Is retail radio-ready again in 2021?
Industry experts discuss the big return of retail brands on radio after an encouraging Q3 following the pandemic lull
Retail brands have been a major amplifier for enhancing radio ad volumes. But due to the slowdown of advertising in 2020 with the retail sector trying to navigate the new pandemic environment, there was a dent in advertising spends. According to TAM, the retail sector on radio plunged by 37% in 2020. It did bounce back and started seeing a revival on radio during the festive season. Experts say it can bring back the desired ad volume growth once the recovery from the organized and unorganized sectors is witnessed. A radio expert shared that SME-Retail took about 45-50% in FY’20 and about 55-60% in FY’21 in the overall pie of radio's ad volumes.
Retail brands are music to radio ad volumes ears
Asheesh Chatterjee, Chief Financial Officer & Chief Business Officer, BIG FM shared, “Owing to its credibility, mass local reach, RJs being trusted voices, and its ability to influence, Radio has become the ideal partner for brands to capitalize on. Retail brands too are leveraging the strengths of the medium for generating greater exposure as well as engagement for their products and services. For the period of September– January, SME-Retail took about 45-50% in FY’20 and about 55-60% in FY’21 in the overall pie of Radio's ad volumes.”
Preeti Nihalani, Chief Revenue Officer, Mirchi remarked, “2020 was an exceptional year; with the extended lockdowns, retail businesses were impacted the most. Retail advertisers, both large multi-outlet chains, as well as single outlets, were impacted as their businesses lay shut for over 4 months. Even after the lockdown was lifted, there were multiple restrictions across different states in the country. This, combined with the general sentiment of the end consumers, led to a tepid response in terms of footfalls at their outlets. Today, however, this is on a rise.”
B.Surendar, COO & Director, Red FM sharing how the retail industry can drive growth for the medium says, “It goes without saying that for a powerful local medium like Radio, retail advertising is of utmost importance. Moreover, a retail industry with its special ability to drive consumer spending across multiple categories tends to trigger the growth of the overall economy. During the first five months of the COVID-19 pandemic, the volumes did go down substantially but the last five months have seen a bounce back from this critical category with the Tier 2 & Tier 3 cities playing a key role.”
Surendar explained further: “Interestingly, a part of the recovery is through a new breed of advertisers who came up during these tough times from various categories like Regional FMCG, Retail Shops, Health Services, Education, and Real Estate. As radio firms were offering attractive schemes to entice advertisers, they seem to have capitalized on the opportunity to build their brand in a less cluttered environment. Some brands even took a CSR route to strengthen their bond and win the trust of their customers.”
The contribution of retail brands ad volumes in the last quarter
Chatterjee sharing his perspective said, “Retail AdEx is growing and we at BIG FM are providing curated solutions to create awareness and drive engagement. Our expansive network of 58 stations reaching the length and breadth of the country and our RJs being local influencers is surely something that retail brands are leveraging to reach out to their consumers. In addition to radio, through our various partnerships and offerings, we have created multiple touchpoints for an immersive experience and engagement. The contribution of the Retail Sector in the last Quarter (Q3 Oct-Nov-Dec FY’21) for the total market was about 55-60%.”
Nihalani pointed out that the recovery of retail volumes on radio is directly dependent on recovery in their business. She shared, “As businesses started recovering in Q3, we saw a lot of our advertisers coming back in the quarter as their businesses started recovering. Belief of advertisers in the core strength of Radio remains intact, whether it’s with big players like Reliance Retail, Malabar Group, Joyalukkas, or the smaller shop owners - they all see strength in radio solving their TOMR issues and helping them engage with their target audience."
Surendar affirmed, “While radio as a medium itself has a strong local focus, we at Red FM network despite being one of the largest networks with nearly 70 stations in India had consciously positioned and built our brand in the national but local space. Hence, retail advertising is the backbone on which our present and future revenues have to be built.”
On a parting note, Surendar concluded by sharing retail brands ad volumes stating, “Categories like Shops, Real Estate, Hospitality, and Health Services contributed around 40% of our total volumes resulting in a sizable jump in their overall share of advertising on radio in the past five months. Include Industrial or MSME’s or Startups, the volume contribution would go up further to 45-47% These categories saw a growth in volumes and value mainly due to a much higher level of activities in the non-metro markets, which were due to various factors including lesser covid impact, migration of professionals to native places to work from home, etc. As far as metros are concerned, we’re hoping for a more complete recovery from both the organized and unorganized retail sectors in the days ahead.”
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