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Strategic sales alliance between FM stations a win-win situation for all

Strategic sales alliance between FM stations a win-win situation for all

Author | Robin Thomas | Thursday, Dec 17,2009 7:27 AM

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Strategic sales alliance between FM stations a win-win situation for all

In the latest turn of events in the FM radio industry in India, Big FM has announced that it has entered into a strategic alliance with Radio Dhamaal and Rangila FM. The alliance is aimed towards expanding its network and also providing advertisers deeper penetration into key markets. Big FM with 45 stations of its own across India through this alliance will further increase its reach and footprint across India through alliances with Radio Dhamaal and Rangila FM, thus allowing Big FM sales team to offer advertisers the opportunity to reach 52 cities across India. Similarly, Radio Dhamaal and Rangila FM are said to get advertisers through Big FM network and reach.

Inter-brand relations are not new in the Indian radio industry, for instance, Radio One is in sales alliance with Radio Misty, which has completed more than a year. Radio City also has a sales alliance with Friends FM. Recently, SFM had rebranded as Red FM, thereby further increasing its reach across India. The rebranding was also aimed at being comprehensive and incorporating the Red FM DNA into all the other stations in programming style, content, format and presentation, and entailing complete re-training of the staff, including the RJs, station heads, sales and marketing teams.

Radio City and Friends FM have completed one successful year with this strategic alliance and is now in the second year of this partnership.

Alliances such as these usually help smaller FM stations reach out to national clients and help understand the national market even better. This apart, larger FM stations are able to further penetrate into the country and thus enable advertisers to reach out to a broader target audience.

In a prepared statement, Tarun Katial, CEO, Big FM, said, “With a fair share of ad-spends flowing into these regions (Maharashtra and Central India), this alliance with Radio Dhamaal and Rangila FM helps us enhance the reach of our offering to advertisers and further consolidates our position vis-à-vis the competition. Having 52 stations enables us to deliver greater value to our advertisers and strengthens our ability to help build their brands across markets.”

Industry speak

Praveen Malhotra, Senior Vice President - Sales, Big FM, observed, “This is a sales deal, but it does not focus on generating revenues alone, the alliance is aimed towards expanding our network and providing advertisers deeper penetration into key markets. Big FM, Radio Dhamaal and Rangila FM… all the three are going to generate huge mileage not only in terms of revenue, but will also enable advertisers to reach out to a broader target audience.”

“With our extended reach, we would be able to tap potential markets and hence increase our revenue share. The deal will also help us to offer a better customised solution and package to our advertisers. Network sales have always been an international trend, we have tried to join hands with Radio Dhamaal and Rangila FM in order to share our networks and reap benefits from our expanse. Also, this deal will help us to prepare for Phase III when newer avenues will open for Indian radio industry,” Malhotra added.

According to Nishant Mittal, CEO, Radio Misty, “Radio One has sales teams in all metros and major cities across country. We can reach media planners and clients through them. This has helped us a lot and we can also reach more national clients. I believe this also has a good impact on revenue as big clients and media planners now go for single sales deal with maximum stations. So, this alliance is very helpful to reach them as well.”

Ashit Kukian, President - Sales, Radio City, observed, “Kolkata is an important market, which was missing in our portfolio. This strategic alliance with Friends FM helps us bridge the gap and also helps us provide advertisers with a complete solution with all the key markets. I believe, this alliance gives us a network advantage with Kolkata, a key city getting included in the offering.”

Sanjeev Kalia, Network Sales Head, BAG Network, said, “We are confident that this tie- up will be beneficial for both the parties. In this competitive scenario, consolidation is the necessity. It is a well thought strategy, which allows the Big FM sales team to package our non-competing stations in their deals to garner better market share and at the same time both teams will handle their sales independently.”

According to SK Jain, MD, Rangila FM, “The strategic alliance with Big FM will usher in a very exciting phase of mutual growth. Rangila FM in Raipur (capital of Chhattisgarh) will benefit from the presence of national brands facilitated by Big FM, whereas advertisers will now be able cover a huge landmass in the most potential state in Eastern India through a single window. Also, the deep penetration in a number of rural clusters under Rangila’s coverage supported by bonding with listeners will open ways for meaningful and effective rural activations.”

Expert speak

Ashish Pherwani, Associate Director, Media & Entertainment, Ernst & Young Pvt Ltd, explained, “The sales alliances are a win-win for both the radio companies involved and advertisers. As different radio networks join together, it enables them to offer advertisers various tactical groups of stations (state-wide, regional, metros, non-metros, etc.), which can be custom selected to match an advertiser’s communication needs, with minimal wastage/ overflow as compared to mass media.”

Pherwani further explained, “For smaller radio networks, attaching themselves to bigger, metro-centric station networks could increase their penetration with advertisers and positively impact sales volumes and rates. Alliances are instrumental in thus increasing the overall spend in the medium, which is much required to give a boost to the recovery phase the radio sector is currently in.”

R Venkata Subramanian, VP, Lintas Media Group, noted, “While such partnership is good for any network, for advertisers it all depends on the potential of the market. We believe radio advertising works better if an activity is done in a particular market, especially a local market, then radio as a medium works better.”

While media planners and advertisers may want maximum reach across the country, what is also interesting is that such strategic alliances are also said to be a mode of cost cutting measures and over a period of time this trend will further continue.

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