When the Radio Advertising Bureau (RAB) was launched in May 1992, the commercial radio industry was in a very different place to where it finds itself today. It had a poor image with advertisers and took just two per cent of national advertising revenue, with Classic FM being the only national commercial station.
Thirteen years on and the industry, boosted by the marketing efforts of the RAB in promoting radio as a medium, last year secured its highest share of national advertising spend to date at seven per cent, according to RAB figures. Buoyed by this feat, the RAB has set a long-term goal of a ten per cent share within the next five years and has unveiled new measures to market the medium by getting involved with programming for the first time.
The RAB is in talks with the major commercial groups, including Capital Radio Group, Chrysalis Radio, EMAP, GWR Group and Virgin, to encourage them to look at working together on more networked programming, which it believes will help boost audiences and in turn increase radio’s share of national advertising revenue (MW this week).
But the next few years might not be so rosy for radio. Radio buyers have warned that the medium’s share of national ad spend could fall back below seven per cent by the end of the year. Furthermore, the Internet Advertising Bureau has claimed that online spend was £653m in 2004, accounting for a 3.9 per cent share of the advertising market and overtaking radio, which only had a 3.8 per cent share (Advertising Association/WARC).
However, the RAB is not giving up. It disputes the IAB figures, claiming that they have been distorted by including “paid-for search” and recruitment ads, as opposed to display advertising.
But radio is changing with the explosion of digital channels and the emergence of non-traditional ways of listening to radio , such as through the internet and digital television. The more established commercial players are also looking to consolidate. Capital and GWR, owner of Classic FM, are about to merge to become the industry’s biggest player, GCap Media, taking 40 per cent of all radio advertising. And BBC Radio is going from strength to strength, eating into commercial radio’s share of listening.
Some say the pressure is now on for the RAB, long revered by marketers and other media for its effective work in marketing commercial radio, to evolve.
Rob Jones, chairman of radio content producer USP, says: “It will have to change in some sense, because what will the super groups like GCap Media need the RAB for?”
However, Chrysalis commercial director Don Thompson believes that the RAB has constantly evolved since it was set up and that it will continue to do so, despite the market being more competitive than ever. He says: “No one at the RAB is basking in the sun, the goal is still to get a ten per cent share of total advertising. We need to get audiences growing again, but the BBC has become resurgent and there has been some publicity of the internet’s share of advertising overtaking radio.”
RAB chief executive Douglas McArthur admits the challenges facing the industry are changing: “The industry needs to do something to continue to increase its share, but it also needs to protect what it has already achieved.”
The RAB believes that it can help the industry by getting involved in programming for the first time in its history and is in talks with the major commercial groups about developing more networked programming.
It is an idea that has evolved from UK Radio Aid, where all of the major radio groups suspended schedules across a number of stations on January 17 to put on a day of special programming in aid of the tsunami in south-east Asia. The co-operation that was achieved across the groups, particularly among programme directors, was an eye-opening experience for the RAB.
McArthur says: “We always stayed away from programming because it was too political, but through Radio Aid we discovered that programme directors are very competitive and that they actually enjoyed working together.”
The RAB’s plans extend further than one or two shows. They include simple programmes, such as an entertainment show and an adult contemporary music show, as well as a game show that could also be broadcast on other platforms such as TV. It also wants to encourage more advertiser-funded programming and is talking to stations about clearing their weekend schedules for a “radio event” that could bring in big sponsorship. It also hopes to develop one music download service that all of the radio groups would sign up to, instead of them launching their own individual schemes.
McArthur claims that he is close to getting all of the groups back into one commercial radio chart show, which would be quite a coup after EMAP quit the network chart in 2002 so it could set up its own Smash Hits!-branded version.
It is not known whether the recent speculation about Chris Evans being lured back to radio to host a new show across a number of networks is connected with this RAB initiative. Neither is it clear whether the RAB or the radio industry has Ofcom backing for these network programme plans.
RAB operations director Michael O’Brien admits that this emphasis on programming is a major shift for all involved, but believes that it will offer good network opportunities for national advertisers as well as helping commercial radio to mount a proper fight against the BBC. He says: “Radio Aid helped to show how commercial radio could work,people realised that we could be bigger and better.”
Yet, while the RAB is talking about developing such plans, it claims that it would only act as a catalyst rather than be directly involved. But one radio industry insider believes that as a trade organisation, the RAB should stay focused on educating advertisers about the potential of the medium.
Billy Anderson, managing director of Real Radio in Scotland, who is looking to set up a similar organisation for Scottish stations, believes that the future of radio advertising has to be about more than just carving up the existing pot. He says: “The industry has not got that far yet, seven per cent is not enough. The RAB should continue as it is, but it just needs to be bigger.”
And while McArthur is working hard on this new programming focus, he is keen to point out that the RAB will continue to help advertisers and creative agencies understand the potential of radio.
Capital commercial director Linda Smith is supportive of the RAB’s new position. She says: “It will still be there to offer an objective service to advertisers and an understanding about how radio works, but it will also challenge radio groups to do more.”
It is essential for the RAB to move with the times if it wants to increase the medium’s share of national advertising, and perhaps the programming initiatives will help to do just that.