Chief Operating Officer | 17 Jul 2003
"I find a huge gap between what the radio research report says and the ground realities experienced by us. So I would take these research reports with much more than a pinch of salt. Frankly, I haven’t yet started believing in radio research studies."
CVL Srinivas, COO-North & South, Madison Communications is an MBA (XLRI) and B.Tech (BITS Pilani). He has been with Madison Media since 1998. Prior to Madison, he was in HTA Fulcrum and Lintas, Bangalore. In conversation with Akshay Bhatnagar of exchange4media, Srinivas shares his views on private FM radio stations, advertiser expectations from radio as a medium and how radio could be used for brand building.
Q. What is your opinion on the second lease of life for private FM radio in India?
The licensing policy of the government had issues from day one. The kind of bids that were put in, the writing was on the wall that they would not be a viable proposition. But people jumped into it. And today you have radio stations either shutting down or trying to renegotiate the terms of licensing.
Q. What is your perspective of FM radio stations from the planning and buying angle?
For the media buyers, obviously, radio is a very key medium. Especially in a country like India where you have a very heterogeneous market and reaching out to them through a mass vehicle like TV proves very costly. You are forced to take the same channel and programmes irrespective of your target audience. While with a medium like radio, you are able to focus much better because theoretically speaking, at least if you have radio stations that cater to the different types of audiences, you are able to spend less money and reach the same people. Also, radio is a very effective, localized medium, so lot of local advertising could be routed through it. With these kinds of advantages, as a community, we are very eager to see this medium take off. We will be able to do better localized targeting through radio. We will be able to connect with certain segments of consumers much better.
Q. But do you think radio is considered as an important medium for advertising right now?
See, it’s not happening because of the current policy structure. If you have such high license fees, with 3-4 players operating in each city, obviously, every one takes the safest route. They all end up playing the same music, with similar programming to attract higher ad revenue. It is resulting in little differentiation among the stations. So one ends up buying spots across all stations because the audience gets fragmented. All the stations are trying to create an artificial difference through promotions but their soul is the same. Secondly, radio is not fulfilling its role right now. Where is the radio for the youth or for serious listeners of the western music or catering to sports lovers? That’s what radio is all about at the end of the day. If you look at countries like UK or US, radio is very advanced, with various genres existing within radio itself. We have a long way to go. We have the audience, the brands and the advertisers who can support the stations. But again the policies are such that everybody wants to take the safer route and at the end of the day, I think nobody is gaining from it.
Q. How are your clients reacting to radio as a medium for advertising?
I would say their response is pretty lukewarm. The main reason for that could be the ad rates, which again is linked to the licensing fee. Another reason for the unenthusiastic response is, like I said earlier, the non-differentiation in programming which forces an advertiser to take spots across different stations to reach out to the target group.
Q. But some of the researches on radio stations clearly indicate the leadership of one station in the market. Let’s say in Delhi, Radio Mirchi dominates the market on some important parameters as proved in a research done by TNS Mode?
See, I have seen lot of researches done on the radio market. I find a huge gap between what the research report says and the ground realities experienced by us. So I would take these research reports with much more than a pinch of salt. Frankly speaking, I haven’t yet started believing in radio research studies.
Q. Then how do you tackle this problem of finding out which station or which programme works for your client?
Definitely it is a big problem for us. One way is to try and see if it makes sense to be on all the stations. Another approach could be of taking a chance by buying spots on a single station and try to do the response tracking analysis. We are actually in the process of doing this. But frankly it is very difficult to get the advertisers to back this medium fully because of the above two issues.
Q. Coming back to the issues involved, do you think the current ad rates charged by the stations are not justified?
Probably ad rates are justified from the station’s point of view. But I think the ad rates are not justified from the advertiser’s perspective. I’m not saying that stations should not charge these rates but they should give commensurate value also. One of the station quotes three times of what the others are charging and justifies it with some research reports. But as I said earlier, our personal experiences are quite different. Some times the cost of a radio deal in just a single city, on a single station proves double of the advertising cost on some of the niche C&S TV channels, which are giving national coverage. In such cases, it becomes difficult to rationalize the whole radio deal. So the whole situation looks quite chaotic.
Q. So how you are looking at this medium right now?
To put it simply, we use radio for those brands that are local or are available in particular cities only. Such brands have no other option but to use the local media. For them the options are restricted to print, cinema, outdoor and TV. So in cases wherever we find the fit between what the brand is trying to say and the ad campaign is trying to achieve, we recommend radio. In other cases, we won’t do it till the medium gets better and starts offering us more value.
Q. What has been your experience about the radio listeners’ behavior?
See, wherever the private FM radio stations have been launched, there has been an initial euphoria among the radio listening enthusiasts. People buy radio sets, get their car stereos repaired. I have seen this pattern quite prominently in Mumbai and Bangalore, and Delhi recently. But it doesn’t last for very long. It all starts slowing down after 3-6 months. There are markets like Delhi where radio as a medium is inherently very strong. The radio reach in Delhi is far higher than other metros. Interestingly, people had this perception that Mumbai might give a better reception to radio as the travel time there is longer, but Delhi has proved otherwise.