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GCap Media will not have enjoyed listening to the latest set of Rajar results, which saw Capital Radio fall to third place in London, measured by share of audience, behind bitter rivals Magic and Heart.

The blow comes almost six months after Capital took the bold move to cut the amount of advertising on the station almost in half.

While any impact has clearly not yet worked in its battle for supremacy in London, Capital is hoping that research into the effectiveness of the strategy, which it admits is likely to leave a £7m hole in advertising revenues this year, will be more impressive.

The research claims that advertising recall on its two-spot ad breaks has already increased by at least a third.

Interesting step

Agencies have welcomed the research, with Steve Parker, UK buying director at Starcom, calling it "significant for Capital and an interesting first step for agencies".

Howard Bareham, head of radio at MindShare, adds: "Common sense suggests you get a higher recall and that this policy improves the effectiveness of ads."

However, Paul Richards, a media analyst at Numis, says it's not just the research that Capital needs to look at. "It's encouraging early progress in terms of recall, but this needs to be coupled with an increase in audience to make the numbers work."

And while listener recall has increased, Capital's listening figures have not. The new ad strategy cannot work without a compelling reason to listen and GCap has said it will not put any money into marketing the station until it is entirely happy with the output.

Mark Middlemas, managing partner at Universal McCann, says Capital's content needs to be looked at, but defends GCap's decision to change ad strategy first. "It might have been done the wrong way around, but if you are going to take a financial hit you need to take it earlier rather than later."

GCap's operations director, Steve Orchard, says: "The priority is to raise day-to-day levels of execution." This is where Scott Muller, Capital's new programme director, comes in. Muller joins in late summer to revitalise the station's content and find it an identity, but GCap is not giving Muller a timetable to work to.

"We can't say how long it will take, it's a long-term strategy," says Orchard. A mooted move to a younger target audience may be discounted. "We've seen the most growth in the 25 to 44-year-old age group," adds Orchard.

Consistent performances

Numis' Richards says: "It may take until the end of the year to get it right and perform consistently over a few Rajar quarters. It was never going to be a quick fix."

Meanwhile, other radio owners are waiting to see how Capital's fortunes fair and haven't ruled out a reduction in advertising themselves.

Karen Stacey, broadcast sales director at Emap Advertising, says: "You need to decide what is right for your audience. The ads are only one measure."

Capital will not be increasing prices now, but will be able to demand more money if audiences go up. Orchard says the station wants to give advertisers value for money and the market will determine the right rate for Capital. "Agencies won't pay if it is unacceptable. We will work with the market to create a balance," he says.

CAPITAL RADIO SURVEY

- GCap Media's reduction of advertising spots on Capital is raising advertising recall from listeners by a third, according to the survey carried out by research company Ipsos-RSL on behalf of GCap

- The findings suggest audience recall is 33% higher for a two-spot advertising break without Capital Radio branded bumpers, than it is for five promotional spots with bumpers

- Those carrying Capital branded bumpers at the beginning and end of each advertising break scored even higher in the survey, recording a 38% rise in recall

- The research tests the two-spot ad breaks that were introduced during the rebranding of Capital 95.8FM to Capital Radio in January

- The tests were conducted with a sample audience of 664 Londoners, who were asked to perform domestic, motoring or business "distraction tasks", to divert their attention from the radio advertising they were supposed to be listening to. The tests were carried out using generic advertising that was also playing on rival radio networks

- The research is being presented to media agencies over the next few weeks.