Radio | Ad revenues to grow 15%

Radio | Ad revenues to grow 15%
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First Published: Mon, Apr 27 2009. 08 36 PM IST

Updated: Mon, Apr 27 2009. 08 36 PM IST
The market
Advertising spending on radio grew by a whopping 49%, from Rs590 crore in 2007 to Rs880 crore in 2008, and radio’s contribution to the overall advertising expenditure rose from 3% in 2007 to 4% in 2008. The opening of several new markets in 2008 resulted in a growth of 62% for private FM, or frequency modulation, players who contributed Rs590 crore. The resultant increase in reach prompted advertisers to spend more on the medium.
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The players
Currently, there are 238 FM stations from 40 broadcasters across 90 cities. The players with the highest number of operational stations are Big FM, with 44 stations, Radio Mirchi, with 32 stations, Radio City and South Asia FM, with 21 stations each, and My FM, with 17 stations.
The product
Besides plain vanilla advertising spots, radio now offers content integration, brand mentions woven into radio jockey, or RJ, editorial and on-ground activation.
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The audience
The latest Indian Readership Survey, or IRS, puts the reach of all radio in urban India at 24% and that of FM at 20% (IRS is jointly conducted by MRUC and Hansa Research).
The future
The next licensing tender is likely to attract bidding for 700 new FM channels in 237 cities, many not presently served by FM. Bidding is likely to take place only after the general election, so most of these new channels will be operational only from 2010.
This year will still see a revenue growth of about 15%, which would have been a lot higher had it not been for the recession. Some argue that recession favours second-line media such as radio and digital over more established media such as TV and print.
The growth in radio will be primarily driven by:
Increased spending on radio from categories such as telecom, media and FMCG, which now have a more cost-effective option compared to TV and print to reach more markets
Radio being an effective and efficient medium for local advertisements, smaller markets will gain from categories such as retail and education
Six-city coverage by Radio Audience Measurement (from TAM Media Research) plus ad expenditure tracking, thus increasing the credibility of the medium.
Graphics by Ahmed Raza Khan/Mint
METHODOLOGY
The report is based on spending data of marketeers. The data has been analysed by GroupM software METIS that uses ad volume data and then factors in rate discounts based on internal estimates. Live data from group agencies is pooled to arrive at estimates of the actual values realized by media brands.
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First Published: Mon, Apr 27 2009. 08 36 PM IST