Radio gets single-minded

agencies, but also in other media's attempts to copy the RAB's model,
albeit with varying degrees of commitment and success.

It is difficult, then, not to feel concerned that the RAB's planned
merger with the Commercial Radio Companies Association (CRCA), creating
a single industry body, will dilute its role (Marketing, 22
February).

The as-yet-unnamed organisation will represent all the interests of the
commercial radio sector. This includes lobbying Ofcom on regulatory
matters, rather than just selling the medium to advertisers and
agencies.

The reason for the merger is clear: the CRCA gives its members an equal
voice, irrespective of size. The merged body will give those radio
groups with most at stake, such as industry giants Emap and GCap, a
proportionately bigger voice than smaller companies such as Shrewsbury
FM.

The rationale is that this will enable the CRCA to achieve a united
voice more easily, while the absorption of the RAB into the organisation
is a useful cost-saving measure.

If the merger injects some vigour into a medium that has been beset by a
series of problems in recent months - some of which are of its own
making - the decision should be welcomed.

Industry turmoil

The radio industry has been under attack on a number of fronts, which
has resulted in it suffering from falls in both advertising revenue and
audience share.

First, a sustained and sluggish ad market, with revenues falling year on
year in two of the past three quarters, has thwarted the prospect of
much growth in radio's share of ad budgets.

Second, the BBC, with a generous above-inflation licence fee settlement
has been able to attract and retain on-air talent as well as expand its
station network. It now has its highest share of listening hours to date
at 55.1%, compared with 42.8% for commercial radio.

And third, the commercial radio companies have been forced to undergo
lengthy mergers to satisfy the demands of the City.

As Howard Bareham, managing partner for radio at MindShare, puts it:
'Radio has hit the buffers.'

Most ironic is the impact that the creation of rival media marketing
organisations has had on the RAB. It was no doubt flattered by the
flurry of organisations that followed in its wake, but other media's
grasp of the need to market to advertisers has led to greater
competition for the incremental ad budgets that radio once could have
assumed were its own.

The Newspaper Marketing Agency, Internet Advertising Bureau (IAB),
Outdoor Advertising Association and even Thinkbox, the putative voice of
a unified commercial TV industry, have all started to rival the RAB's
efforts.

The IAB has been the main beneficiary, with agency planners finding it
as easy to be seduced by the relatively un-tapped online arena and its
creative opportunities as they were by radio when the RAB was founded in
1992.

This has cost radio dear, according to Azon Howie, head of broadcast
trading at Carat. 'All the good work the RAB has done to make radio sexy
among planners has been negated by online advertising, which is cheaper
and relatively unexplored,' he says. 'Radio was once the medium that
planners used for tactical advertising, now it is online.'

Negative impressions

Last year's spat about audience measurement between Kelvin MacKenzie,
former chief executive of The Wireless Group, and Rajar, the radio
measurement body, did little to instil confidence in an already
beleaguered medium.

Meanwhile, the consolidation process that led to the creation of GCap,
and the acquisition of Scottish Radio Holdings by Emap, has meant that,
arguably, the companies have been distracted from their goal of
maximising listeners.

Certainly the external-facing sales teams have changed beyond
recognition, hindering radio's ability to maintain a consistent
message.

In the medium to long term, MindShare's Bareham says that rather than
lament the loss of the RAB, the wider advertising community should
welcome the fact that the industry is doing something to reverse a
lengthy period of stagnation.

So, what hope is there for radio? With the consolidation process
appearing to be complete, Bareham is optimistic that some of the
promised cost savings achieved through synergies will be reinvested in
programming.

The prospect of digital radio, which works in favour of commercial radio
stations over the BBC, could also promise much for the future.

The RAB was formed at a time when, according to the Advertising
Association, radio took a paltry 2.7% of ad budgets, compared with 6.6%
now, and the radio companies still operated on a federal structure. It
has now become obsolete.

A merger between the RAB and the CRCA, coupled with a revitalised
marketing effort, could help commercial radio overcome its woes and
stage a fightback against the BBC and the internet. If it does, it will
fuel hope that ad revenue growth can be reignited.