MEDIA: Analysts foresee radio becoming 7-8 per cent of the advertising revenue pie.
The vacuum created in the advertising industry with the hoardings removal drive is expected to be filled by radio. Hoardings are banned in Bangalore, Tamil Nadu and partially in Delhi and Mumbai.
CD Mitra, president, Mudra MAX (Media, Analytics & Convergence), says: “Though radio is growing healthily in all the markets, ban on hoardings in certain markets has given it a sort of boost. Most of the money of outdoor removal goes to radio for two reasons. First, the cost of entry on radio is very low. Second, most appropriate substitutes for outdoor are print and radio. And since print is becoming expensive, radio gains for that matter too.”
“A chunk of hoarding business must have gone to radio. It depends on category of products. Some will go to point of purchase, print media etc, depending on the role the medium plays,” notes Mona Jain, head, strategic investments, IMX (media buying unit of Starcom MediaVest Group and Zenith Optimedia).
According to a Radio AdEx (a division of TAM Media Research) report, released in August 2008, real estate, cellular phone services and retail categories have been having the highest secondages of advertising on radio in Mumbai, Chennai and Bangalore (all three categories make for the biggest spenders on outdoor media). Retail gets the biggest revenue for radio, 60 per cent of the advertising is from the retail kitty.
Besides that, services, education, health and financial categories have increased spends on radio in the markets where hoardings are banned.
Outdoor advertising is used to tease, to create dynamic promotional concepts, to build anticipation and generate excitement to magnetise the audience. And radio is the unparalled substitute considering the above purposes outdoor medium serves. Moreover, radio offers customisation and has local appeal like outdoor medium.
PB Ramaswamy, cluster director, Big 92.7 FM, admits: “Yes, some money has come to radio because radio too happens to be a very local medium but if the radio channels meet the clients and offer them a package of on-air and on-ground solution, clients will not hesitate to put the hoarding money on radio.” While hoarding is a visual medium and radio being an audio medium, it will take time for the clients to get impressed with the medium to put their hoarding money on radio.
“Textile and jewellery segments have used radio extensively, the money saved from hoardings ban. Hoardings in Chennai was a huge business and clients in telecom, textiles, jewellery and others were spending good per cent of their advertising money on hoardings. I would say, all radio channels put together would have got around 2 per cent of the hoarding business. Long way to go,” adds Ramaswamy.
Ashit Kukian, executive vice-president and national head, Sales, Radio City 91.1 FM, says: “The ban on hoardings 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 sheer steam.”
The medium is seeing daybreak through growth and a robust measurement system like Radio Audience Measurement, which justifies the revenues spent to advertisers. Now, advertisers have taken interest in planning radio from day one which includes the communication strategies. Radio spends have increased by a whopping 87 per cent by in years 2005-2007. Radio comprises nearly 3.5-4 per cent of the advertising revenue pie today. Very soon, analysts foresee radio becoming 7-8 per cent of the pie.
