The Hindu Business Line : FM stations to zoom in on regional ads in small towns

FM radio is set to sweep the airwaves from Akola to Aizwal and from Srinagar to Tuticorin providing an ideal platform for advertisers. Besides offering varied programming to people living in the hinterland, the smaller cities and towns are expected to contribute significantly to the advertising revenues in the next few years driven by local advertising.

According to Mr LV. Krishnan, CEO, TAM India, "Radio has a great potential in the smaller towns where there was no other local medium except newspapers. The primary radio channel was All India Radio (AIR). But with private FM radio stations launching services, this is set to change."

Estimates prepared by the newly launched research firm Media e2e indicate that the overall advertising radio revenues has been growing from Rs 318 crore in 2005 to Rs 421 crore in 2006 and could touch Rs 686 crore in 2007. "We expect that revenues from the smaller towns will start accruing from 2007," said Mr Atul Phadnis, Chief Evangelist, Media e2e.

"Initially, the novelty of the medium and the hype it creates will bring in the advertisers. Besides local establishments, national advertisers with a micro-focus would be interested in using this media platform," said Mr Ajit Varghese, COO, Madison Media Infinity. While money in the metros may continue to be higher than smaller markets, the advantage of the latter is that advertisers will be entering a market where there are no benchmarks, no ratings, no statistics, elaborated Mr Phadnis.

Added Mr Krishnan, "Local advertisers like car service centres, educational institutions and retailers are expected to use these channels. But national advertisers could package their rate cards to include smaller towns. For instance, if you buy spots on stations in Mumbai and Pune, other centres such as Sangli or Kohlapur could be bundled at small additional costs."

Certain smaller centres such as Surat, which are economically self-sufficient, may be able to fetch in revenues faster than some of the Eastern areas, said a media planner. He added that in these centres, it would be difficult for more than two stations to compete.

However, radio broadcasters are confident that there is money to be made in the medium. Ms Apurva Purohit, CEO, Music Broadcast Pvt Ltd, said that another way to grow is to offer different content. "At Radio City, we are looking at offering new content that is far more vibrant. While music will continue to be the core, the programming around it should be innovative," she said.

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