Contrary to big players, regional radio operators expect slow festive season
Despite advertising picking up after a slow Q1, regional FM players still feel that the lingering effect of GST, RERA, demonetisation will still make its impact felt during the upcoming festive quarter
Published - 21-September-2017
The radio sector, like most other advertising sectors, has suffered during the first half of the year due to the effects of various government policies. Though larger radio networks seem to have their business more or less back on track post July, the scenario is different with regional radio operators.
Some operators we spoke to said that national advertisers are still shying away from spending ad money in the regional space. The general feeling now is that ad revenues for the 2017 festive season will be subdued compared to last year.
“Q1 was really slow for us though the market is slowly improving. The national advertisers have still not become active even for the festive season, so it is mainly local and regional players who are spending. Government spending has also gone down though we expect the next quarter to be better,” said Dilip Duggar, VP at Radio Misty, which operates out of Siliguri and Gangtok.
Sharad Lunia, Founder of Releasemyad.com, an online platform for trading ad spots that specializes in regional and local advertising, was of the opinion that national advertisers prefer to use radio as a part of integrated campaigns especially at a local and regional level due to its forte as a recall medium and since it becomes more cost-effective than running print or TV ads every day. Speaking about his expectations for this year's festive period, Lunia agreed that enthusiasm among advertisers is lower than last year. “There was a lot of spending by the e-commerce category last year due to the huge funding wave, which is not the case this year,” said Lunia.
Tanaya Patnaik, Executive Director at Radio Chokolate 104 FM in Odisha, also told us that the response from advertisers has been muted. “Ad spends have not picked up as much as we expected. Usually by now, our inventories are overflowing but there has only been a modest growth,” she said. According to her, the implementation of GST was a major reason for the slowdown in ad spends.
Meanwhile, the situation is a little different in Goa. Given that the festive season is centred around the month of December, Satyanarayana Murthy, CEO at Radio Indigo, which operates in Goa and Bangalore, told us that interest from local retailers is still muted though larger advertisers have started spending once again. “We have seen a surge of 21 per cent in September over August. Volumes have also gone up, though not spectacularly,” he said, attributing this to corrections in business as brands which haven’t spent in H1 now want to get back in the public eye.
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Radio was expected to be the fastest growing traditional advertising medium in 2016 according to the Pitch Madison Advertising Outlook (PMAO) report; growing at CAGR of 18 per cent. However, the triple whammy that was GST, RERA and demonetization resulted in tightening of purse-strings across the board. In this scenario, it will be interesting to see how the sector eventually performs by the end of the year.