Campaign India Team
Jan 29, 2009

Is the slowdown an opportunity for FM radio ?

Because of the ability to add activation with ease, and because of the localisation, it might be, finds Campaign India.The times are tough and there is no denying it.  As the economy goes into a slow-down mode, the most astute of spenders are taking the wait-and-watch stance. That said, marketers are also aware of the perils of being completely out of their consumer’s sight. No one would want to risk dropping out of their consumer’s shopping-basket on account of the brand’s suddenly-ephemeral value.

Is the slowdown an opportunity for FM radio ?

Because of the ability to add activation with ease, and because of the localisation, it might be, finds Campaign India.

The times are tough and there is no denying it.  As the economy goes into a slow-down mode, the most astute of spenders are taking the wait-and-watch stance. That said, marketers are also aware of the perils of being completely out of their consumer’s sight. No one would want to risk dropping out of their consumer’s shopping-basket on account of the brand’s suddenly-ephemeral value.

Advertising must go on. It could, however, get more cost-effective, micro-targeted and localised. And which other medium can do it better than, the hitherto neglected, “radio”. Says S Keerthivasan, business head, Fever 104 FM, “Radio has tremendous reach and coverage, is available 24/7 and is a low cost vehicle to reach consumers. It has the lowest CPT (cost per thousand), and is three-fifth as effective as TV in increasing salience at one-seventh the cost. We are confident that the industry will come out stronger from this downturn and continue to be the most cost effective medium for reaching the masses.”

It is an opportunity radio players should not let go. Advertisers are cutting down on lavish spends on TV and are looking to spread their media spends to get the maximum ‘bang for their buck’. Radio has the opportunity to  shed its ‘tactical positioning’. The medium can reposition itself, re-create its unique marketing proposition, and emerge as an essential brand builder.

“Most advertisers have a common refrain these days: Get me a response! To stimulate consumer response, radio can offer an “Integrated Communication Platform” to advertisers that combines on-air delivery with on-ground activation, website bundling, interactive blogs/virals. Since most radio players have reasonably well-developed digital platforms, they are ideally placed to leverage these competencies,” says Vidhu Sagar, GM, N&E, Carat India.And then there is the cost factor. “From an advertiser’s perspective, Radio’s CPT is around Rs 331 as compared to the CPT of print which stands at Rs 1,176. We are already seeing a change in the way advertisers perceive this medium and this is because radio is emerging as the more cost effective alternative, with a mass local reach,” adds AbrahamThomas, COO, Red FM.

Efficient pricing is the key competitive edge that radio must leverage while converting new advertisers. About 60% of print advertisers are still non-radio users and they can be targeted pointedly. It may also be a clever move to lock in long term deals, even at slightly lower rates, at a time when marketer is looking for a medium that delivers mass audience reach without making a hole in their not so deep pockets.

It will help the radio players to exploit the fledgling mobile-radio listener segment with value-added content delivery through telecom operators. “Present radio as the best targeted medium for different audience groups e.g. with about 85% penetration and 80% plus in-home listenership, it’s an ideal medium to support TV campaigns of afternoon-band advertisers addressing the modern housewife. Similarly, for the “perceptually significant” urbane, cultured, affluent, driving audience, radio is an effective conduit of messaging,” says Divya Gururaj, MD, Mediacom.

Downturn is also the time when people are usually in the ‘listening mode’. It would be, thus, helpful for the stations to club together and sell the medium’s strength “Evangelizing the medium remains a core focus area for AROI in 2009. We plan to further build on this campaign by taking it across various other media. There will also be other initiatives to endear radio to advertisers and the media fraternity at large,” says Purohit.



Abraham Thomas, COO, Red FM
“Radio’s competency lies in being ‘local’ and ‘live’ and is much more innovative and flexible. In times of impending global economic downturn and  meltdown radio is already competing with other local media such as print and outdoor and is proving to be a more cost effective medium for local / retail advertisers looking at a mass local reach. We foresee an increase in preference for BTL activities and radio is more suited for integration with  BTL advertising therefore leading to increased demand for radio advertising. Our plan is to cut costs, build operational efficiencies and  justify radio’s value proposition to the advertisers.”



Apurva Purohit, CEO, Radio City 91.1FM
“I see the economic slowdown as a tremendous opportunity for radio. With a tightening of marketing budgets, clients will increasingly focus on their high value markets to maximize returns. Micro marketing can only be done with the effective use of targeted and localized media vehicles .Thus radio as a medium is ideally positioned to provide high ROI to these clients in days of financial pressure.
Contrary to popular belief, radio is far more effective than print for local impact. It not only reaches out to more people than print but it is also far more cost effective with a far-lesser CPT (cost per thousand). Thus, this is certainly an opportunity for radio in India.”
 


Harrish M Bhatia, COO, My FM 94.3
“Radio’s power lies in its ability to be leveraged as an ‘Integrated Communication’ medium. It offers multiple touch points for consumer, including on air and on ground, helping optimize the ad spends and maximizing the impact on the desired target audience. Many cross promotional activities are possible through radio which help reduce ad spends and yet maximize the impact. Radio advertising rates are low on cost-per-thousand basis as compared to other media. It also yields a much better Return on Investment and advertisers agree that there is significant impact of radio advertising on the sales of the products.”



Divya Gururaj, MD, Mediacom
“Radio’s USP is localisation and this will be an advantage as advertising becomes more targeted during recession. However, the challenge for radio will be to better the CPT of television if it truly hopes to achieve a significant share of advertiser wallet. Also, as advertisers cut back on production of TV commercials, radio stations have an opportunity to do quick brand-program integrations and even create radio commercials.”
 


Vidhu Sagar, GM, N&E, Carat India
“Radio comes across as quite a worthy medium in times of downturn as it offers large numbers with less outlays, proving fairly cost-efficient and has a great multiplier effect - particularly when used intelligently in sync with television. Admittedly, it’s relatively weak in terms of impact as also quite limited in its content offering currently, but going forward, hopefully things should change for the better. Gradual introduction of news content on Private FM channels, greater differentiation possibilities and a higher engagement quotient with the audience should make it a meatier proposition with marketers.”
 

Source:
Campaign India

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