"With radio, you can make product and brand-level behavioural changes"
Apurva Purohit, President - Jagran Prakashan and Director - Music Broadcast on how they are working towards changing the perception of radio being just an add-on medium amongst advertisers and planners through its Neilsen report
Despite the recent obstacles of demonetization, GST and then RERA, Jagran Prakashan is extremely optimistic about the future because as of last November, there was an uptake in spending.
Apurva Purohit, President Jagran Prakashan and Director, Music Broadcast, spoke to Exchange4Media about the company’s performance and how they are working to change the perception of radio being just an add-on medium amongst advertisers and planners through a report called Power of Radio conducted by Neilsen India on its behalf.
At what percentage are you looking to end the year at? With March 31 a day away, what is the yearly expectation and over the quarter?
We believe that we will be at around 11 per cent growth in the second half, especially November onwards, showing an uptake of around 15 per cent. The future is bright because we are getting into the pre-election year. We are already ending the year with high spends and the spend level is increasing. As long as the economy supports us, we are quite confident of mid-teen growth next year.
All of the categories are spending, including government, which is at 15 per cent. The rest is at around 9-10 per cent.
With new stations, you are expecting to break-even in October. How much of an uptake are you seeing for growth?
If we are getting mid-teen kind of growths in revenue and our costs are more or less stable now. Our bottom line actually should grow by around 20-30 per cent.
Are you looking at expansion?
No plans to expand under the current Phase III. But, if more and larger cities come in, we will see at that stage.
One looks at expansion when there is no potential for growth. Even now our inventory utilization is around 60 per cent on an average level. So, we have huge headroom for growth.
Ever since China shut down its newsprint manufacturing industries, the cost of newsprint has risen. How has it impacted your newspaper business?
As of now, there is no clarity on how much the price of the newsprint will increase. But it is believed to be around 20-30 per cent. And newsprint itself is around 30 per cent of costs; so, 20-30 per cent on 30 per cent. That’s a reasonably high cost.
How has Jagran performed this year?
Due to demonetization, GST and UP elections, the impact of the base effect was subdued growth for Jagran this year. But post-November, it has been better. Within Jagran, there are specific businesses which are doing well. For example, outdoor, which showed its highest ever growth at 30 per cent. Digital grew at 30 per cent. Activation was okay, some quarters did well and some quarters didn’t. Within Mid-Day; Gujarati Mid-Day did very well. Inext, which is our second paper in the north, did extremely well and grew at 27 per cent. So, I think the new businesses within Jagran have done extraordinarily well.
The flagship paper, Dainik Jagran, hasn’t done that well but then its base is also very huge. We are expecting better numbers this year.
What is the status of the radio measurement?
It’s going to be another few months before they release that. Right now, only the commercial conversations are going on.
When it comes to the report ‘Power of Radio’ conducted in association with Nielsen, what prompted you to undertake that?
With such a scale of disruption taking place in the media industry, change in the consumption pattern and digital is coming up in a big way. The question being asked was, ‘does radio still have a life in this digital age?’ As a traditional medium itself, it’s competing with all other things specifically on the streaming devices. Also, there has been no large-scale industry study done on the radio for many years. We have had RAM, etc., but RAM has been more in terms of rankings and ratings. So, we thought about doing an industry-specific study because as evangelists of the medium, we believe that we don’t need to sell Radio City. If we sell radio, that is good enough.
Anything that caught you by surprise?
What I found surprising was clearly the fact that people want to listen to a lot of non-music content like local news, information, social issues and live news. I had always believed that the primary reason to switch on the radio is music.
The other surprise was the high credibility of the medium. Now, people are realizing that RJs are becoming strong influencers. They are able to make an impact on a person’s life. If you talk about a pothole, the MLA gets involved. If you talk about giving a polio drop, the mother takes the child for a polio drop. This was a pleasant surprise to me.
What can the advertisers and media planners take from this study?
Radio as a medium is able to impact and change consumer behaviour. So, if it is able to do that on a social basis, then how much more effective it can be to make a behavioural change from the brand perspective also? So, actually, you can make product and brand-level behavioural changes using this medium. I think that’s the single-most important thing an advertiser should take out of this.
In a scenario where multimedia-selling is the way forward, where is radio stuck? What can be done to increase its share in the overall ad-spends pie?
It’s actually stuck at 4 per cent. Ideally, it should move to 8-10 per cent. Why is radio stuck? That’s where we need to do these kinds of research studies to change the way of thinking. Where is it stuck at? It is stuck at that low level of reach because it’s available only in 30 per cent of the country. Then how much money can an advertiser put behind it? But, just because it’s available only to 30 per cent within a city, the reach is not 30 per cent. So, people are confusing geographical reach with its depth. In a city, it’s 60-70 per cent. People need to look at it like that.
And people have always used radio unfairly by thinking of it as an add-on medium, frequency builder and reminder medium of TV and print. This research is clearly proving to you that radio can be the primary medium to impact change. If you want your consumer to change, radio can work very well because it’s trustworthy and credible. An RJ being your friend is now an influencer. Your likelihood of believing your RJ is far higher than a voice of God coming on television.
Do you expect the advertisers to rope in your RJs? You can amp that up also.
Yes, we should. But, I think we should also be cognizant of not using them too much because that whole credibility and influencer bit should not get eroded. If we start using them as salesmen, it will get diluted. So, it’s a very fine balance.
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