| 28 Mar 2023
Radio Creating Value Ad

2 007 saw innovations in advertising on radio. Will 2008 see radio reaping the results of the experiments?

Seamless integration is the name of the game, and radio stations that experimented with the format in 2007, are ready to take the theme forward in the new year.

Radio helped the advertiser to innovate in the year gone by, but with the new players yet to dig their heels in properly, the effects of ingenious aural advertising will probably take another year to show.Nevertheless, radio advertising revenues are now on a track that Radio Mirchi COO Prashant Panday terms 'robust', if not 'terrific'. "Two years of good growth, and its clear no advertiser/agency planner worth his basic MBA degree is asking questions like "Radio? What's that?" or "But you charge more than even MTV"!" he avers.

With radio spreading to more than more than 50 towns by the end of 2007, and stations intent on increasing radio's share of the ad pie, the changes are beginning to show. Says PricewaterhouseCoopers' Entertainment & Media Practice analyst Smita Jha, "In 2007, from a business perspective, there were attempts by radio companies to pool their ad inventories for better utilization and better rates from advertisers. In terms of attracting advertisers, this was done by a few radio stations on the basis of their niche genres e.g. the radio advertisers say on a radio station focussed on women's genre were largely from domains related to women genre."

Red FM COO Abraham Thomas believes the focus last year has been on delivering effective and innovative content, seamlessly integrating a client's brand on-air. "Red FM has consolidated its leadership position and success because of its local flavour and strong brand positioning. People of Mumbai, Delhi and Kolkata identify with Red FM's Bajaate Raho Attitude, and this is what has worked immensely in our favour."

Radio City CEO Apurva Purohit adds, "For the radio industry, 2007 was a year that started off with several distinct lacunae; with concerns such as differentiation, measurement, talent and regulation top of mind for most broadcasters. For Radio City, extending our presence from seven to 15 stations with a focus target group of SEC AB 25-44, we unveiled our fresh, vibrant brand philosophy 'Whatte Fun' along with an all encompassing 360 degree campaign to communicate the same to our listeners in 2007.

Concepts like 'Radio City MQ' were value-added activation led concepts for advertisers across the nation allowing listeners another level of interactivity and bringing the advertiser closer to his audience, believes Purohit, which helped the station garner an increase of over 30 per cent in advertiser base over the last year.

Avant-garde radio advertising ?“ way to go!

Radio advertising that started with stereotypical jingles and direct messages to the listeners saw a lot of originality and innovation in concept, incorporation and execution that marked a subtle advertising shift in the radio sector in 2007.

The addition that got most players excited was the advent of the Radio Audience Measurement (RAM), that helped advertisers in their decision making process towards placing of the advertisements on radio.

Says Purohit, "It allows media planners to showcase the saliencies of using the medium by demonstrating the cost-benefit analysis. This would embolden planners to recommend radio to advertisers who seeing the merit of this research-backed proposition would in turn, enhance their spends on the medium. About the innovation in radio advertising, they are beyond the obvious yet very relevant to the listener create an excitement among the audience with a superlative impact on the advertiser's business. Advertisers are certainly open to trying out new, innovative propositions. A value proposition which allows the advertiser enhanced benefits over a vanilla radio spot would always interest him."

Thomas agrees."Radio advertising is moving beyond ads and jingles to integration, interactivity and innovations that establish radio as an effective medium in its own right with its own strengths and advantages and not just a media multiplier. Brands are exploiting synergies with radio properties such as Fevicol's association with a property called Red FM Pe Chaar Superhit Gaaney Chipak Ke - a great synergy between the uninterrupted music experience and "Yeh Fevicol ka mazboot jod hai tootega nahi."

Why radio?

Avers Abraham, "Brands and agencies are now waking up to the possibilities of radio - it's not just 'live,' it's 'alive.' Radio players too are becoming more serious about the business of selling ideas."

Red FM has its own 'Creative Solutions' team which acts as an ad agency delivering custom fit solutions for clients. Still, Abraham acknowledges that advertising on radio is still very experimental. When allowed, multiple licenses will effect differentiations in content and format and consequently, advertising.

Expanding on his 'MTV' theory, Panday says, "Radio rates have indeed gone past MTV's, very substantially! Today the larger radio players (City, Mirchi) charge more for Mumbai or Delhi individually than MTV charges nationally. But are the prices commensurate with what they deliver? No way and that's what makes the story for 2008. In terms of the importance of the medium, radio is inching closer and closer to TV. For eg., Mirchi alone gives more reach and now the diary (RAM ?“ though only 17% accurate) shows that it delivers more GRPs too, than most TV channels. And the advertiser realizes that and has started to pay us accordingly. Today, the average price for the Mirchi network is of the order of Rs 12000 per 10 seconds with premium schedules going upwards of Rs 15000."

While Purohit says that the year gone by helped radio as a medium to emerge from a supportive medium to a preferred medium to reach out to the masses, it is the value-added initiatives which the advertiser latched on to, with the help of the stations.

The spectrum of options in addition to vanilla product promotions/ radio spots and contests, now also includes value-added propositions such as content integration, brand mentions woven in the RJ's script and ground activation directly involving the listener. Value added outdoor activation led initiatives created an additional point of interface between the listener and the FM station in 2007, bringing both closer.

But money speaks ultimately!

The revenue inflow of FM radio stations went up 400 per cent, from Rs 150 crore in 2004 to Rs 755 crore in 2007, according to an internal study by MindShare Insights. But despite the remarkable growth in the radio sector, the share of overall radio advertising in the total ad spends stands at less than five per cent, which was around three per cent of the total spends of Rs 16,300 crore in 2006, according to TAM.

Most analysts have decided to wait and watch the radio sector, preferring a steadiness over a nippy swiftness. Jha comments, "We are still compiling the numbers on the radio revenue inflow and will release in March ?“ but one needs to appreciate that when such analysis is done, one takes into account how many radio stations were actually operationalized in a particular year, else the growth numbers are not correct. We still have not had a full year of all radio stations being operationalized ?“ hence year-on-year growth needs to take into account this fact."

Purohit too prefers sustained growth over pace. "Internationally, radio comprises seven to 15 per cent of the overall advertising pie. In India, this number varies from three to 3.5 per cent (approximately INR 500-550 crores) which clearly shows the potential of business yet to be explored. This bodes very well indeed for an industry which is seeing daybreak through growth and a robust measurement system like RAM which justifies the revenues spent, to advertisers."

Biggest advertisers in '07

Where all consumer friendly products found its way to the advertising space on radio, a few of movie promotions, artist-tie-ups and brand involvement kept the scenario equally busy in the last year. According to a study by TAM Adex, the largest ad spenders on radio were the cellular services companies. Panday points out that while media and entertainment continues to be bullish on radio, the all-time-favorite FMCG, seems to but with declining importance."

Says Jha, "For FMCG companies, TV and print will continue to be on focus since it provided instant reach to a national audience along with video. Radio is likely to remain the third cousin- focussed more on local advertising and niche promotions e.g. when the three leading newspapers were launched in Mumbai two years back, one of them focussed their spends only on the Outdoor medium, hence Radio has the ability for advertisers for such experimentation and hence will find favours from media planners."

Panday's verdict for 2008 sums up the scenario.

1) Expect radio to grow 100 per cent in 2008
2) Share of radio to go past six per cent
3) Further expansion in the private FM network to 100 towns
4) Regulatory reforms ?“ news and multiple frequencies may be allowed and
5) more programming formats will come around and
6) radio will be the coolest medium in 2008!"