It's & #BANNER1 & # official. Radio stations are out to consolidate. Following in the footsteps of My FM and Radio Mirchi, Red FM has announced a hike of 15-25 per cent in its ad rates, which will be effective from October 1.
Commenting on the hike, B Surendar, national sales head, Red FM, says, "A lot has changed in the market in the past one year. The erstwhile perception based market leaders have been toppled and there is greater accountability with the entry of Radio Audience Measurement (RAM)."
He adds, "Red FM, more than any other station, has been driving this change. It is the only brand which has seen an increase in rates, while maintaining its leadership status in market shares. This is more because Red FM offers the most transparent and cost effective radio buying."
Speaking to afaqs!, Abraham Thomas, chief operating officer, Red FM, says, "It makes sense that since we are topping RAM and the advertisers have complete faith in our potential, we raise the value of our brand."
He adds, "Red FM is well known for setting benchmarks when it comes to creative 360 degree solutions for clients, as is proved by our consistently improving advertising shares."
Commenting on the effect that the rate hike will have on advertisers, Surendar says, "We have rationalised our rates. Our advertisers understand the value proposition we offer and come to us because of a proven track record, our leadership in market shares and because of our strength in providing 360 degree communications solutions."
"We haven't raised our rates for the past one and a half years, so we felt that this was the right time to do so," remarks Thomas.
As per the PricewaterhouseCoopers Report 2008, the radio industry is expected to grow at a compounded annual growth rate (CAGR) of 24 per cent over the next five years and reach a size of Rs 1,800 crore by 2012.
Other radio stations are expected to follow soon in hiking ad rates, as the sector has witnessed hectic competition for the past two years, with old players trying to remain in the fray and new ones jostling for space. Since the third round of licensing is yet to be announced, radio operators would like to strengthen their foothold for a strategic push in the next round.