Mathew Horsman on radio advertising's boom

Those of us wedded to the Today programme on Radio 4, or likely to tune in to Radio 1 for the best in contemporary music, might assume that the venerable BBC still dominates the radio waves in the UK.

Not so.

Commercial radio, the country's fastest-growing advertising medium, overtook the BBC in terms of audience share early in 1995. It now accounts for more than 50 per cent of total listenership. But perhaps you already knew that. Readers of the Independent and the Independent on Sunday are more likely than readers of any other national quality newspaper to listen to commercial radio.

The medium's growth has been impressive by any measure. Since the latest round of liberalisation, starting in 1992, the commercial sector has seen advertising revenues gallop ahead, from pounds 141m that year to pounds 270m in 1995. In the past three years, the annual increase has been at least 23 per cent - far outstripping the advances in other media sectors such as newspapers and television.

It must be said, of course, that the two leading media generate far more money in nominal terms. Newspapers take in pounds 1bn in advertising revenues in a good year, while commercial television, including ITV, Channel 4 and cable and satellite, account for bit more than pounds 1.6bn.

Still, the attractiveness of radio as a medium has become increasingly obvious. Next to television, it is cheap. Moreover, surveys suggest radio creates an intimacy between listener and programme that is far deeper than the associations we have with the televised image. That means listeners tend to recall the messages they hear on radio - or at least are predisposed to pay attention.

Paradoxically, people like radio because they can carry on with other activities - shaving, cooking, DIY in the living room, driving along the M6 - as they listen. Favourite programmes are like old friends; you get to listen in on snatches of conversations between jokey DJs, or follow the latest twist in the mad cow scare, all the while staying far from couch in front of the telly.

Even better from the point of view of advertisers, commercial radio can now allow companies to mount a national campaign - using various sales house networks - or to target just a slice of the West or the city of Birmingham.

The range of programme formats, from soft rock to "talk radio" to jazz to classical music, also provide some tantalising opportunities to focus on specific demographic groups: the much vaunted 25- to 44-year-old cohort, for example, or housewives. Radio may be dwarfed by TV and newspapers, but it does hold its own during certain times of the day. Indeed, despite the introduction of breakfast television, radio still dominates media consumption first thing in the morning, and carries half of all ads until well into the afternoon.

The advertisers' love affair with local radio is a relatively new phenomenon. The recent explosion probably has two root causes: deregulation and aggressive marketing. The 1990 Broadcasting Act gave us more radio licences and even greater format choice. Meanwhile, the Radio Advertising Bureau mounted a campaign to sell the concept of radio to the advertising profession and companies.

RAB has had some notable successes since it was set up in 1992. For a start, it is funded by a voluntary levy on national advertising revenue but has managed to sign up every station. It has produced handbooks and guides for the industry, and sponsored research into attitudes among advertisers and listeners, helping the sales force to focus their efforts with greater clarity. In just three years, RAB has found that media planners' views on radio have shifted remarkably, with the medium's erstwhile negative image - too small, too unfocused, not worth the effort - turned around.

The success can be measured in pounds and pence, too. Last year's 23 per cent overall increase in advertising spend on radio masks some astonishing rises sector by sector. For instance, financial services companies doubled their spending on radio between 1994 and 1995, while the outlay by sport companies went up by a factor of two and a half.

Big companies have discovered radio, too. The top advertiser last year was McDonald's, followed by Kimberley-Clark, the consumer products company, and Camelot, operator of the National Lottery. The nominal amounts are still small, of course. Last year's total of pounds 270m was spread across 150 different radio stations. And the growth looks likely to moderate this year, to a still respectable 15 per cent.

All the same, commercial radio has been an undoubted success story. So who is making the money? The leading radio companies - Capital, Emap, GWR, Virgin - are best placed to earn profits for their shareholders. Once the basic costs are met, advertising revenues are just so much fillip to the profit line, making radio a very decent business to be in.

Not surprisingly, the attractions are not lost on big media companies eager to diversify into new sectors. And with the Government preparing further liberalisation of media cross-ownership rules, consolidation of the commercial radio sector is a virtual certainty. Media analysts expect that national newspaper publishers will lead the charge, snapping up radio licences when they are free to do so.

The natural candidates for expansion into radio - local newspaper groups - won't have a free hand, however. The Government is still minded to restrict regional publishers, lest there be far too much local concentration of media ownership. With these kind of growth rates, and with the prospect for even greater advertiser interest in the medium, the "old" technology of commercial radio must be counted among the most attractive sectors in the media business - even next to new-age cable, satellite and the ever-present, much-hyped Internet.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Guru Careers: Graduate Print Producer / Account Executive

£18 - 25k + Benefits: Guru Careers: A Graduate Print Producer / Account Execut...

Ashdown Group: Graduate Digital Marketing Assistant - Wimbledon

£18000 - £19000 per annum + Benefits: Ashdown Group: Graduate Digital Marketin...

Guru Careers: Financial Controller

£45 - £55k DOE: Guru Careers: A Financial Controller is required to join a suc...

Guru Careers: Product Manager / Product Marketing Manager / Product Owner

COMPETITIVE: Guru Careers: A Product Manager / Product Owner is required to jo...

Day In a Page

A Very British Coup, part two: New novel in pipeline as Jeremy Corbyn's rise inspires sequel

A Very British Coup, part two

New novel in pipeline as Jeremy Corbyn's rise inspires sequel
Philae lander data show comets could have brought 'building blocks of life' to Earth

Philae lander data show comets could have brought 'building blocks of life' to Earth

Icy dust layer holds organic compounds similar to those found in living organisms
What turns someone into a conspiracy theorist? Study to look at why some are more 'receptive' to such theories

What turns someone into a conspiracy theorist?

Study to look at why some are more 'receptive' to such theories
Chinese web dissenters using coded language to dodge censorship filters and vent frustration at government

Are you a 50-center?

Decoding the Chinese web dissenters
The Beatles film Help, released 50 years ago, signalled the birth of the 'metrosexual' man

Help signalled birth of 'metrosexual' man

The Beatles' moptop haircuts and dandified fashion introduced a new style for the modern Englishman, says Martin King
Hollywood's new diet: Has LA stolen New York's crown as the ultimate foodie trend-setter?

Hollywood's new diet trends

Has LA stolen New York's crown as the ultimate foodie trend-setter?
6 best recipe files

6 best recipe files

Get organised like a Bake Off champion and put all your show-stopping recipes in one place
Ashes 2015: Steven Finn goes from being unselectable to simply unplayable

Finn goes from being unselectable to simply unplayable

Middlesex bowler claims Ashes hat-trick of Clarke, Voges and Marsh
Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Atwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

Simulator recreates thrill of F1 circuit

Rory Buckeridge gets behind the wheel and explains how it works