MUMBAI: Have the tough times proved to be a boon for the radio sector? FM players across the country have seen a marginal growth rather than a dip in their inventories in the last quarter, and anticipate a rosier picture in the coming year. According to Radio Adex data, monthly radio ad volumes registered a three per cent growth from December 2008 to January 2009. The October-December 2008 quarter showed a slightly rosy picture too - clocking Rs 23 million in ad volumes for the radio industry, a seven per cent increase over the Rs 21 million registered in the July - September quarter.

The radio industry is now busy exploiting the current economic slowdown situation by showcasing its cost effectiveness and providing maximum value for money to their advertisers.

Recession- An optimistic phase for radio

Radio operators are looking at the slowdown as an opportunity to grab their share of advertising, conventionally directed at print or the electronic medium, media that are now too costly for the cautious advertiser. With many brands tightening their budgets for advertising, media planners are on a look out for maximum return on investment options for their clients.

As radio consultant Sunil Kumar opines, Radio is not affected and brands are resorting to focused planning because of budget deficiencies. Radio has the advantage of precise targeting in that it can pinpoint its target audience, the language, day parts and so, it is a preferred medium to invest in these tough times. There are some clients who do not seek radio for spots but for their brand activations, so here radio is also being used for tactical promotions....

Agrees Radio City CEO Apurva, From November, print has demonstrated a negative dip. Radio as an advertising medium is effective than print locally as it reaches the same population with a far-lesser CPT (cost per thousand).... Interestingly, the Radio Operators Association of India launched a media campaign in November 2008, extolling the virtues of radio as a medium over other media. The industry seems to have started reaping the dividends.

Advertisers are increasing their investments on radio, asserts RK Swamy/BBDO group senior media advisor PRP Nair, Earlier there used to be TV and radio combination ads but now they are increasing their spends on radio. Also, retailers are using the medium like never before and there are negotiations happening....

Observes Sunil Kumar. Radio is innovative in rate packages and the inventories are not down. Rather, the rates are going up....

Apart from its cost effectiveness, radio comes with an advantage of being innovative and target specific. As Big FM Senior VP sales Praveen Malhotra adds, Advertisers can customise their advertising according to their local needs and is an apt platform for brands looking for tactical communication with their consumers....

Radio stations in Kerala were launched in mid 2008 and the advertisers who had failed to allocate advertising budgets for radio are altering their plans by adding radio, observes Radio Mango Senior marketing manager Kamal Krishnan. With the onset of the slowdown, there has been a change in the scenario with many national players looking to radio as a potentially effective advertising medium. FMCG clients who never allocated budgets for radio are coming with enquiries, which is a positive sign....

The south market is on the safer end as it has a healthy combination of 50 per cent retail and 50 per cent corporate advertising, says Hello FM national sales head Bharath Vishwanath, Our station hasn't suffered any dips in the months of November and December as the local retailers were active owing to the shopping festival season. Rather, we achieved 120 per cent more than our target numbers....

Vishwanath admits that there has been a dip in the month of January 2009 but doesn't attribute it to 'recession'. The start of the year generally has low spending as advertisers splurge more during the year end. This is the most 'benefitting' medium in times of recession as it is cheaper than TV and print. Many advertisers might opt for this cheaper medium as radio covers almost 80 per cent of the population....

From the present eight per cent of the advertising pie, radio is going to increase sizeably in the coming year, believe radio operators. As Purohit maintains, This year, print will be flat or a minor degrowth would be seen, television will experience five to six per cent growth and radio might grow at 20 per cent....

Real estate, the category which was among one of the top advertisers in 2008, has however dipped to a lower position. It is known that the profile of advertisers differs according to the regions and stations and radio stations across India have experienced a change in their advertisers' profile.

As Fever's Delhi station head Neeraj Chaturvedi states, The sectors most affected are automobile and real estate, and for our Delhi market, we weren't banking on both these sectors. For us, it was more of educational advertisements and that sector hasn't shrunk inspite of recession for obvious reasons. Also, lifestyle and FMCG are doing well and we occupy about 15-17 per cent of the market share in Delhi. Real estate was never our area as our prices were high compared to other players in the market....

Inspite of the dip in advertising from real estate and consumer durables, FMGC hasn't been affected to a large extent, confirms Nair. Also, automobile is picking up but there is reduction in the telecom sector. One category which will be on a rise inspite of recession is education, and with the admissions season round the corner, it is likely to contribute even more....

At Big FM, among the affected categories include real estate, automobile and consumer durables and the top spenders are telecom, FMGC, education and government ads.

In the south, the FMCG segment is looking seriously at the radio and the market here is dominated with telecom advertisements followed by independent retailers. Some of the key advertisers in the region include regional telecom players, financial institutes, FMCG, real estate, media etc,... points out Vishwanath.

Kerala markets have seen a dip in the month of November and January. The profile of advertisers in the south mainly includes the textile and jewellery retailers. There has not been any cut down in the retail market as all the deals have been signed on an annual basis. However, a move noticeable is that the quantity of print, television and outdoor advertising has reduced here, but radio advertisements seem to be increasing,... says Vishwanath.

Retail is the king

As radio is a relatively inexpensive medium, the investments in radio have increased for its cost effectiveness. Although there has been a dip in ads from national advertisers, the retail segment is filling the radio inventories. Radio with an advantage of being local is a preferred medium for advertisers looking for a mass local reach.

Nair explains, Independent retailers mainly bank upon local print and radio and with print out of their pockets, radio must exploit this great opportunity....

Although real estate has been hit, the retail segment has essentially discovered value in radio, says Malhotra. On a regular basis, we have 30- 40 local retailers on our advertisers' board. To survive in this slowdown, you need to have solution oriented approach and stations should look forward for selling radio as a medium rather than just selling spots and inventory across the country. With print and TV costlier compared to radio, it is an opportunity for radio to bank on promotional tactical activities....

Referring to the south scene, Krishnan says, Radio was included as a small chunk of client budgeting but now they are allocating a good amount for radio within Kerala and the corporate funding has increased for 2009 compared to last year....

Normally, national advertisers look out for sponsored slots and there has been a dip in such slots, reveals Radio Misty CEO Nishant Mittal. There has been an unexpected support from the local retailers, while there has been a dip of seven to eight per cent advertising from national players but that has been covered by the local retailers. The year started on a positive note with a small pick in January and real estate ads are picking up....

Elaborating on the reason for increase in real estate ads, Sunil Kumar avers, There has been a dip in real estate advertising but now the developers are coming up with affordable low cost housing ad would come back to radio for conveying the message. Radio is an apt platform for quick buildup to exhibit their new product mix within a limited advertising budget. Also many retailers are offering discounts for their customers and radio advertising has gone up marginally....

However, radio cannot compete with print in terms of reach. It is time for radio to explore its potential but it needs support from other media to position a product in the market and cannot completely replace the traditional advertising mediums.