MxM Mondays: Is Radio perceived as a poor cousin to Print & TV?

17 Sep,2012

 

By Ananya Saha and Robin Thomas

 

The onslaught of FM radio came as a breath of fresh air for listeners in India by the late nineties, and the success of FM Phase II launch further fuelled the FM growth story. According to industry estimates, radio’s overall advertising pie is around 4.5 per cent, and this is expected to growth even further with the FM Phase III launch. The medium promises reach, greater recall and marketing solutions that are cost-effective. With FM Phase III also expected to roll out soon, the radio industry gears up for another phase of growth which may see newer genres coming into play, differentiation in content, news, sports broadcasting and so on. However, despite these developments, why is radio perceived as a poor cousin to its traditional counterparts, particularly print and television? How do FM players, media planners and the advertisers view the medium?

Comments in alphabetical order of last names

What the radio industry has to say:

 

Harrish M Bhatia

Harrish M Bhatia, CEO, 94.3 MY FM:

It is highly unfair to compare radio to print or television considering the policies associated with each medium and the length of time that the media have existed in the private sector. Restrictive governing policies have not allowed radio to diversify its product offering and showcase its true potential as a people’s medium. The private radio industry is still nascent and hasn’t been given the autonomy that television, or even for that matter online media, has enjoyed. Internationally, where markets are more evolved, radio enjoys about 8-10 percent of the advertising pie. Secondly, there is a lack of credible measurement systems to back the potential of radio. While dealing with the issues like long delays in Phase III implementation, music royalties and insufficient measurement tools, the radio industry has barely managed to consolidate resources and sustain itself. What is needed now is a strong mutual focus on solving these issues, hard-selling the medium and moving head-on into the third phase.

 

Although it still does not address certain issues, Phase III should help open up the market for players to expand to newer markets and increase their radio footprint. What will be interesting to see is the change in dynamics that will come into play on account of the large number of non-metro stations that come up in the third phase, bringing radio on par with media like television. Advertisers will be able to benefit from this growth, leading to increased revenue potentials for radio. Moreover, with growth expected from smaller markets, the spends by national advertisers in these markets will also grow as no other medium offers reach like radio, in the fastest possible time, addressing challenges in a particular market and in their local language.

 

Media spends by advertisers are not proportionately allocated to radio even though it has outgrown other media in time spent. As per the recent RAM research conducted in the four markets of Jaipur, Ahmedabad, Nagpur and Indore, average time spent listening to radio is 160 minutes as compared to IRS figures of 107 minutes watching TV, 85 minutes reading the newspaper and 30 minutes on the internet. If properly planned and used innovatively, the radio can do wonders for a particular brand. Hence, there is a need for enhancing the medium further to highlight its mammoth reach and effectiveness, which is what the radio industry as a whole should strive to do. Furthermore, radio needs to be bought on the strength or merit in particular target geography instead of as a network. Having said this, creative selling of radio has allowed greater inroads for some brands, especially in Tier II and Tier III markets, which are rapidly expanding.  Some of the key reasons have been the unique strengths of radio like customized communication to address local market needs, and ‘radio properties’ that contribute significantly in brand building.

 

Sanjay Hemady

Sanjay Hemady, Chief Operating Officer, HIT 95 FM,

FM Radio is young, it has been evolving for 10 years and growing, adding value every single day to the listener and advertiser, its vast, extensive and unparalleled reach undoubtedly will take longer. Other mediums have taken long to establish, why should we compare with traditional mediums when there is no race, there is so much to achieve as a standalone medium. Radio broadcasters have been working towards creating their own territory, convincing clients, brands. The broadcaster is learning with day-to-day experience to give its best, by listening to the listener, by changing formats as necessary, positioning it differently, etc… it will take its own course, the time will come. We love objections and we solve them meaningfully.

 

Expansion to newer markets will mean a bigger reach, we will get to entertain far more listeners than today, new formats will come in, fresh new talent gets identified, more jobs will get created, more brands will add radio as a definite medium. Give it some time, FM Phase III will subsequently open up a bigger offering for brands to reach out to more consumers.

 

The top evolved brands across all mediums are convinced with radio, they have been consistently advertising since FM got privatized. Radio is a reminder medium, it scores on immediacy, it is about consistency and brands who have believed in the future of this medium have benefitted immensely. Brands who have worked closely to understand this medium and used it effectively are a happy partner. Going forward a collaborative approach will add more to this growth, and other extended avenues like Mobile Radio, Internet Radio, Radio Activation will also add revenue.

 

Prashant Panday

Prashant Panday, CEO and Executive Director, ENIL (Radio Mirchi):

I disagree that it is a poor cousin of the other media! Each medium has its own relative size and one has to keep that in mind. A 48-kg lightweight boxer gets the same Gold medal in the Olympics as the 85-kg heavyweight winner gets! They are separate media and should not be compared. However, what is indeed correct is that even radio’s natural share has not yet been achieved. Worldwide, the share of radio is 8.5 percent, and this is just the average. In the countries where radio has developed well (US, NZ, Sri Lanka etc), radio’s overall advertising share is 12-13 percent. In India, radio’s advertising share is just 4.5 percent and the reason for this is that the government has simply not released enough frequencies. The share of radio will increase if 400 Khz separation is adopted by the Government as recommended by TRAI. That will increase supplies to 18-20 private channels per city.

 

FM Phase 3 will only increase share from 4.5 per cent to 6 per cent or so. If we want to go to 8 percent or more, we have to release more spectrum in the major markets.

 

Radio has become a “core” medium now. Every advertiser uses radio and they use it all the time. In fact, radio pricing is also quite strong. Did you know that Radio Mirchi is in the top 10 electronic media brands in the country after Star Plus, Zee, Colors, Sony, DD, Sun TV, 1-2 sports TV channels… It’s bigger than all music channels, all news channels, all regional channels, and all movie channels!

 

Suresh Sanyasi

Suresh Sanyasi, National Sales Director, Radio Indigo

Yes, people consider radio a poor cousin. This has happened because of the endurance power of the medium. The people who do not understand the potential of the medium, cannot do much for it. Radio is and will remain a traditional mass medium. Radio works differently in different areas. Unlike television, this medium takes the demographic and area listenership into consideration. Radio as an advertising medium is harnessed largely by the retail sector and their ad spends on this medium is increasing. The medium provides immediate ROI, and is measurable.

 

Regulatory issues are hampering the content creation on this medium. News and features get immediate audience. Once the regulations are eased, listenership might also increase.

 

 

B Surender

B Surender, Senior Vice President and National Sales Head, Red FM

It is unfair to compare the growth and size of FM radio industry on equal terms with the print and television media here in India. To start with , FM radio was launched extremely late in India around 2002 with steep licence fees,  restriction on genres, frequencies, etc  making the business virtually unviable till the year 2005. It is only after phase two expansion with some policy corrections around 2005-06 that the industry started taking off. It has already grabbed an impressive 4.5 percent share of the media pie in India. If the Government frees FM radio further from its shackles through its phase three policies, one can expect terrific momentum in its growth.

 

In my opinion, the  biggest roadblock for the industry’s progress currently is the most unreasonable restriction on entering newer genres like news and current affairs, live sports etc,  clubbed with issuing of multiple frequencies within a city. If the television industry was given the freedom to operate in these genres inspite of it being visually enabled, why not the FM radio industry?

 

Phase three means a lot to our industry as it’ll considerably improve geographical coverage and reach, and enable content differentiation, to a reasonable extent, thanks to the provision for existing radio players to acquire multiple frequencies in the same city. It will consequently attract more categories of advertisers locally as well as nationally and more importantly, increase the depth of consumption of those advertising already. This in turn should take its share of the ad pie up to 7-8 percent. If they free up the news and current affairs genre, which is considered the second biggest genre on radio, properly, then the share of radio can potentially touch double digits over the next few years.

 

The key word is ‘evangelising’. Industry players need to take up the task of promoting the enormous benefits of this amazing medium in such a manner that advertisers get a more holistic understanding. In India, listeners have lapped up the medium wholeheartedly across age groups. There is a clear case for radio players to pool their precious resources and launch a RAB (Radio Advertising Bureau) kind of initiative in India on the same lines as USA, UK, South Africa, etc to evangelise the medium among advertisers and ensure a substantial share of value in their minds.

 

What advertisers and media agencies have to say:

 

Anwesh Bose

Anwesh Bose, Senior Vice President, DDB MudraMax

The answer lies in the question itself. The argument today is why radio is the poor cousin. The entire eco-system of communication that is advertisers, agencies and the media owners are to blame for the condescending perception regarding the medium in our country. Before we answer the “why” we need to know the ‘what’s.

 

The knowledge gap: most of the ‘professionals’ in the communication eco-system are not aware of the number of radio stations that exist in this country and a handful of them have ever seen a physical copy of the AIR rate card. An interesting fact is that the geographical coverage of radio is higher than that of any medium in this country and very few are aware of it.

 

The information gap: Unlike TV and print, radio has very little data to prove its effectiveness and efficiency. In the times that we live in, most of the communication planners are data clerks; therefore for them radio is nothing but a ‘cheap’ medium that is local and low in reach therefore it is an option not an important component of a media plan.

 

The perception gap: due to the lack of knowledge and information, the perception regarding the medium is dilute. Dilute perceptions lead to misplaced notions. The radio media owners have themselves done a lot of dis-service as well. There is an identity crisis among the radio brands because all of them are busy copying each other, as a result of which everyone is a ‘me-too’. Add to it the fact that it is a medium that has a one-time entry cost and no recurring costs, therefore the complete dependence on advertising revenues for sustenance. Anything that is ‘free’ is not valued.

 

The ‘why’ will remain ‘why’ unless the ‘what’s are rectified. I would like to conclude by saying that it is imperative that the glaring gaps are closed and it is up to the stakeholders to do their bit. It calls for thought leadership – are we up to it?

 

Abdul Khan

Abdul Khan, Senior VP, Tata Teleservices

I think poor cousin is an unfortunate phrase to be used for this medium. The current share of advertising pie that radio gets is about four percent. And, we only have ourselves are to blame for this. The problem is that the mode of distribution (airwaves) has been confused with medium. There exists woeful situation of lack of innovation, programming and talent in this industry. Radio is not in sync with the youth of the country, which is the biggest drawback given that youth is the TG for every other medium.

 

The last remarkable property that one remembers on radio was Binaca Geet Mala. And radio now beams music when there lay enormous possibilities when it comes to programming. There is an enormous opportunity of delivering creativity through audio waves.

 

Radio currently is not offering genuine value. Except for radio forums where issues and solution are discussed, there seems no sense of urgency from within the industry and the ecosystem. Even the discussions do not lead to reforms.

 

Government regulation is not responsible for this situation. Yes, there have been regulations but other mediums also face regulations. What the ecosystem needs to understand is the fact that radio as a medium has enormous possibilities.

 

Vivek Srivastava, Joint MD, Innocean Worldwide

The perception of radio varies according to the advertiser’s profile. For the local advertisers, like retailers and jewellers, radio is a high-performance medium and a primary advertising medium at times. But for national and established advertisers, radio suffers from an image problem.

 

Radio has been traditionally typecast as a low-preference medium. It has been treated as a transit medium, a medium that people listen to while they are driving or travelling. People believe that even with listeners accessing radio through their mobile phones, the listenership is actually percolating down.

 

What is also hampering the growth of the medium is the fact that radio is a victim of current circumstances. There is hardly any money put in when it comes to producing for radio, even when huge budgets are allocated for production in print and television. Yes, we do see flashes of brilliance on this medium as well but it is only far and between. The whole ecosystem is responsible and should act towards making this medium more rich.

 

 

Sanjay Tripathy

Sanjay Tripathy, Executive Vice President-Head Marketing and Direct Channels, HDFC Life

Radio is considered a very topical medium and advertisers can customize messages to geographies and city. While there is a great amount of flexibility that the medium offers but there are certain issues that the medium has:

 

1. There is no channel or programming loyalty by consumers – Consumers listen to songs and not so much to content.

 

2. It is still a medium (in larger cities) which is heard while concentrating on doing something else ie driving, cooking, etc. Therefore it becomes a medium that is on the background and not so much a primary entertainment medium as television.

 

3. Radio Channel software ie Radio Jockeys have not been able to build loyalty with the consumers / listeners.

 

Therefore, radio has become a support media to television or print, and is primarily used as a reminder medium.

 

Radio industry is using qualitative / quantitative researches to convince marketers/advertisers but these are researches done by radio channels independently and marketers do not get a third party verified data.

 

RAM, the measurement system for radio is not considered to be a credible system.
Few of the reasons are:

  • Diary- entry method- whereby a selected person, maintains a diary of radio stations tuned into.
  • Coverage of just 13 cities including 4 metros.
  • Small sample size of 480 is used in metros to measure the effectiveness.

Thus, advertisers and radio industry are concerned about accuracy, authenticity and relevance of RAM’s ratings. In my view, in order to be an efficient system, RAM must have higher sample sizes that are statistically significant, transparency in processes and electronic gathering of data.

 

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