Why did regional radio ad volumes see upsurge during lockdown?

Radio industry leaders opine that revival of economic activities in smaller and medium-sized markets post unlock was one of the major reasons for the growth

e4m by Noel Dsouza
Published: Feb 17, 2021 8:28 AM  | 6 min read
regional radio ad volumes

During the lockdown months, the regional areas saw higher ad volume rates as opposed to the metro cities. According to the recent TAM AdEx India’s Mirroring Y 2020 for Radio Advertising report, the cities that accounted for high ad volume rates were Indore and Jaipur on top positions amongst 18 cities. The state of Gujarat recorded a 19% share of Ad volumes. But will this trend continue or have metro cities found their footing in ad revenue?

e4m spoke to Radio Industry leaders to understand the growing trend of regional areas receiving more ad volumes and the outlook of ad volumes in metro areas going forward.

Will the appeal of regional players earning more ad volume sustain?
Nisha Narayanan, Director and COO, Red FM and Magic FM stated that we have seen that the economic activities post unlock started to pick up in smaller and medium-sized markets.

Nisha Narayanan

Narayanan pointed out some of the reasons for the upsurge:

1. Local suppliers, manufacturers and marketers saw it as a good opportunity to market their brands due to good offers being given by most radio players, and their products were consumed more due to gaps in supply from bigger players.

2. Some regional brands also saw it as an opportunity to advertise more as breaks were clutter-free and media consumption especially in these cities was growing.
Due to the migration from the metro to smaller cities, the overall demand picked up for goods and consumables in these markets in comparison to Metro cities.

3. In categories like FMCG, Retail, Health services BFSI and local govt, ad volumes did better than what these categories did in most metro and mini-metros.

4. The impact of downsizing on categories like Education, Real Estate, Auto was also less in smaller cities in comparison to metro markets. As a result, metro cities were not low on volumes and the yield realization also improved once the festival spending started.

Asheesh Chatterjee, Chief Financial Officer & Chief Business Officer, BIG FM, sharing his perspective, said, “Tier 2-3 markets have witnessed a rapid revival and these emerging markets are leading the recovery. We believe that regional players will continue to garner more ad volumes going forward. With the staggered opening up of different geographies, local reach, local insights, local influencers, and digital amplification is playing a critical role in stimulating demand and enabling us back in the business. Categories like FMCG, Healthcare and Education are using local reach to amplify the launch of their products. Tier 2 & Tier 3 markets are expected to reach pre-COVID numbers in the next few months, largely on the back of higher brand count and reach.”

Asheesh Chatterjee

As per the recent TAM Adex Report, four regional states out of the top five states accounted for 61% of total ad volumes. These areas include Indore, Jaipur, Nagpur and Ahmedabad.

Chatterjee remarked, “Radio enables brands to reach out to the length and breadth of the country due to its expansive network. Given that safety and reassurance are what a lot of brands want to align with, radio with its hyperlocal mass reach, high level of trust, credibility, and RJs as influencers, is a perfect fit. Radio's surge in listenership during the lockdown also resulted in brands leveraging the strength of the medium to the optimum.”

Preeti Nihalani

Speaking from her channel’s Quarter filings, Preeti Nihalani, Chief Revenue Officer, Mirchi explained, “When the pandemic hit, each city was impacted differently; every state had a different rule. On a city level, brands used different strategies and different communications, a trend that continued even after the lockdown was lifted, as various cities recovered at different rates. Mirchi has a strong regional presence on the back of its 73-station network. In Q3, our advertising volumes were up 15% over the same given period last year. All the growth was largely driven by tier 2 and tier 3 markets. Consumers in Tier II, III cities are more upbeat about spending as compared to consumers in Tier I markets, leading advertisers to focus more on non-metros in this recovery phase."

Naveen Sreenivasan

Speaking from a regional radio brand’s perspective, Naveen Sreenivasan, Head Media Solutions, TRD (Television, Radio, Digital) Mathrubhumi Group says, “Club FM knows the pulse of our listeners and understands the cultural and social nuances and differences even among the six stations that we run in Kerala. During the lockdown period, we strengthened our connection with Malayalees and saw tremendous engagement across stations. The brands and advertisers leveraged this strength of the medium generating greater exposure and engagement for their products. Going forward, the trend is likely to continue, and we are also ramping up engagement with our listeners. For instance, we have launched ClubFM Cinemakatha, were collaborating with top Malayalam Movie directors, we are crowdsourcing and creating Radio Movies with our Listeners.”

Will metro cities' ad volumes come back on top positions in 2021?
Nisha Narayanan, Director and COO, Red FM and Magic FM, talking about the current status of metro markets shared, “Metro’s are coming back now with almost 70-80% of LY level but more damage has been done on yields, which requires a long term recovery process. With more channels than tier 2,3,4; Metros and mini-metros will take a while to up the yield as they are linked with demand and supply. Only when we are back to excess demand, we can seek rate correction. Till then it’s going to be a challenge.”

According to Aircheck: The Industry has shown a stable consumption in both Metro and Non-Metro Markets with 36% consumption in FY20 and an estimated 33% consumption predicted for FY 21 for the Metro category. On the other hand, the Non-Metro category witnessed a 64% consumption in FY20 and is expected to increase to 67% in FY 21.

Chatterjee stated, “Metro markets are looking at audio digital solutions that enable them to reach out to their audiences via multiple touchpoints. We as a brand, at BIG FM, have expanded into a larger audio entertainment entity. After the launch of our web radio platform BRO (Big Radio Online) last year, we are looking at strategically advancing into a myriad of digital-led solutions that will help us to present an immersive experience and also a deeper level of engagement for all stakeholders. This will surely lead to greater traction amongst the Metro cities in the months to come.”

Sreenivasan likewise has witnessed the improvement in volumes from the metro markets as well. He concluded by saying, “Our radio brand Club FM was recently revamped, with a brand new logo and innovative, live, interactive content; and the same has resonated with advertisers, both regional and national.”

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