The revival of growth post the pandemic has been largely driven by tier markets, rather than the metros, says Abraham Thomas, CEO, Reliance Broadcast Network. Gujarat and Maharashtra have been the top two states in advertising on radio, he shared during an interaction with exchange4media.

Thomas also spoke extensively on the recent recommendations from TRAI, the auction of FM radio stations, the company’s growth strategies and support from the government.

Excerpts:

The government is planning a fresh auction of FM radio stations to take it to tier 2 and 3 cities. How will it impact the market expansion of FM radios? Also, do we expect Big FM to participate in the upcoming auctions?

One of the trends that emerged following COVID-19 has been the increasing penetration of radios into tier two, three and four markets. The growth revival has been largely driven by these cities, rather than metropolitan areas. Gujarat and Maharashtra have been the top two states with the highest levels of advertising. Cities like Indore, Nagpur, Jaipur and Surat are also growing rapidly due to the expansion of categories such as real estate, education and retail. Meanwhile, national advertisers are also beginning to use radio. We often receive 20 different creatives from a single client because we operate in so many states, each with its unique strategy.

Radio is a powerful tool for achieving live and local reach. Although there may be some implementation issues, such as minimum flow price, I am optimistic that the next round of auctions will be able to increase radio penetration even further. Also, since nothing has been announced so far, it’s too early to comment on whether we are participating or not. But clearly, radio is the medium, and local is where the action is. We are seeing the old revival of radio in tier 2 and tier 3 markets.

As per the TRAI recommendation report, the duration of advertisements on community radio stations should be increased from seven minutes to twelve minutes per hour. Will this have any significant impact on the radio advertising business?

Certainly, community radio holds significant importance for society and many such stations are effectively fulfilling this role. However, numerous restrictions in place limit their ability to generate revenue, making it difficult for commercial radio stations to capitalise on the audience. Despite this, there is potential to expand their reach, even into terrestrial and FM radio. While there are many opportunities for collaboration and synergy, the primary obstacle is monetisation, as it is not the main objective of these community stations. We have discussed potential solutions with some players, including the possibility of monetising their audiences and amplifying their content to a larger area.

Would you prefer the government to be a major stakeholder in the broadcasting market?

The government has kind of reduced its spending on radio, but there are a lot of other categories that are growing – services, real estate, FMCG, automobile, banking and financial sectors. They are very heavy spenders on the radio. Secondly, the growth of digital consumption post-Covid gave a lot of impetus. We're also realising that radio and digital are the new normal. So, we make sure that our content is now available across multiple touchpoints. We have partnerships with five different platforms where our content can be played.

Radio is now that local mass-range medium, which can create an impact and bring about a change. Again, the narrative of influencer marketing is growing and they are becoming critical in terms of driving communication. Radio plus digital is a big area for us.

One of the major constraints is music rights, which we only have for FM transmission, and that requires some amount of work so that we are also able to offer a live radio on the main FM radio through a digital medium. So, I think that's an area where we'll be working to try and see if we expand the reach. Also, a lot of it is getting addressed by the government and we are optimistic that by the time you're ready for the next round of auctions a lot of the earlier bottlenecks will be cleared. We’re on our way to having a much better, more robust kind of industry.

How much revenue does Big FM generate from brand advertisements quarterly and which brands are likely to participate in the coming years?

We certainly see some categories doing exceptionally well on local reach mediums like radio. We've seen certain markets that are doing good and growing fast. There has been a change in the kind of advertisers pre and post Covid. This year, we think we will cross the pre-COVID revenue. The ad volumes have grown too.

Real estate, FMCG and retail continue to be big categories for radio. So have been education, banking and financial services. They have been traditionally extremely strong on radio and we can see them growing. eCommerce is also now beginning to spend substantially higher revenues on radio and so these will continue to be the main advertising categories.

What strategies does Big FM have to grow the company in the coming years?

We are driven to build on two things. The first one is business excellence. We want to be the best in class – in terms of the number of brands advertising, the market share of the business, the cost optimization.

The second pillar is innovation. Because there's so much disruption happening. We want to continuously keep raising the bar on innovation, and we will be the most innovative company because we're able to then offer innovative solutions to advertisers.

We were the first to do a metaverse event. We did BIG FM Super Duper Dhamaka with Govinda as the face. With such innovations, we have continuously pushed the bar.