2011: Of expanding listenership & underperforming radio biz

Apurva Purohit, CEO, Radio City, points out that the time for the industry to work together is here

e4m by Apurva Purohit
Published: Jan 10, 2012 7:45 AM  | 3 min read
2011: Of expanding listenership & underperforming radio biz

In simpler times, growth was an easy term to explain. Your business in India grew in double digits and if it didn’t, you were classified as a poor performer.

In the last few years, however, the ‘growth’ phenomenon has become increasingly contextual and complicated. Single digit growth is great, but if you grow in double digits, you are an exception and do not define what is happening to the rest of the industry. And, if you don’t grow at all, it’s got nothing to do with you in any case.

In 2011-12, the FM stations that performed well in ratings grew in double digits and the rest remained stagnant or showed marginal results, leading to the overall industry growing in late single digits.

The advertiser categories that showed growth in their own businesses were the ones that performed better in radio spends than the average, for example, media, FMCGs, services and retail. No surprises there. Therefore, a positive sign for the industry has been that leaders in their category spent significantly higher than their counterparts on radio, a very encouraging example to showcase the increasing effectiveness of the medium.

The number of advertisers on the medium increased from approximately 9,000 to around 12,000. Nearly 3,000 new advertisers tried the medium in this year, a good sign!

Phase III of the FM policy finally saw light of the day and hopefully will see the bidding happening soon. It is critical for the industry that FM expands beyond the current 30 per cent geography it covers, otherwise we will continue to mourn the fact that listenership is stagnating, while doing little to push the most critical growth driver of listenership – expansion beyond the current 86 cities where FM is available in, as of now. Phase III will take the reach of FM from the current 46 per cent of the urban population to 71 per cent which is crucial, if we want the medium to be considered a truly national one, else it will continue to get knocked off from the media plan in the first stage of media selection itself.

However, indeed, one of the landmark outcomes of the third phase of the FM policy will be the availability of this cost effective medium to thousands of small businesses and retailers in small town India. These businesses have hitherto not been exposed to FM and can expect access to wider audiences through it in the coming years. It is an important dimension for the expansion of FM and both the government and the media owners need to reflect on the tail winds it can create for these small businesses.

Thus, in summation several positive strokes were given to the industry by advertisers in the last year and a regulatory framework was created for building it further. Now, as an industry, we need to heave a joint shoulder and push the boulder across the finishing line.

(Apurva Purohit is the CEO of Radio City)

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