Ashford Local Radio - Ofcom Licensing

7. Local Advertising Revenue
ALR is the only group that has experience of running an on going Ashford only radio station. In 1989 Richard Sturt and
Nigel Reeve set up Radio Ashford from studios in central Ashford.The station broadcast for six hours a day and in 1989
generated up to £15,000 a month in advertising revenue. Using this and the current experience of Nigel Reeve, Richard
Sturt and Peter Edwards the ALR team have used the following three factors to calculate the revenue:
i. Radio Airtime Purchasing Trends
ALR already have experience of the level of revenue that the Ashford area can generate. In 1989 when involved with
Invicta Radio Nigel Reeve and Richard Sturt launched Radio Ashford from studios in the centre of Ashford using one of
Invicta Radio's opt-out transmitters.The station broadcast for six hours daily Monday to Friday.The radio station
generated £15,000 per month back in 1989 from these short broadcasts. Its average weekly advertising rate was £378
per week and just over £1,000 per month. No other group has had this level of experience in this market.
Since then the radio marketplace has changed. In 1989 85% of Invicta Radio's income came from the local advertisers.
Now the advertising rates have grown substantially and the position has reversed. Around 85% of Invicta's revenue comes
from the national market and only 15% locally and then only from the major advertisers.The ALR strategy will be to
target local advertisers where it will be possible to be on air for £250 per week.
ii.The Local Advertising Market
The total annual advertising spend in the Ashford area is just
over £7 million (Source Kent Regional Newspapers/MIP).
There are three newspapers in the area, the KM Kentish
Express, the KM Extra and Adscene plus regional radio,
posters, bus sides and local television although this covers a
much wider area. ALR has set a target of just 3.9% of this
advertising spend in year one rising to 4.62% in year two. It
is not until year five that the revenue is over the 6% level
and this is still below the radio industry’s revenue share
nationally (projected to be 6.4% in 2005. Source RAB).This
would give revenue of £278,000 in year one rising to
£381,000 in year three and £430,00 in year five.This figure
has been reached after research into comparable stations in
the same type of market.
No allowance has been made for advertising spend growth
over the next three years.
iii. Area Expansion
As already covered, Ashford is planning population growth of
2,000 adults per annum over the next 25 years.This growth
has been calculated into the advertising projections.
The key influences in our advertising projections are
therefore the radio advertising purchasing trends, the local
Ashford market and the area's expansion.
Local advertisers will be on air for as little as £120 per week with the average monthly package costing £900. However at
this stage national revenue is only being projected to cover store openings and specific area targeted campaigns.The vast
majority of the revenue will come from the local market.
www.ashfordlocalradio.com
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