Ashford Local Radio - Ofcom Licensing

Method Three – Local Demand
ALR carried out focus group research between 13th-17th September 2004 amongst a group of potential local
advertisers. Clients were asked the level of advertising spend they would be prepared to spend over a four week period.
Figures of between £500 and £1,100 were proposed. Examples of the reactions are below:
“£1,100 certainly sounds pretty reasonable. On KM-FM we paid about £350 for a week of about 30 commercials.”
Chris West, Ashford Town Centre Partnership
“If I sell one car it will pay for the ads. If I don't, it’s expensive.”
Geoffrey Fletcher, Drake & Fletcher
“£500 is a lot for us – and for a lot of other businesses of our type.”
Martin Rose King, Bounty Pest Control
“Seems cheap”, before adding, “but I don’t know if the clients who use Kentish Ways have that type of money for
local radio.”
Nick Randolph
“We don’t have a big budget, but we find additional budget if the right opportunity comes along.”
Clive Gawler, Red Alert
“I’m pro-radio. It's the best medium for a campaign for us. It’s better to be heard 30 times a week than seen once in
the press, where people look at it once and then forget about it.”
Chris West, Ashford Town Centre Partnership.
Based on a maximum minutage of nine minutes per hour a calculation has been used that 55% of airtime will be sold in
year one rising to 65% in year two. After this the figure levels at 70%.This is based on 07.00-19.00 Monday to Friday and
07.00-14.00 Saturdays and Sundays. No allowance has been made for sales outside of these time bands. An additional
figure of just over 18% (Source RAB) has been added for Sponsorship and Promotions income plus an additional 5.00%
for commercial production income.
Using an average year one monthly spend of £900 per month (Between £500-£1,100) the following revenue calculation
has been used. The future year average spend has been increased in line with the projected total listening hours for each
year and radio’s projected inflation. (Source RAB).
The figure of £900 buys 140 thirty second commercials over a four week period delivering the required level of reach
and frequency for advertisers.
Year 2005 2006 2007 2008 2009
ALR Projected Total Hours-000’s 99 114.5 131.4 134.8 138.1
Year on Year Increase N/A 15.66% 14.76% 2.59% 2.45%
Radio’s Growth N/A 6.30% 6.40% 6.50% 6.60%
Monthly Spend £900.00 £1,106.52 £1,351.11 £1476.20 £1,612.18
Average Spot Rate £6.43 £7.90 £9.65 £10.52 £11.52
Units to sell per annum 69264 69264 69264 69264 69264
Percentage Sold 55% 65% 70% 70% 70%
Total Airtime Revenue £244,897.71 £355,837.86 £467,916.42 £511,237.58 £558,330.18
Plus Sponsorship/Promotions £45,036.69 £65,438.58 £86,049.83 £94,016.59 £102,676.92
Plus Commercial
Production Income
£12,244.89 £17,791.89 £23,395.82 £25,561.88 £27,916.51
Total Revenue £302,179.29 £439,068.34 £577,362.06 £630,816.05 £688,923.61
www.ashfordlocalradio.com
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