Radio to gain prominence in e-commerce ad spends in 2015?

E-commerce players have effectively used TV as a lead medium of reach. Can radio play a bigger role?

e4m by Deepa Balasubramanian
Updated: Jan 8, 2015 8:19 AM
Radio to gain prominence in e-commerce ad spends in 2015?

According to a report by Gartner in October 2014, India is the fastest growing e-commerce Market in Asia Pacific. The Indian e-commerce business is expected to reach $6 Billion in 2015, which is a 70 per cent increase over 2014 revenue of $3.5 Billion.

This rapid growth has changed not only the marketing dynamics but also advertising spends for e-commerce also. 2014 was the year when Snapdeals and the Flipkarts of the world spent significantly on advertising whether it is on TV or Radio.  

exchange4media spoke to radio experts to understand if e-commerce spends have picked up on the radio medium?

Ashwin Padmanabhan, Business Head, BIG FM  feels that though it was slow but with successful use of radio by Olx, Quikr, Snapdeal, Paytm, other e-commerce players have also recognised the reach and efficiency of radio. He further added, “In fact it is ideal. 90 per cent of the customers for e-commerce companies are from the top 12 cities and radio has the highest penetration of any medium in these cities. TV has huge spill over and prints cost per contact is at times 7 to 10 times of radio. E-commerce to launch tactical offers every few days and also to respond to competition in matter of hours, radio works beautifully in such a competitive environment. Moreover, E-commerce is like telecom of five to seven years back and telecom used radio very well.”

Reiterating the same thought, Ashit Kukian, President & COO, Radio City said, “There has been a year-on-year growth of around 65 per cent in the advertising revenue in 2014 from the e-commerce players for radio. Radio dovetails their effort to drive volumes through topical sales beautifully. No other medium can offer the reach that radio offers and this is the reason that almost every e-commerce organisation in fact, breaks the radio campaign ahead of any other medium.”

Mahesh Shetty, COO, ENIL said, “Radio actually supports e-commerce like no other medium. A huge chunk of the radio listening is happening on the mobile phone. E commerce business is also moving to the mobile handset. Since radio is primarily a background medium it does not hinder surfing/buying behaviour when a person is online. Offline retail uses radio very effectively to hammer through tactical offers … the same benefit holds true for online retail. Infact most of the high spending e-comm brands i.e. Olx, Quikr, Amazon, Big Basket, Fashion & You, Make My Trip, etc. are regular advertisers on radio. Though what is true is that some of the big e-comm brands have not fully utilized the potential of radio, and their spends on radio can be far better.”

B Surendar, COO, Red/Suryan FM feels that e commerce advertising spends have steadily gone up on radio in recent times. But there is tremendous scope to improve the 'depth of consumption’. If their current radio spends are approximately two per cent of their total budget, it certainly deserves to move up to at least four to five per cent.
He added, “Given the tactical nature of the e-commerce business & the special media-multiplying ability of radio it should definitely get to play a bigger role sooner than later. One has to understand that in the initial stage of their business the e-commerce players had to create brand awareness and recall in a hurry to attract strong investments. The focus on increasing sales was comparatively lesser. This also explains why they had spent a lot more on the visually stronger mass media viz.  print and television. Now that, one by one, the bigger e-commerce players have attracted sufficient funds for operation , their attention is gradually shifting towards ensuring proper 'Return on Investment(ROI)' .

Consequently, there is a  higher emphasis on promotional campaigns and on customizing their offers to suit powerful local and regional markets . This in turn should help mediums like Radio, OOH , regional print & TV  gain higher share of their spends .”

Should radio be a strong lead medium for e-commerce players?

Experts feel that ecommerce campaign creatives should be tailor made to suit radio as a medium and it should not be a mere extension of the television or print creative. Radio players also need to exploit the medium's unique ability to offer synergistic media solutions integrating the on air ideas with a BTL solution and also leverage their special influence on the digital platform to enhance impact for advertisers. Enhanced engagement by the radio players with the e-commerce brands is required, so that marque radio campaigns can be created for them.

Padmanabhan said, “Case studies need to be done and we need to pitch proactively and aggressively for their tactical campaigns. I also believe their media and advertising agencies need to be educated on the use of the medium and the effectiveness.”

Shetty feels that the days of solo media vehicle for brand communication is over. Consumers keep moving from one medium to the other and for any brand campaign (e-commerce or otherwise) to be impactful, it will have to be multi-media.
He added, “One medium can be the lead medium and other medium/s could play the ‘support’ role. Radio can definitely be a strong ‘lead medium’ for e-commerce players. This is primarily because of the core benefits of radio – high reach, city centric, cost effective and compliments online. Currently there is a food delivery e-commerce campaign on radio in Mumbai, their brand presence is only in Mumbai city right now. Radio is the ‘lead medium’ for their current campaign as it makes no sense for them to go on TV for a one city operation. Also Radio works far cost effective vs print. Since online food ordering is a new concept and demands a habit change from the consumer, the benefit has to be hammered across multiple times to finally make the consumer take action… this can be done very effectively on radio.”

Surendar remarked, “It is possible to do radio only campaigns for the e-commerce category if the creative inputs used are powerful enough to exploit the 'visual imagery' effect that is creating a relevant visual image in the mind of the listener using only audio. Exploring the theatre of mind of listeners and creating a brand-specific sonic tune is important for not just 'radio only' campaigns but for any vital marketing campaign on radio.” 

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