FM104's €52m price shows advertisers are tuned into radio

Media & Marketing/Siobhán O'Connell:UTV Media's purchase of Dublin radio station FM104 for €52 million means that the station has almost doubled in value in just four years.

In 2003, the original shareholders of FM104, Ulick McEvaddy, Dermot Hanrahan and accountants Greg Sparks and Pearse Farrell, sold the station to Scottish Radio Holdings (SRH) for €30 million. Two years later, it was a case of pass the parcel when SRH sold the station to UK media group Emap.

Now it's the turn of UTV to take control. The purchase boosts UTV's broadcast stable in Ireland, which includes radio stations in Cork, Limerick, Drogheda and Belfast, as well as Q102 in Dublin.

UTV is paying 17 times FM104's pretax profits, highlighting the premium that radio assets can attract. The deal, which is subject to regulatory approval, will further concentrate ownership of radio stations in Dublin among three groups. Between FM104 and Q102, UTV Media will now have a 32 per cent audience share of the 15-34 demographic.

Denis O'Brien's Communicorp will now have a 48 per cent market share of the same audience through Today FM, Newstalk, 98FM and Spin 103.8.

Bringing up the rear in the capital are the three radio stations owned by RTÉ, which between them have a 17 per cent market share of the 15- to 34-year-old audience.

This concentration will inevitably lead to higher costs for advertisers, who have been piling into radio in recent years. According to Precision Media, ad spend on radio was up 17 per cent for the nine months January to September 2007, compared with the same period in 2006. Media auditing company Billetts is predicting revenue growth for the sector of 8 per cent for 2008.

FM104's scope for growth in market share would appear to be limited. In the 15-24 age group in Dublin, Spin now has 27 per cent market share, compared with FM104's 29 per cent.

And Denis O'Brien, who is parting with €148 million to purchase Today FM and Highland Radio, will likely prioritise boosting Today FM's profile in Dublin. Today has 25 per cent market share nationally and 18 per cent in Cork, but only 11 per cent in the capital.

Selling hot property

In a slow property market, what are the best marketing tactics to sell new homes? A couple of weeks ago, Capel Construction dropped the prices of apartments at The Crescent, Ashtown, Co Dublin, by between €70,000 and €100,000.

At the same time, Durkan New Homes took a different approach by adding value with interior design and finish to six houses the company was selling in Citywest. Instead of dropping the price, they increased the prices slightly to cover the extra costs.

Some 100 people came to see the houses and the six houses sold in one weekend.

In this challenging property environment, marketing is becoming important again. Buyers are more cautious and they are not queuing through the night to put down their deposits. Says Anna Durkan, sales manager, Durkan New Homes: "In terms of marketing, we need to think outside the box. We have to be inventive with ad campaigns and try and capture our target audience's attention in a novel way.

"Local papers, bus shelters, mobile ads, video brochures and mail drops are all things we have either researched or carried out. While well-constructed marketing campaigns are a must, a well-finished house at the right price is key," she added.

Design agency Idea creates marketing plans for many property developers including Durkan, Michael McNamara, Elliotts, Bennetts and Larionovo Overseas Properties. Managing director Ciarán Flanagan said: "How much the developer spends on the marketing campaign can vary from €50,000 to €350,000. I think developers will have to spend 10 - 20 per cent more on marketing than they have been used to spending."

The latest figures from the Institute of Advertising Practitioners show a rate card spend of €126 million on property advertising from January to October 2007, compared with €123 million in the same period in 2006. However, there was a significant decline in property-related advertising in September and October.

Sometimes, it's the simple things that count in marketing of new homes. Flanagan cites the example of the Oaks in Lucan, Co Dublin, a scheme developed by Ballymore Properties in the 1990s. When phase two of the development was launched, Idea and Ballymore changed the name to Huntington Glen and phase two of the scheme fetched higher prices.

Different media will be utilised more in 2008 to advertise new developments, with outdoor and transport advertising likely to be exploited more, according to Flanagan.

E-mail: siobhan@businessplus.ie