The Hindu Business Line : Chennai FM stations eye outdoor ad budgets

Chennai, July 2 When hoardings came down like nine pins overnight in Chennai in April due to a State Government drive, many in advertising and marketing circles believed the loss of this medium would translate into a short-term spike in FM radio advertising. However, radio stations are finding that it’s not so. They are having to evangelise the benefits of the medium quite a bit to convince advertisers to invest more in radio.

Positive signs

“Not much has come into radio but there are positive signs,” says Mr P.B. Ramaswamy, Cluster Director (Tamil Nadu), Big 92.7 FM. “Outdoor is a very attractive visual medium and radio cannot compete with that. However, we are going to campaign aggressively and work with our clients to route their budget into radio,” he says. Big, however, has a tactic up its sleeve to compensate for the loss of the visual medium – it can press its bus and van (used for roadshows) into service by branding the vehicles with the clients’ ads and bring in an audio and a video effect that way.

Other options for outdoor advertising still exist – bus shelters, railway stations, bus and train panels and even in-store advertising – and monies may go there, but with a convincing presentation, not to mention the savings made vis-À-vis print and TV, there is hope that FM radio will benefit.

Mr Ramesh S.K., Executive Vice-President and Head (Content), Hello FM, says money has been flowing “from skylines to airlines” ever since the ban on hoardings came into effect. It took a lot of evangelising and educating but it has paid off. As is widely perceived, hoardings are not just a retailer’s choice; many national brands use hoardings and are bound to look for other options, he adds.

Interestingly enough, a source from another radio channel wonders if national brands would invest more money in radio in Chennai alone. It is true that they have lost a reminder medium with hoardings no longer being around, but it’s not clear whether they will make an exception for Chennai and invest more in radio, he says. According to him, it’s too early to say if the hoardings ban has affected radio positively.

According to Mr Ashit Kukian, Executive Vice-President and National Head (Sales), Radio City, “The ban on hoardings in Chennai has come at a time when radio advertising is on the upswing. Recognising the power and efficacy of the medium, advertisers are increasingly getting onto the FM bandwagon. Thus, while the ban may have resulted in incremental revenues for radio for now, attributing these entirely to the ban would be rather unfair to radio which is witnessing a growth in revenues on its own steam.”

Spends on radio

Mr Kukian says spends on radio have increased by a whopping 87 per cent during 2005-2007. Internationally, radio comprises 7-15 per cent of the overall advertising pie. In India, this number varies from 3- 3.5 per cent (approximately Rs 750 crore), which shows there is much potential yet to be exploited.

Mr Kukian says the medium is perhaps not being used the way it needs to be used. “This very element is critical to the business of radio and this still remains a need gap. Most radio ads today are an extension of the print or TV campaigns. However, there is a considerable shift in the situation wherein ad men have taken interest in planning radio from day one which includes the communication strategies, which will bring about a huge change.”

Big 92.7 FM’s Mr Ramaswamy says the radio channels’ efforts down the years to educate clients on the efficacy of radio advertising has paid off. “We have to tell them what we can do specifically for their products. We have to give them ideas on how to promote concepts on air,” he says.

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