Is anyone out there listening?

In the race for advertising revenue, Europe’s radio stations at best win the bronze medal: their 5 percent share of advertising expenditure leaves them trailing well behind television and newspapers (Exhibit 1). Their predicament reflects both radio’s history, in which advertising has been either banned or severely restricted, and continuing geographical fragmentation, which makes media planning difficult for advertisers of national scope. Advertisers, moreover, have questioned the accuracy of ratings of audience size.


History and geography haven’t been the only handicaps of radio; it is also hampered by its very character. A nonvisual medium can’t compete with the breakneck editing and eye-popping effects of many television commercials—a problem that explains why consumer goods companies have traditionally spent up to 75 percent of their budgets on TV. Nor can radio approach print’s ability to convey product information quickly, clearly, and strikingly, to mass and niche audiences alike.

But two, if not three, developments are transforming radio’s prospects. The first, which makes truly national networks a possibility, is the growing availability of commercial licenses for stations in Western Europe. The second is the loosening of restrictions on the number of minutes per hour that may be devoted to commercials. In the...