1.
NEWS: UK COMMERCIAL RADIO
ANGRY OVER CLAIM THAT 2004
INTERNET REVENUES
EXCEEDED RADIO SECTOR'S
by
GRANT GODDARD
www.grantgoddard.co.uk
May 2005

2.
News: UK Commercial Radio Angry Over Claim That 2004 Internet Revenues Exceeded Radio Sector's Page 2
©2005 Grant Goddard
A truce has been called between the radio and internet industries, following a
war of words over recently released data that showed internet advertising
revenues to have overtaken radio advertising revenues. The Interactive
Advertising Bureau [IAB] and Price Waterhouse Coopers had released figures
that showed online advertising to have grown to £653m, 3.9% of total UK
advertising spend during 2004, eclipsing radio’s share of 3.8%. The statistics
revealed a 60% year-on-year increase in online advertising and a four-fold
increase since 2000. "There's a massive cultural shift going on forcing a
change in consumer and advertiser behaviour," said IAB chief executive Guy
Phillipson. Press reports trumpeted the news with headlines such as “Online
ad spend trumps airwaves” [BBC].
The Radio Advertising Bureau [RAB] reacted angrily to the report, saying that
the figures were “not a true and fair reflection of the internet's scale as an ad
medium.” RAB operations director Michael O'Brien said the IAB figures were
distorted by the inclusion of 'paid-for-search' and recruitment ads: "While these
revenues are clearly income to internet businesses, we don't feel they should
necessarily be considered display advertising."
A few days later, the IAB’s Phillipson waved the white flag by calling for
collaboration between the two media. "There is good evidence that radio and
online are complementary media," he said. "You can do lots of things while you
listen to the radio and one of them is to go online." He added that he hoped the
two bureaux would not be sidetracked into a row: "I don't think marketing
directors pre-occupy themselves too much with which medium gets what sort
of ad revenue." Ironically, the IAB chairman is Richard Eyre, former Capital
Radio chief executive.
 New figures published by the Advertising Association showed commercial
radio taking 6.8% of the display advertising market in 2004, up from 6.7%
the previous year. The RAB’s Michael O’Brien commented: "2004 was a
very challenging market so we are pleased to see commercial radio
continuing to grow share across the twelve-month period."
[First published in 'The Radio Magazine' as 'Ceasefire Between Radio And Internet', #682, 4 May 2005]
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk