Is radio not good enough for premium brands?

10 Feb,2012

 

By Robin Thomas

 

Over the years, growth of Radio as a medium has been restricted, thanks to TV. But, to the credit of many a radio expert over the years and advertisers who have believed in the medium, radio continues to sail; and sail even more promisingly when times are choppy.

 

Also, sample this: The FICCI-KPMG Indian Media and Entertainment Industry Report 2011 states that the radio industry in India is expected to grow at 20 per cent CAGR (Compounded Annual Growth Rate) from the current base of around Rs 1000 crore. Radio’s share of media spends is also expected to rise from 4 per cent to 5 per cent by 2015. Among categories that advertise on Radio, Real Estate, Telecom, Retail, Education and TV channels are the ones advertise the most.

 

The medium promises reach, greater recall and marketing solutions that are cost-effective. Despite this, why do premium advertisers shy away from advertising on the medium? It is known that premium brands prefer speciality magazines, internet and mobile and TV more than radio.

 

Harish Bijoor, CEO, Harish Bijoor Consults agrees that premium brands don’t advertise much on radio. “Premium brands look at radio as a non-premium medium. There is ample research available which reveals that premium-category shopper do not depend on awareness scores for luxury brands from radio. In fact, radio tends to negate effort for luxury brands as of now and proves counter-productive to the effort. Radio is much too mass for luxury brands.”

 

According to B Surender, Senior Vice President and National Sales Head, Red FM, the share between national and local advertisers on radio are 50:50 of which premium advertisers contribute merely six to eight per cent of the overall national advertisers. BMW, Volkswagen, Mercedes, Skoda, Blackberry, Marks & Spencer, Louis Philippe, Tanishq, smartphones , Lufthansa , British Airways ,Virgin Atlantic, Singapore Airlines, Emirates are some of the premium advertisers advertising on radio.

 

For most of these premium brands radio is more or less a reminder medium, it is an extension of the television or print advertisements. Luxury watch brand, Seiko for instance does not advertise on radio at all whereas Jet Airways and HDFC Life heavily advertise on internet and television.

 

Both internet and television have an edge over radio on premium luxury brands. While television has the benefit of being an audio-visual medium, internet is a highly interactive medium.

 

Manish Dureja, Vice President, Marketing, Jet Airways said that the airline brand banks more on internet and mobile as against radio. “We are not advertising much on radio or on television as most of our marketing budget is performance driven, where we look to generate sales through search engine marketing and predominantly digital marketing. With internet penetration and the emergence of internet mobile, it has become mandatory for us to be present in the online domain. Radio, on the other hand is a localised medium and caters to a specific city. More importantly through digital media, I am able to reach consumers far more effectively than any other medium.”

 

For Sanjay Tripathy, Executive Vice President-Head Marketing and Direct Channels, HDFC Life, television and the internet are the preferred medium because of the reach and better ROI. “Television is the preferred medium for HDFC Life because of the awareness it creates, and maximum reach it offers, whereas the internet has delivered better ROI for us. Radio on the other hand is more of a brand recall medium so most of our marketing budge or the media spends is skewed towards television and the internet” he said.

 

Disagreeing that premium luxury advertisers are apprehensive about advertising on radio, B Surender of Red FM said that although there was a perception issue in the past, some of them wrongly assumed that the quality of FM listenership profile may not be very good. “Contrary to this belief, there are instances of advertisers abroad specifically using radio to target billionaires and rich entrepreneurs, since radio could reach out to them better than other mass media. But, in the past one or two years there is a positive change in our country as well with more and more premium brands in automobile, international airlines, consumer durables, telecom, jewellery, finance, retail etc have regularly started using radio as a part of their media plan. However, I feel there is enough scope to further improve the usage of radio by luxury brands in the near future.”

 

With the rollout of phase III, radio will see an increase in reach in India. Multiple frequencies will allow FM stations to offer targeted or niche programming for the elite listeners. However, there are many challenges too: The radio industry will have to educate the premium luxury advertisers, not only about the effectiveness of the medium in delivering better ROI for their brands, but also about the quality of its listenership profile.

 

Perhaps for now at least, radio is too large, too ubiquitous; a bit too common a medium for the un-common luxury brand. There is more thinking required on the part of radio station heads to get premium brands on board.

 

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