer advertisers a major access route to consumers across the country, with virtually no major causes of concern for the regulators in terms of competition or monopolising radio in one area.

The group could offer networked programming across all its stations so that advertisers could buy one targeted environment or audience profile from one point of contact. The same is true of sponsorships and promotions. A huge interactive promotion or sponsorship with the same brand values and quality of production and reaching nearly 40 per cent of the UK population would be possible.

None of this has to affect the “localness” of the stations because having a brand guardian over the whole network would simply ensure that the same idea and values were working across the group. It would make radio appear much bigger and less fragmented than it currently does to advertisers.

There has to be a downside though. There is the fear that the formation of very large media groups will allow some strong-arm tactics and essentially rate increases, which would affect positions in the market. But it must be remembered that agency land has been consolidating for some time and our combined trading powers should balance out any potential threat of this kind.

Both companies are very different in structure and culture and will need to think very carefully about how they merge. GWR’s Duncan George will take the helm as national sales director, while the companies have announced that about 150 jobs are likely to go across the group.

One month’s cooling-off follows, after which Ofcom considers the merger, which could take up to nine months. Opinions are mixed as to whether it will be referred to the Competition Commission, but it’s likely that some stations will have to go in the East Midlands.

If it gets stuck in the commission for too long and the two companies have to sell bits before moving ahead, it could leave 40 per cent of the radio industry in limbo, demoralised and unsure of their future. Let’s hope for the sake of the industry and the staff involved that decisions are made swiftly and intelligently.

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