The key difference between national and local stations is local radio's impressively high reach. Put simply, listener loyalty to local stations is greater than to national ones. "Average listening hours to local stations are generally higher, so if an advertiser wants to reach the masses they have to use both local and regional radio," explains Julian Carter, GMG Radio group director of sales.
Andy McPherson is programming director of Xfm and for the North, Welsh and Scottish regions at GCap, which has the largest number of local stations - 55 in all. While Xfm doesn't have a national competitor as such, McPherson says GCap's other local stations face stiff competition for listeners. "It's always been important to be local, but it's not enough just to do that. Listeners are used to hearing slick output and local radio must sound professional," he says.
GCap's local stations still cover entertainment and lifestyle stories because listeners are interested in entertainment and lifestyle news wherever they live. Moving forward, the plan at GCap is to mix this content with the local programming to make its radio stations "compelling". McPherson adds: "It's about putting together the national and local in such a way that doesn't sound odd."
Local radio stations engage listeners by putting them at the heart of a community that the station helps create. Andy Price, brand manager for Kerrang! 105.2 in the West Midlands, describes his station as "a regional station with a national outlook"; it is part of the wider Kerrang! portfolio including the magazine and TV channel.
Kerrang! also has a strong community presence through the Birmingham gigs it stages for competition winners under the Kerrang! Live and Kerrang! Raw banners. Price says: "It is important to connect with the local marketplace and the gigs have cemented Kerrang!'s reputation as the station for credible music. When we do live gigs we see a positive impact on the Rajar figures."
Don Thomson, commercial and operations director at Chrysalis Radio, the third-largest regional radio group, cites endless examples of how local stations have engaged with listeners, often with incredible response rates. For example, in Birmingham, Chrysalis's Heart FM partnered with local tourist attraction Warwick Castle to advertise the castle's new attraction, Knight Talk.
Thomson says: "Warwick Castle was concerned about using radio because they wanted to be able to visually demonstrate the attraction. So we sent our breakfast presenter down there and put together a vodcast that we made available on our website and promoted on-air." Warwick Castle was so happy with the results - 1,000 video downloads - that it is now using Heart to promote its next new attraction.
Thomson contends: "The listener relationship with radio is like no other. There's a far greater degree of loyalty than there is to virtually any other media. That loyalty is difficult to break and is incredibly valuable to an advertiser."
Stations are constantly looking to maintain that loyalty. For example, Radio City DJ Kev Seed broadcast his breakfast show live from Athens as part of the build-up to this year's Champions League football final. Meanwhile, GMG staged a car giveaway on Real Radio in Scotland throughout May in partnership with The Scottish Sun and Scotland's national car dealer Arnold Park. "This is one of the best examples of where we've taken our brand and reached so many people," says GMG's Carter.
As the GMG deal and Heart's relationship with Warwick Castle show, local stations must work closely with their advertisers. According to Neil Webster, managing director of First Radio Sales, the sales arm of The Local Radio Company, local radio depends on local ad revenue and can only expect a degree of national ad budgets.
Maximum impact
However, First Radio Sales's sponsorship and promotions manager Nathan Bennett points to retailer M&S as one national advertiser that regularly uses local radio, particularly to promote its new stores. "M&S uses a mix of local media to drive footfall into its stores for opening day," he explains. "The local radio station will pre-promote this on air for a week leading up to the opening and then a presenter and promotional crew will be in-store for a few hours."
Bennett adds: "First Radio Sales and our portfolio of 132 local radio stations is ideal for a national client such as M&S as they get hardly any wastage on their local campaign, while benefiting from maximum impact within their local marketplace."
Richard Wheatley, chief executive of The Local Radio Company, agrees that local radio's reach is key to its success. "Our main competition is the BBC, therefore as a commercial station we have huge listening shares in the market. On the qualitative side, people are slightly possessive of their own local station," he says, explaining that listeners call the High Wycombe office of The Local Radio Company to complain that a restaurant advertised on the station was disappointing and "we ought to know".
Wheatley is bullish about business - 90% of his company's revenue comes from local advertising and the business is growing year on year - and he does not see the internet as a rival for ad revenue. "We're not losing business to the internet. Local radio works hand in glove with the internet; often we're on joint schedules," he says.
The development of radio sites online is pioneering new forms of partnerships with advertisers.
Wheatley adds: "Many local advertisers don't have their own websites so we use advertising on the station to create awareness and create a mini-site on our station website." A local station's brand is such that, for instance, Manx Radio's website gets more internet traffic than the Isle of Man tourist office.
Dominic Barker, regional sales director for GCap, is also confident about business. He says: "Commercial radio is going from strength to strength as digital stations gain popularity and you can listen to radio on so many different platforms." However, Barker admits local radio isn't always an easy sell to advertisers. He adds: "The surge in online advertising means that we do have to fight for every pound and it's about identifying what part radio can play in a client's media plan."
Barker welcomes the imminent relaxation of regulation as part of an ongoing consultation by Ofcom on the future of radio. "We have big battles with the BBC over listening figures and, to a great extent, that's where we want to take our audience from," he says. "We need to be able to compete with the BBC on a level playing field and relaxing the regulations will help."
Ofcom has proposed simplifying prescribed formats for local stations and cutting obligations for local content to as little as four hours a day for the smallest stations. But the RadioCentre believes Ofcom hasn't gone far enough. The industry body's chief executive Andrew Harrison says: "It shouldn't be up to the regulator to prescribe how many hours a day there are of local content or where it's produced from. It should be up to the radio stations to decide how best to serve their local listeners."
Harrison hopes to make a convincing case for further relaxation before Ofcom finalises its proposals in the autumn.
Meanwhile, in line with the groups he represents, he is optimistic about the digital future. As he says: "There are more and more opportunities for local stations to connect with their listeners and that has to be a good thing."