[cr-india] Radio creating value Ad

[sakthi vel]

Radio creating value Ad

2007 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 integrations, 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!" 

Amen!

http://www.radioandmusic.com/headlines/y2k8/jan/30jan/radio_ad_report.php

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