The world in which we live is a fast paced ever-evolving place. So too is the world of media. From the paper we read in the morning, to the television that we watch in the peace and quiet of our homes – there is constant evolution in order to adapt to audiences moods, which media owners are always eager to reflect. This evolution is more than apparent within the radio industry - constantly changing and evolving so that the landscape is different to that of even 12 months ago. Case in point is the formation of Ofcom – the official body that was set up to replace the now defunct Radio Authority and oversee all things radio related (along with TV and other communications areas.) In the past 9 months alone Ofcom has given out 9 FM licences, and many radio groups are now awaiting with baited breath for its decision on the FM licence in Southampton – due to be made early this month.
Yet, radio advertising is still in the doldrums and this part in the evolutionary process indicates that perhaps the wealth of stations available both on analogue and also digital radio is splitting the audience even further. So, what does this mean for radio sales teams throughout the country – does the wealth of new radio licences mean that ultimately the stations will be selling to an ever-decreasing market share? Undoubtedly the radio advertising market is a tough nut to crack, and with the advent of more and more radio stations encroaching on the market surely it means that times will get even tougher for the remaining sales teams in the country?
Simon Forster is creative services manager for the Midlands at Chrysalis Radio. He believes that in order to for radio stations to win the battle and succeed financially, the quality of adverts must be of a high standard. He comments: “As start up costs become cheaper for smaller radio stations, it does mean that we are seeing an increasing amount of start ups in the industry. They can offer creative cheaper, but it does not mean that what they are doing is better. In fact most of the time the creative is simply not very good.
“And, while I think that some very small advertisers will benefit from that type of work, I think it can have a negative effect on the industry resulting in a significant drop when it comes to the actual creativity that you are hearing on the radio.
“From Heart’s point of view in the West Midlands that type of advertising is not really an issue because we have a price that certain advertisers must pay and do not drop below that.”
As the latest RAJAR results are released, it would appear that more and more people are turning away from radio. So how do you keep them onside? Sandra Tinker, commercial director of Key 103 in Manchester comments: “Emap has really preached the creative led sell since we started and it has always been high on the agency in terms of the sales team selling to the client. However, I would say the radio advertising industry has been affected over the past few months. But that doesn’t mean that things won’t get better. I think you have to look at the wider picture and really look at what the whole of the advertising market is doing before you make any kind of statement. For example if TV advertising is getting cheaper then naturally clients are going to chose to spend their budget their. But in time rates in TV will change and clients will look at other options.”
Julian Carter, group director of sales for GMG Radio agrees that the selling side has become harder, however that simply means that the sell must become far more creative. “Yes it is difficult for everyone out there, and times are getting tougher. But at the same time it means that people have to become more creative and actually think about the product they are selling to their audience. Rates with agencies haven’t changed really over the past five years so it means that we need to be more creative in how we sell. I do think that sometimes clients aren’t as aware of the opportunities that are available to them through radio advertising, however it means that we need to be able to show them radio opportunities. I think online advertising will become a huge thing in the future, so if radio sales teams and clients can tap into this then it means that clients will get far more coverage.”
Regional sales director for the North and Scotland at GCap Radio in Manchester Dominic Barker also believes that a lot of the time radio advertising is simply not high enough on the clients’ agenda, which in turn can affect the quality of the advertising. He comments: “We have a creative department at all of our sites and we use them across the board both with agency and direct sales teams. It is a service that we offer to all of our clients, at an extra cost of course, and it is something that many of them take up.
“What we find increasingly these days is that when clients are arranging a new campaign they always put their radio marketing plans at the bottom of the list and that is when we can help.
“But at the same time we will always run an ad regardless of whether we think we could have done it better because the client obviously feels that the campaign will attract a response and we are not going to argue with them.”
Forster agrees that advertising has a direct link on audience reaction and is therefore conscious that the adverts have to sound as good as possible. He comments: “Generally we are very flexible to the client on a radio advert. Some stations will only run a 30 second ad for a client, however we recognise that for a local advertiser that to get all the details in such as a phone number and address and other contact details that it can take longer than that. We therefore are more than willing to take the running time up to 60 or even 90 seconds as we want to make the advert as good as possible and not try to cram things in that will make it sound rushed
“The ratio of locally produced adverts to national is probably 40/60 per cent. At the same time we are used by national advertisers who perhaps don’t event run ads on our station as we are there preferred supplier which is a nice position to be in, Laura Ashley is one such client who had traditionally gone to Classic FM with their ads even though we had produced them – however now they are sticking with us”
Relative newcomers SAGA Radio had a good turn out at RAJAR this year and, as managing director of the Birmingham station, Ron Coles, claims the station is still experiencing a great deal of growth. He comments: “I suppose our point of view will be different to other media owners just because we are still relative newcomers in the market. So, bearing that in mind it means that we are still experiencing an element of growth within the station that perhaps other groups are not. The fact that we are targeting a market that hadn’t really been targeted in this area by local radio also means that we will be experiencing a certain level of growth.”
Coles is more than aware that the advertising appearing on the station must be relevant and also appropriate for his audience: “Getting the right tone of advertising is a huge challenge for us as we are more than aware that the market that we cater to will be receptive to it. We have done research that shows if the tone isn’t right then we know that they will switch off straight away, and our creative department understand instinctively. It is important that we are relevant and sound good so the audience will respond positively. The creative department are also part of sales pitches, as they understand what the station needs to sound like and can help the client at times. There have even been times when agencies supply an ad and we know that it simply is not suitable for the station and have produced a new ad.”
The much-debated Manchester radio licence saw Gcap owned XFM scooping the coveted licence – so what will that mean for the city as a whole? Tinker maintains that while it will have some effect – the positives will hopefully outweigh the negatives. She comments: “Ofcom awarding the licence will divide the pot that we are all working from but at the same time I hope that it will develop the industry as a whole and rejuvenate sales teams ability and the market as a whole in Manchester. Am I worried about them at the moment? Not really as I know that the station hasn’t even gone on air yet, and as we found when we set up Kerrang in the Midlands, media agencies and clients are always a bit sceptical about spending money with stations until they have a couple of RAJAR figures under their belt. So, I am sure it will have an effect – but if I look at it rationally I know that nationally the sales teams will look to sell on the basis that their listenership is young and male which is a different national sell to ours.”
Carter agrees, yet points out that by more and more Ofcom licences being awarded the pot is indeed growing smaller. He comments: ”It does get harder that is safe to say. But at the same time I suppose it does give the smaller groups, of which GMG is part of, a chance to grow and compete against the two largest media groups – Emap and Gcap. It means that we can grow the business and make it stronger. But at the same time it does need to be the right licence for us – we aren’t going to throw our hat in the ring for any licence just as a means of bulking up GMG’s offering. We always take a lot of time deciding whether it is the right thing for our growth, and if it isn’t then we won’t apply. The Manchester licence is a case in point. However, in order for us to survive and grow we are always aware that we need to build on what we have and I think we are doing that successfully at the moment.”
It would seem that the radio industry is one that is gradually changing – the landscape being different to that of 12 months ago. How will it be next year? Only time will tell.