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PMMAO 2012: Radio Outlook: Bleak signals

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The year 2011 ended on a positive note with the introduction of Phase III policy for radio by the government. As per the Pitch Madison Media Advertising Outlook 2012 projections, the radio industry is expected to clock revenues of Rs 948 crore, in the ad-pie worth Rs 28,013 crore. Estimates indicate a growth index of five per cent for the radio industry but the contribution of radio in the ad pie might slip to 3.4 per cent, owing to the base increasing at a far greater rate.

Radio players predict a sine curve for the radio industry in the coming year. Prashant Panday, CEO Radio Mirchi says, “I feel the first half of FY13 could be slow on account of the continuing slow-down. The crucial period to look out for will be the Oct-Dec 2012 quarter. If by then, interest rates have started coming down, inflation is under control and the Rupee has stabilised, economic growth will be back and advertising growth should improve.”

However, players seem gung-ho about the introduction of Phase III. Harrish M Bhatia, CEO, My FM, elaborates, “Introduction of Phase III will take radio industry to an all new level by increasing the reach of the medium. As per our estimates, retail market is expected grow by 25 per cent. Overall, 2012 would be a booming year for radio advertising, as most categories will increase their advertising spends to reach the growing consumers in Tier II and III markets, where all the action is happening.”

Adds Monica Patnaik, Joint Managing Director, Eastern Media Ltd (Radio Choklate) saying, “Declaration of Phase III expansion has opened up prospects for investors to set up radio stations in smaller regions.”

The categories that are predicted to be in the spotlight on radio are online and BFSI. These are the two categories that are predicted to come into the ambit of radio advertising in a big way. Radio offers unique advantage to these categories. Vineet Singh Hukmani, MD, Radio One feels that premium categories and SEC A focussed brands will come in a big way, provided they get a well profiled radio station that caters to educated audiences of around five million people who read English newspapers everyday in Delhi and Mumbai alone.

Panday feels that the Small and Medium Enterprises (SME) sector is showing great buoyancy in experimenting with radio. “Jewellery has also suddenly taken to radio in a big way,” he adds.  At the same time, there are many challenges that are a cause of worry for radio players. The music royalty issue continues to worry FM stations, especially the smaller FM players or those in small towns. Absence of an acceptable radio measurement tool is another challenge that the industry faces.

Panday also feels that a major challenge will be the ability to increase prices as the market sentiment improves. The year promises a lot of action. It remains to be seen how marketers take up the medium and make it a major part of their media mix.

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Jyotsna Sharma

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