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Finland Lifts Ad Limits on Commercial Radio

Stations never reached the now-dropped 20 percent limit

HELSINKI — As of June 2018, commercial Finnish radio stations will be allowed to broadcast as much advertising as they want. This is because Finland’s broadcast regulator, the Ministry of Transport and Communication, will be lifting the current “20 percent limit.”

Under this rule, commercial Finnish radio stations can devote no more than 20 percent of their on-air time to radio ads.

Officially, “The ministry says that the objective of the new more liberalized rules is to improve radio stations’ earnings ability and give them more leeway in terms of content placement,” said the Finnish news site, which is operated by the Finnish national public broadcaster, Yleisradio. “The legal reform is part of a government-led drive to dismantle operational norms in several areas.”

Unofficially, “the real reason that Finland is dropping the 20 percent limit on commercial radio advertising is that no one ever hit that limit, since it was raised from 10 percent in 2015,” said Stefan Möller. He is CEO of RadioMedia Finland, the country’s commercial radio lobbying/marketing association. “As a result, there is no point in the government paying staff to monitor a rule that no one has any intention of breaking.”

When it comes to the mix of music, talk, and advertising on Finnish commercial radio, Möller estimates that the average amount of airtime currently devoted to ads is an average of 15 percent per station. The reason for the restraint is self-interest: With RadioMedia’s CEO estimating that there are about 25 radio stations per market for Finns to choose from nationwide, the key to success is “not to annoy your listeners,” he said.

“Too many commercials per block, and your listeners will go elsewhere, even if the ads are only 10 seconds in length each,” said Möller. “This is because too many ads provides listeners with too much conflicting content. When this happens, Finns will tune away to other stations with fewer ads to listen to.”

[Read: Dial Report and Ad-ID Seek to Standardize Radio Spot Tracking]

Losing listeners matters in Finland, because the average listener is a devoted person who tunes to radio up to three hours daily. They also tend to tune “to 1.6 stations a day, and no more than 2.9 stations a week,” said Möller.

On the good side, Finns who like a particular radio station tend to be loyal to it. On the bad side, listeners who are alienated by too much radio advertising — “or too much of anything, for that matter,” Möller said — will go away and stay away.

Given these facts, Finnish commercial radio is self-regulating its percentage of on-air commercials, eliminating the government’s need to do so. “To play too much advertising is bad for any radio station’s business,” concluded Möller. “Finnish commercial radio stations don’t do this, because the people who run them are not stupid.”