BBC radio growth dents commercial radio's hopes for ad revenues

by Alex Donohue, Brand Republic 02-Feb-07, 11:00

LONDON - The BBC's growing market share in the latest Rajar figures is bad news for the commercial sector's plans to increase its display advertising revenues, according to a report released by Universal McCann.

The corporation's of the UK radio market has risen to 54.4% share, and BBC Radio 2 has added over half a million listeners since the previous quarter to make it the most listened to station in the country.

Universal McCann's report said the BBC's success "would come as a blow to Andrew Harrison [chief executive of Radio Centre] who recently announced his plans to grow radio's share of display advertising from 6.1% to 7% in the next three years.

"This is a very tough target to achieve given the challenges that radio is facing. For commercial radio to develop and grow its audience, greater investment in talent and strong content is needed."

The report also highlighted the need for commercial radio to continually grow its audience ratings if it is to maintain its share of ad revenue in the future.

However, despite the perceived negativity for commercial radio in the latest Rajar figures, the media-buying agency said there was optimism in radio's ability to exploit the growth of the internet.

"One of radio's greatest strengths is that it is complimentary to the internet -- it should not suffer from the growth of internet use but rather, use this change in consumer behaviour to its advantage."

Meanwhile, competition in the commercial sector has significantly heated up with Heart FM presenter Jamie Theakston finally overtaking Capital's re-signed Johnny Vaughan to claim a 7.1% share for the most popular breakfast show.

Howard Bareham, head of radio advertising at Mindshare, said: "GCap are committed to Johnny Vaughan but only time will tell whether their marketing and strategies are working overall.

"Some might question whether they have got their music policy right or whether that needs to be looked at more closely.

"Overall it is disappointing news for GCap. It's the year-on-year figures which are the most telling, and it will be disappointed not to have either steadied or increased its audience share."