Britain's Ofcom Runs Eye Over Radio Advertising Market

20 October 2006

LONDON: In anticipation of a possible future review of the UK radio market, or a requirement to submit an opinion regarding potential mergers within the radio industry, communications regulator Ofcom has conducted a study of the nation's radio advertising market.

Since the Competition Commission last ran its stethoscope over the UK radio advertising market in April 2003, the radio business has undergone a decline in advertising revenue.

According to Ofcom, the latest research will help shape any future analysis of the effects on competition of specific developments within the radio industry.

The study, Radio Advertising Market Research, examined two distinct markets within radio advertising . . .

  • Indirect (where an advertiser uses a media buying agency to purchase advertising via a radio group's sales house).
    The research identified that price increases would be constrained as a result of media buying agencies moving budgets away from radio to other media. Television, online and press advertising present the strongest competitive constraints on the pricing of indirect radio advertising.

  • Direct (where the advertiser purchases airtime from sales teams at individual radio stations separately and directly).
    Pricing of direct radio advertising appears to be constrained by press advertising; advertisers generally view spending on press advertising to be interchangeable with spending on radio advertising.
To view the full Ofcom research document, click here.

Data sourced from Ofcom (UK); additional content by WARC staff