Radio poised to attract new advertisers across markets in 2020: Experts
Industry pundits discuss Pitch Madison Advertising Report 2020’s findings on the radio sector
The Pitch Madison Advertising Report was launched last Thursday and was presented by Sam Balsara, Chairman & Managing Director, Madison. Balsara whilst sharing findings of the report said that the Ad market will grow at 10.4 per cent.
The highlights on the Radio Industry from the report recorded that in 2019, radio grew 5.4 per cent, adding Rs 116 crore to Adex. It became a Rs 2,260 crore market and maintained its share of Adex at 3.3 per cent.
In 2020, the radio advertising market is expected to grow by 5 per cent to reach a size of Rs 2,373 crore. In terms of Ad Spends, the year 2017 saw a whopping Rs 1,875 in crores; in 2018, it was Rs 2,144 rupees in crores; and last year again the ad spends spiked up to 2,260 rupees in crores.
The report suggests that in the first half of the year, radio grew at 18 per cent; however, the growth dropped in the second half of the year by 6 per cent due to the economic slowdown of the country.
Nisha Narayanan, Chief Operations Officer and Director, RED FM and Magic FM sharing her insights on the report findings on Radio said, "Yes, the ad buys has grown more than 5 per cent. But the growth is not just FCT driven. The growth is definitely driven through innovations, idea selling, digital, events, and activations. So a combination of all of this put together is where the growth is really going to come. From the mature markets, there has been stagnation and a certain slowdown that has happened. Because of the country's economy and government spending on the medium has been hit majorly. So the growth is really coming from the regional players."
The forecast for 2020, as per the PMAR 2020, is that the radio industry will maintain the same growth rate of 5 per cent that was achieved in 2019. This will take the Radio Adex to Rs 2,373 crore. Along with these non-FCT offerings like branded content, digital communities, streaming of music and traditional events are beginning to contribute substantial sums to the radio adex.
e4m spoke to some radio industry experts on their viewpoints on the report’s findings on the radio market.
According to Abraham Thomas, CEO, BIG FM, last year, Radio was hit by the huge de-growth in the government business (which accounts for about 15 per cent of the business) in H2, impacting the overall growth percentage. Thomas shared, “If you were to exclude the government contribution, radio did reasonably well, given the current economic situation. Even in these tough times, non-metro markets have shown good growth as local advertisers are growing.”
Thomas added, “Radio continues to attract a large number of new advertisers across markets which bode well for the medium. Radio players have created multiple revenue streams including podcasts, digital, 360 degree integrated campaigns, etc. The full impact of which will be seen in the coming years. With impact becoming as important as reach, many advertisers are successfully harnessing the power of Radio to create a big impact. Also, with the correction in the base of government business, we expect next year to be much better than projections.”
A key spokesperson in the Radio Industry remarked, “The report forecast for 2020 shows that many radio channels will shift towards non-FCT offerings like branded content, digital communities, music streaming, etc. This will enhance revenue by 20 per cent. This year, Radio companies will club these services to discover new avenues for branded content. Building communities and focus on the channels’ respective TG will be the key factors."
Priyanka Dhaul, Lead Activations, Radio Mirchi sharing her views on the report findings, commented, “This year, I definitely see an aggressive double-digit growth and this would largely come in from tier 2 and tier 3 markets and also from the markets, which were last time bid for. Radio being hyper-local in nature, becomes the best go-to medium for brands to reach out its audiences in a cost-effective way.”
Dhaul concluded saying, “Radio sellers across the industry have realized that vanilla FCT selling approach is no longer effective hence an endeavour to reinvent the wheel. A potent combination of Radio plus digital plus radio plus on ground should be considered and importance needs to be given to the customer reach. 2020 should be a good year for all of us across the industry.”
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