Sanjeev Kotnala: It’s now for Industry to leverage Phase-III auctions

21 Jan,2015

By Sanjeev Kotnala

 

The third round of auction in radio is being seen as gamechanger. I personally fail to understand this euphoria. My faith in radio as a medium is a bit shaken, I am not sure about the situation in metro markets but suspect that it may only be  slightly better.

 

For, here is a media in the non-metros where advertising rates are hugely undervalued. The constant battle on music loyalty fee is yet to find its endnote. Cut-throat promotional deals and exclusivity with movies is not really an example of win-win situation. Listeners do not see a major differentiation among stations. Innovatively proposals from radio are asked as free value adds. The clients have no clue on which is the station he should advertise and associates with and they don’t care. They are willing to work with one that promises lower rates and has decent perception in the market. In this situation, radio brands fail the brand power test in their capability to attract premium.

 

Many big radios brands are strategically eyeing the next round of auction. There is a definite excitement around it. Most radio stations have invested in internally training the talent that they showcase. This talent pool has been unsure about their long-term future. Auction is a breather for them; they are the experts now and may be looking for better returns…

 

The energetic environment loaded with fun, passion and excitement has constantly been under financial pressure. Things are not the same and the experience is worsening with time. This auction may just be what the doctors prescribed for the industry…

 

This financial pressure is primarily due to the low yield realisation for a perishable non-expandable rigid commodity: time. The stations have by now experimented and honed their cost-cutting measures and it will be foolish to expect major saving to help the bottom line.

 

Lack of syndicated and/ or third party studies prevents the sales team in pegging their time and getting better returns. Like creative in other media, RJs and programming teams are also fronting helpless sales teams. Future for listenership data does seem bright; as that is something the industry needs in a hurry. Clients cannot be blamed for not trusting figures from internal researches. In many ways there is a kind of cat-and-mouse game in radio.

 

There is huge ambiguity and disconnect about who is really listening. The few interactions I have had with consumers in Tier-II/ III markets have shaken my faith in radio as a medium. In Ahmedabad, Agra, Dehradun, Jabalpur, Nagpur, Indore Raipur, I have interacted with 15-20 consumers each mostly from SEC B/C. These been highly informal conversations.

 

My probes got me stares which had ‘Which era are you living in’ written all over it. I want radio teams to tell me how wrong am I in believing what I heard.

:: When I have TV to watch, why would I listen to radio?

:: Yes, I do listen some times but only when I am in the kitchen

:: Play music on my MP3 or mobile.

:: When I want to listen, I use my phone and my music collection

:: I do listen while driving but not regularly

:: It does not matter which station – they all play the same song

:: While travelling I link my smartphone to car system, use pen derives or auxiliary cords

 

It is a small subset but collectively they start making sense. Music download (old and new) is the easiest thing to do and almost everyone has his or her own set of song compilations. They may not been on Internet but have songs on their mobile external storage. The cheapest headphones give you decent noise-free sound. The listener listens to song he likes when he wants.

 

So, where, why and who is listening to radio in the Tier-II and III markets? The radio industry needs to help clear  these doubts.

 

I tried countering these arguments with the RJ conversations, SMS and  Whatsapp messages that the stations receives; don’t they demonstrate the level of interaction, involvement and engagement with the medium? I was told to smell the salt. There exist a limited tribe of dedicated listeners, they will call and engage with RJ, answer questions, and use radio as a real stress buster. But is that really consumer your campaigns are searching for …

 

I wish I know what is the profile and size of this real listener tribe.  Yes, the devices that can logically grab the signal and play the music for you has multiplied. My question remains if that really translated into a larger listener base? Till someone answers this question with research, my faith in the medium remains shaken.,,

 

Sanjeev Kotnala is Head Catalyst at Intradia and believes the best way forward for an organisation is to enhance the potential of  internal teams instead of depending on external resources. He is a management- marketing-media consultant and also conducts specialised workshops in the area of ‘Harvesting and Liberating Ideas’ and Innovation.  To contact email netkot@yahoo.com or tweet at s_kotnala visit www.intradia.in  www.sanjeevkotnala.com. The views expressed here are his own.

 

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