Capital to target Virgin with marketing blitz

Capital Radio is to throw a major marketing campaign behind its Xfm and Choice brands in a strategy believed to be directly targeting the listeners of SMG's Virgin Radio.

The marketing budget of Xfm, which is available on the FM frequency in London and on digital nationally, will be doubled. Choice, which plays hip-hop and R&B, will get a marketing budget for the first time.

To the surprise of some, the massive promotional spend behind the company's flagship 95.8FM station in London will be maintained, Capital announced yesterday with its annual results. Marketing of 95.8FM had been stepped up after a sharp fall in audiences over the past couple of years and the introduction this year of Johnny Vaughan as the new host for its key breakfast show.

Xfm, which plays guitar-based rock, has been growing and is seen as increasingly mainstream. Its regular DJs include Zoe Ball, while Christian O'Connell hosts its breakfast programme. In the last official audience data, it had 679,000 weekly listeners, up 7 per cent on last year. Capital said it hoped to increase this to 1 million, and is putting an extra £1.5m behind Xfm and Choice next year.

SMG's Virgin Radio continues to struggle. Available on FM in London and the less popular AM nationally, Virgin's weekly listening hours have almost halved since 1999. In the last quarter, it attracted a weekly audience of 2.6 million.

David Mansfield, the chief executive of Capital Radio, which tried and failed to acquire Virgin seven years ago, said he remained interested in buying it should it ever be put up for sale.

Capital had its best revenue performance for four years in the year ending 30 September, as sales grew 4 per cent to £119.9m. However, in the subsequent three months, sales were down 5 per cent as companies reined back expenditure on advertising consumer products.