The Hindu Business Line : Local, retail advertisers dominate radio

THE verdict is finally out. FM radio stations have managed to attract a set of advertisers quite different from the traditional television and print media.

According to the first report of Radio AdEx, as a result of a collaborative effort between TAM India and AirCheck India (a subsidiary of RCS Inc, USA), of the top 10 product categories in terms of adspends on TV, press and radio, only two categories — cellular phone service and cars/jeeps — are common among the three.

"The most striking fact is that local advertisers and independent retailers account for close to three-fourth of the total advertising on radio," said Radio AdEX. Another interesting fact is the second heaviest advertiser are promos of television channels that account for close to 13 per cent of the advertising duration on radio. Other advertisers include Internet services, real estate and properties, chocolates, shampoos and even floor cleaners.

A split of spends by local advertisers in the four metros indicates that these account for 81 per cent of spends in Chennai, 70 per cent in Delhi and 66 per cent in both Mumbai and Kolkata. Currently the radio accounts for close to 2 per cent of the Indian advertising industry and is currently estimated to be at Rs 150 crore for the first nine months. It is estimated that for the full year spends could touch Rs 220 crore. Also, the industry has grown at almost 22 per cent over the previous year.

However, the radio industry operators have been seeking a change from the existing license fee arrangement to a revenue share mechanism. The industry has been claiming losses. According to data compiled by the Telecom Regulatory Authority of India (TRAI), for the financial year 2003, the 24 radio stations across the country grossed total revenue of Rs 114.67 crore, while the expenditure has been about Rs 235.01 crore.

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