Despite the hype attached to the Internet, radio is fast gaining the attention of Wall Street. Broker reaction to the recent spin-off of the CBS radio division, Infinity Broadcasting, is proof that radio is on the rebound. But are PRs catching on as fast?
PRs have certainly been guilty of favoring print and TV, and they are ready to admit it. However, are they missing out on a big market when radio stations are building higher profiles and reaching for a better class of interviewee?
For most outside the medium, radio is defined by two infamous names, Howard Stern and Don Imus, but the industry is working hard to change this traditionally held perception. Rene Casis of the Radio Mercury Awards concedes that radio stations are always looking to book new personalities for their shows. 'There are people who don't know that radio is a PR tool they can use.'
Eric Wright is client services manager at the North American Network (NAN), a Maryland-based PR firm that specializes exclusively in radio.
He says the medium has provided his clients with great coverage, which in some cases has had an immediate impact on market share.
NAN set up back-to-back interviews for the rapper Can-I-Bus which lifted his sales the following day. Wright says demand for entertainment guests during the sweeps was also high. He set up three to four different programs for various anchors to help them promote their shows. Consequently, entertainment is a big growth area for NAN.
Wright adds: 'The industry has changed. Stations at a local level have lost staff and people ask us to do more things. We are benefiting both clients and programmers.'
Radio is one of the most underestimated forms of media. Why? Wright believes PRs are reluctant to make the most of it because 'they find it very difficult to weigh the value of radio as, for example, you can get clips from print.'
PRs are also put off by the speed of change in radio, with high executive turnover and changes in format making it difficult to keep up with what's going on. Wright explains that NAN has benefited because it has a constant relationship with program directors.
Mergers like Chancellor Media - the country's biggest radio outfit which now incorporates Capstar and CBS' Infinity - have been responsible for many of the changes in the industry.
Media investment bank Veronis Suhler, claims that the number of mergers in 1995 was only 73, but last year it was up to 177.
Growth of the industry can also be seen in its ad revenue. Francis L'Esperance, managing director of Veronis Suhler, says that the industry has only experienced one year when advertising revenue did not grow, 1991. Radio advertising saw double digit growth in 1997 and will rise at 9.3 % over the next five years, the bank projects. It is figures like these that also have boosted interest in the sector and helped CBS' Infinity raise so much cash.
'There has been plenty of capital available to fund consolidations. This business performs well in recession and has seen steady growth,' says L'Esperance.
For example, take a look at CBS' Infinity surpassing Fox Entertainment Group's title as the third largest public offering of all time, raising $2.87 billion in the market.
Such activity is helping to change the perception of radio as a poorly resourced fragmented industry and turn it into one which brokers are happy to direct funds to.
Veronis Suhler says deregulation has also helped the industry enhance demographics and diversify appeal. That can only be good news for PRs representing corporate and celebrity clients.
NAN supplies syndicators such as Westwood One, UPI and USA Networks, but Wright says there is a lot of interest in what PRs have to offer at a national level.
Many of the newly expanded companies are looking to build their own networks to provide coverage for their station groups, reveals L'Esperance.
L'Esperance also quips that radio has the quickest strategic decision makers, given that program directors have to decide what's on next every three minutes after a song ends.
With three to four dominant groups in each city, intense competition can only work to a PR pro's advantage.