MEDIA MARKETING:IN THE big reshuffle of radio assets earlier this year, Today FM ended up in the lap of Denis O'Brien's Communicorp and FM104 in Dublin was subsumed by UTV. These deals have given both media combines more market share, but is this good or bad for advertisers?
Recently, UTV took the first step to maximise its FM104 investment by transferring the advertising sales function to the UTV media sales house, Broadcast Media Sales (BMS). BMS also sells airtime for the other radio stations owned by UTV: Q102 in Dublin, Cork's 96FM/C103, Live 95FM in Limerick, LMFM in Louth and U105 in Belfast. BMS also represents Beat 102 in Waterford and Galway Bay FM.
According to Margaret Nelson, recently appointed managing director of FM104: "We are pushing ourselves up the food chain in case there is a downturn in the advertising market."
The usual strategy is for advertisers to buy a package of airtime on a national radio station and upweight coverage in big cities or towns as required. UTV is trying to convince advertisers that even though it doesn't own a national station, the seven radio stations it does own can serve as an alternative national urban package.
UTV is not alone in grouping together radio stations for its sales effort. Advertisers can buy a package across most of the independent radio stations around the country through Independent Radio Sales, though these stations don't reach the big cities.
Communicorp has the same sales team representing its two Dublin stations, 98FM and Spin. The group's two national stations, Today FM and Newstalk, share the same building, although for now each station sells separately. Communicorp executive Eamon Fitzpatrick says: "For now, ads on Today FM and Newstalk are sold separately. But we are not ruling anything in or out in the future."
Media buyer Paul Moran of Mediaworks says the group sales effort offers advertising agencies the potential to negotiate across a range of stations.
This can benefit advertisers, if the agencies are smart in the negotiation strategy. "If you isolate the urban national listener, BMS can be more competitive than RTÉ," he said.
Gavan Byrne, managing director of advertising agency Vizeum, notes that Galway Bay wasn't getting onto schedules that were upweighting national campaigns. "When agencies call to get Cork on the schedule, the BMS sales rep now has the opportunity to push for Galway Bay's inclusion too. Under the IRS umbrella, the station missed out on this opportunity as planners don't need to go near IRS for an urban upweight to a national campaign."
Eimear Duggan, a buyer with Mediaedge CIA, said the combination packages now available mean advertisers have a viable alternative to the national reach of RTÉs stations. "Media buyers are definitely looking at the alternatives to 2FM and Today FM. RTÉ keeps increasing its rate card by around 4 per cent each year and won't discount. Adding FM104 to its offering is fantastic for BMS."
According to Dave Harland, chief executive of ad agency OMD: "The joy for advertisers and advertising agencies is that it's now a buyer's market and we can start to dictate terms and develop our own value. Can I ring up Communicorp and BMS and do deals across their radio stations? Absolutely. What I love is that there are fewer points of contact to deal with.
"The consolidation of skills is the big advantage for the stations too, because there are not enough good sales people with communication strategy knowledge."
The radio sector is coming off a very strong run and stations haven't had to be too aggressive to attract revenues.
As marketing budgets are reined in, Vizeum's Gavan Byrne predicts a more collaborative approach among the major players, not a price war.
He said: "I would expect a lot more communication between this smaller number of players to try to push the merits of radio.
"If radio can increase its share of total ad spend by one percentage point, that would increase the sector's revenues by 10 per cent. That's an easier win than going head to head with each other."
