What’s an ad inviting young people to work for a business process outsourcing (BPO) company doing on a new FM radio station? The same that ads for initial public offerings (IPOs), mobile phones, and retail banking are increasingly doing on FM radio stations across the country—looking for customers.
Over the past 18 months, BPO firm WNS Global Service Pvt. Ltd has used “radio sporadically” to “reach college students through afternoon and late-night programming” to “create brand awareness” according to Smita Gaikwad, director, corporate communications and marketing, at the company.
Radio’s resurgence in India is evident in the number of firms launching radio stations. By the end of this year, India will have over 245 FM stations, 100 community radio stations, and a satellite service, WorldSpace, that offers a clutch of channels—several of these stations are already operational.
The medium’s revival is also reflected in its re-emergence as an advertising option. The amount spent by advertisers on radio has more than doubled, from Rs220 crore in 2004 to over Rs500 crore in 2006. According to a report by audit firm Pricewaterhouse Coopers Pvt. Ltd, the size of the Indian radio industry is likely to touch Rs1,700 crore by 2011, with advertising accounting for almost all of it.
That ad spend still pales when compared with television (ad revenue of Rs6617.8 crore in 2006, according ADEX India, a division of TAM Media Research Pvt. Ltd) and print (Rs7,856.6 crore in 2006). But according to advertisers and radio executives, the medium has several things going for it: cost, the ability to customize messages, and the lack of clutter. “The clutter is far less in radio and chances of reaching the target consumer are much, much higher,” said S. Keerthivasan, business head-radio, Fever 104FM, a radio station run by HT Media Ltd (the firm also publishes Mint).
Armed with propositions such as these, radio executives are trying to sell the medium to advertisers.
At a recent seminar on IPO rating (markets regulator Sebi announced last month that all IPOs would have to be rated), Naveen Chandra, senior vice-president and national sales head, Entertainment Network (India) Ltd, which runs Radio Mirchi, an FM station, was a surprise speaker. He was there, he said, because his customers or potential customers were. “Banking and finance is the single-largest category of advertisers on Radio Mirchi today,” said Chandra.
That’s a new trend: Television channels, consumer product firms, and retail chains used to be the major advertisers on radio some time back.
“Most investments in IPOs and mutual funds originate out of cities in Gujarat, Maharashtra, a few states down South, and from Delhi. With radio, these companies can tap into the right market, and customize messages right down to the local dialect,” said a senior executive at a radio station who did not wish to be named.
Suzlon Energy Ltd picked radio to advertise its IPO in September 2005. “Our objective was to create a high recall for our brand. Suzlon was an unknown entity. Of all the mediums we used, radio contributed substantially towards achieving that target,” said a Suzlon spokesperson. Low-cost airline Air Deccan said it had a similar experience with radio for a 2006 IPO. “With print we weren’t sure how many people were actually reading the ads, but with radio, you can’t shut out the sound,” said Mohan Kumar, who was CFO, Air Deccan, at the time of the IPO. Kumar is now a consultant with the airline.
Rising salaries, the growing number of financial products, and longer commutes have worked to radio’s advantage, said an expert. “There are many financial products in the market and it is extremely imperative for banks and financial institutions to reach their target audience. Radio is a great medium, as people who watch television also listen to the radio, especially while driving to work and back. Of course, this is over and above the fact that radio is a low-cost medium with a high multiplier effect,” said Sunil Kumar, managing director, Big River Radio (India) Pvt Ltd, a consulting firm that specializes in setting up and managing radio stations.
Advertisers find radio a less-expensive and more cost-effective medium than either print or television. A 10-second spot on an FM station could cost an advertiser Rs2,000-5,000. On a television channel, a 10-second spot costs between Rs30,000 and Rs3 lakh. “For the amount you pay to get a one-fourth page ad in a daily newspaper, an advertiser can buy 6-8 radio spots a day, for two whole weeks on all seven radio stations in Mumbai,” said Abraham Thomas, COO, Digital Radio (Mumbai) Broadcasting Ltd, which owns Red FM 93.5.
The medium’s relative cost is a big draw with advertisers, even those who would have otherwise advertised on it for other reasons. “(Radio) helps create brand awareness and also draws attention to new developments such as the launch of a new branch or scheme,” said Tina Singh, head (corporate brand), ICICI Bank, India’s largest private sector bank. “The good thing is that the return on investment is competitive (when compared) with other media such as television,” she added.
Just like ICICI Bank said it could use radio ads to announce the launch of a new branch in a city, other advertisers are discovering that the medium can be used for messages that are sharply focused on one region. “Not only does it (radio) offer scale in terms of a wide geographical presence, but it also allows advertisers to tweak their messages to suit a local audience,” said Tarun Katial, COO, Big 92.7 FM, part of the Anil D Ambani Group. Nokia India Pvt. Ltd advertised its low-cost phones on Mumbai’s Big 92.7 station, Katial added, and in Marathi. The cost of adapting a radio ad in another language is cheaper than what it takes to dub a television ad, he said.
Nokia’s rival Motorola India Pvt Ltd recently used ads on Red FM’s Delhi station to drive traffic to its new stores in the city in a retail-trade oriented promotion. “At one level, we use radio to reach a specific audience, such as college students who are the target group for our radio-enabled handsets. And at another level, we reach local consumers,” said Lloyd Mathias, director, marketing (South-West Asia), Motorola Pvt Ltd.
Radio stations are responding to advertisers by showing their willingness to adapt content around advertising and create new properties. “You can better integrate the content in radio. In TV and print, there’s a strict line demarcating what can be done and what can’t,” said Thomas of Digital Radio. The company has an in-house team, the Creative Solution Group, that seeks to find new ways to exploit the medium and attract new advertisers. One of its rivals, Music Broadcast Pvt Ltd, which runs Radio City 91.1 FM, has appointed OgilvyOne, a unit of advertising firm Ogilvy & Mather Pvt Ltd, to suggest “below-the-line” initiatives to rope in advertisers. Last year, Red FM organized an all-woman car rally, Red Activation, to increase awareness of breast cancer and roped in sponsors and advertisers such as L’Oreal India Pvt. Ltd, Kotak Mahindra Bank Ltd, Indian Oil Corporation Ltd and Mahindra & Mahindra Pvt. Ltd.
“Advertising on radio is no longer driven just by commercial time. The thinking is getting more out of the box,” said Nisha Narayanan, project head, 93.5 S FM, part of the Sun TV Network which runs 45 FM stations around the country. 93.5 S’s own “out of the box” idea is Meri Shaadi Kara Do, a show where a radio jockey discusses match-making, weddings, relationships and fashion, which attracts non-traditional advertisers such as wedding planners, caterers, and matrimonial portals such as BharatMatrimony.com.