The Hindu Business Line : ‘FM radio biz can beat projections’

Mumbai, March 26 Advertisers are yet to use the medium of radio effectively. This was the consensus of a panel discussion, ‘Radio Rocks’, in the FICCI-Frames 2008 media convention held in Mumbai.

The ease of access to the radio, the increasing hours commuters stuck in traffic spend listening to it, private FM’s popularity with urban audiences (contrary to the perception that it caters to rural audiences) and the shift towards being more interactive with the listeners are some of the factors that are in favour of radio advertising, according to the panelists. Private FM radio remains an under-penetrated medium, but the number of towns under coverage is increasing. What’s more, RAM (Radio Audience Measurement) data suggests that 49 per cent of the listeners have access to radio on their mobile phones, which means out-of-home listeners can be tapped as well.

Strong growth

“The radio business is poised to grow much ahead of the 24 per cent growth rate that has been estimated by PricewaterhouseCoopers,” says Mr Prashant Panday, CEO, Radio Mirchi. If the TRAI recommendations to allow sports and news broadcasting on radio and to allow broadcasters to operate multiple channels in a city are implemented, there could be at least one year of 100 per cent growth for the radio industry either in fiscal 2009 or in fiscal 2010.

The recommendations, if implemented, could also improve the scope for differentiation. Mr Panday believes restricting operations of radio stations to one per city forced radio broadcasters to go for the lowest hanging fruit to reach the masses - contemporary Hindi music. More niche channels would be introduced once broadcasters operate multiple channels within a city. However, advertisers are missing out on the tremendous customisation that radio stations have to offer. Advertisers tend to give a single advertisement to be run across the entire network. But they should instead be providing a creative customised for each station, feels Mr Panday.

Another problem is the fact that local advertisers still do not tap the radio. Seventy-five per cent of advertising income still comes from national advertisers, according to Mr Abraham Thomas, COO, Red FM. The inability to attract significant local advertising is a reason why some of the smaller radio stations continue to struggle.

Speaking to Business Line on the sidelines, Mr Abraham Thomas said that while it is true that regional news channels, regional language print media, hoardings and other media are also vying for the local advertiser’s spends, radio acts as a real-time medium which allows one to run a series of short advertising campaigns that can be easily tweaked according to listener response. He feels that advertisers should go beyond simply stripping the audio track from the television commercial and running it on radio networks.

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