Concept For the first time, Publisuisse subsidiary MediaSense has specified how it intends to advance the Swiss Radio Pool and radio advertising. July 1, 2007 will certainly be a milestone in the 20-year history of Swiss private radio: on this day, the SRG marketer Publisuisse will become active in private radio brokerage. This entry into the declining radio advertising market means that alongside the intermediaries IP Multimedia (Goldbach Media), Radiotele (PubliGroupe), Spot Promotion and Cover Media, another player is now nibbling at the increasingly scarce radio advertising pie. And the newcomer is potent: it is already the market leader in TV marketing as well as TV and radio sponsorship, enjoys a good reputation in terms of (TV) know-how, service and price reliability and is also starting out with the Swiss Radio Pool (SRP) as a partner: 15 mostly large publisher radio stations in German-speaking and French-speaking Switzerland with a total reach of around two million listeners. Publisuisse had convinced the SRP with a concept that envisaged "an open placement model and the use of the Publiplan online booking and processing system". According to the spring communiqué, it was also intended to "sustainably develop the radio advertising market".
Over the past two months, Bernhard Krättli has had to concretize what is meant by such buzzwords. He is Managing Director of MediaSense, Publisuisse's new radio subsidiary, and has now presented the concept to intermediaries, agencies and radio stations.
What initially impresses is Krättli's frank analysis of the radio market: IP Multimedia's entry into the radio advertising market six years ago may have broken Radiotele's quasi-monopoly, but it has also led to cut-throat competition and not to additional market share for radio as an advertising medium, says Krättli. On the contrary: the gross-net gap has widened, there are some dumping offers on the market and the radio image is suffering accordingly. The former politically motivated rather than customer-oriented advertising pools and a somewhat antiquated booking procedure by fax and email are also detrimental to the medium and its reputation.
The MediaSense concept now aims to find a way out of this situation with three key points: A participation of the SRP radios in the marketer MediaSense, no exclusive marketing of the SRP and - as the centerpiece - a more efficient handling of radio advertising.
As far as the ownership structure is concerned, MediaSense is 51% owned by Publisuisse and 49% by SRP members. "This makes MediaSense the only Swiss radio marketer with broadcaster participation," emphasizes Krättli. "We hope that this will lead to closer cooperation between supply and marketing." Both parties are to contribute their strengths with this stake in MediaSense. "Private radio stations can also benefit from Publisuisse's professional image. That's why the SRP wanted to let Publisuisse take the lead," says Krättli.
In order to achieve the second point, more efficient processing of radio advertising, MediaSense is making its Publiplan online booking tool available as a kind of industry tool: Not only the SRP, but also all individual broadcasters, intermediaries and media agencies are to be given access and can then use it to handle their national radio advertising. "But we are not forcing broadcasters to book via Publiplan. They are free to stay with the current booking procedure," says Krättli. However, he points out that from 2008 the data from the planning tool Radiomanager will also flow into Publiplan, which will improve handling. "This will bring the medium of radio up to the same level of processing as other media," emphasizes Krättli. This is the basic prerequisite for being able to increase the medium's market share at all.
The third point: although MediaSense has the SRP's marketing mandate, it does not have an exclusive lease. "All intermediaries who allocate advertising to the SRP receive the same commission, including MediaSense," says Krättli. The only condition: The SRP must be booked via Publiplan. Anyone who has mastered this tool can book radio advertising online. MediaSense ensures efficient processing for market partners who book online. However, Krättli does not want to say how high the fee for processing will be.
Despite the open system, some broadcasters have reservations - primarily political ones (see box): They fear being too closely tied to the SRG. There is also little enthusiasm among broadcasters. One possible reason: both IP Multimedia and PubliGroupe are in the process of developing their own tools and are therefore hardly prepared to take over the Publiplan and pay for the processing. "No problem," says Publisuisse CEO Martin Schneider, "interfaces are possible between the various tools." Nevertheless, Publisuisse is probably in pole position. This is because Publiplan has long been widely used by the larger agencies for TV bookings and dealing with radio adaptation should not be a problem for them. The situation is different with the tools from IP and PubliGroupe: they first have to be introduced to the agencies and radio stations - but whether they want to work with three different tools is another question. But the main thing is that if agencies can plan and book radio without the help of intermediaries in the future, why do they still need intermediaries? In any case, they will have to reposition themselves - or give up.
Conclusion: Only time will tell whether the market entry is just a milestone or whether it will also be a turning point for the industry - in one to two years' time, if new customers choose radio as an advertising medium and radio advertising gains market share. Markus Knöpfli
Confusion about agency commission If a marketer books with a broadcaster, he receives an agency commission (AC) of at least 10 percent. If Radiotele books with one of its leased stations, the commission is 12 percent or more. If IP Multimedia books a leasehold station from Radiotele, the commission is at least 5 percent.
It is unclear which sales are granted and demanded by MediaSense. Although Bernhard Krättli has already presented his system to all competing intermediaries, the information is still different. MediaSense demands a commission of 13% from SRP broadcasters and grants the same commission to all intermediaries, according to one competitor. "Initially we receive 10 percent, from 2008 7.5 percent," says another. Krättli remains silent. "I don't want to comment on these figures," he says. (mk)
MediaSense suedAt the end of April, the Secretariat of the Competition Commission (ComCo) gave MediaSense the green light. The Swiss Radio Pool's participation in the Publisuisse subsidiary was not a notifiable merger, it said. In the meantime, however, and even before MediaSense officially commences its activities, the ComCo has received "a complaint against Publisuisse and MediaSense", as confirmed by ComCo spokesperson Patrik Ducrey. The ComCo is now investigating "possible abuses of a dominant market position". Further documents have been requested. However, it has not yet been decided whether or not proceedings will actually be opened, Ducrey emphasized. (mk)
Comments on the MediaSense conceptIn terms of content, there are question marks over the MediaSense concept. For example, it is not clear in detail under what conditions "non-SRP radios" can participate, criticizes Sunshine Managing Director Marco Meier. Christian Gartmann, Managing Director of Radiotele, has a similar view. "An assessment of the 'open' MediaSense model and Publiplan as a radio tool is currently not possible. Too little information is available for this."
BeO station manager Martin Muerner particularly welcomes the fact that MediaSense wants to increase the market share of radio advertising. But he also wants to measure the newcomer against this claim: "MediaSense must primarily succeed in bringing new customers to the radio and not simply poaching customers from existing agents."
Jürg Bachmann, President of the Swiss Private Radio Association, finds it disturbing from a regulatory perspective that the SRP is opening up access for SRG marketer Publisuisse to a market that was previously reserved for private providers: "There is a social consensus that the SRG is not allowed to broadcast radio advertising; that's what the RTVA says. It is now up to MediaSense to prove its independence from the SRG and its commitment to all private radio stations."