New questions face radio operators

Everyone knew that radio was a mass medium. So it is not surprising the way the masses have taken to it. According to a recent survey by ORG-Marg, nearly half of radio listeners in the city of Mumbai belonged to the SEC D and E classes. For most stations and media planners, who are waiting for more research, especially the Radio Audience Measurement system, it is an insight that could have major implications in terms of media planning and programming.

One of the fundamental questions that will arise will face the media planner in particular. Will media planners decide to take the traditional way, and throw their weight in favour of SEC ABC, which has more purchasing power? Or, will their perspective change depending on how many SEC D and E households clamber on to the bandwagon? Opinion is divided. If the new medium attracts advertising from traditional sectors like finance, insurance, and automotive, then the focus on SEC ABC will do fine.

What complicates the picture is that in many places, radio advertising is spurred on by local advertising. "Some retail clients, for example, might have an appeal for SEC D," points out Madan Mohan Mohapatra, India Head (TV and Radio Investment) Starcom India. In a city like Bangalore, for example, more than 200 local brands advertise on STAR's Radio City, paying between Rs 1,000 and Rs 3,000 for a 10-second slot. And many of these brands are local retail shops. And, in another indication of the power of local advertising, 80 per cent of advertisers in the Metro editions of Mumbai's popular tabloid Mid-Day are city-specific shops like Parantha House. Overall too, the picture is one of contrasts. While national advertising has been growing at 5 per cent to 7 per cent, local advertising has been growing at around 15 per cent to 20 per cent.

The good news is that radio advertising has been growing, and is expected to grow further. The FICCI has pegged the growth of advertising on radio to rise from its current 1.5 per cent to 2 per cent to 5 per cent in five years. The trend over the past few years indicates the potential of the medium. In 1999, advertising revenue on radio was at Rs 90 crore. In 2000 this went up to Rs 120 crore. In 2001 radio has registered a growth of nearly 27 per cent. However, what is different is the competition that has come to mark the sector. Earlier, point out analysts, radio consumed the advertisers' "left over" cash when the lion's share of the media budget had been spent. Now, in a situation akin to the first days of cable TV in the early nineties, there is ample choice among media planners. The key question, in a sluggish national market, how crucial will local advertising be?

That is a question that might eventually come to dictate programming. "Right now, despite research, media planners are in a sampling mode. They are excited with a new medium that gets out of the monotony of print and TV, and are trying out all the stations. What is important for a radio station will be to increase stickiness, and that will depend on programming," says Mohapatra.

In the battle to come, what such a predominance of SEC D and E could do is dictate the programming content, in much the same way it affected television programming. Currently, radio programming is being driven by two kinds of perceptions - based on a clear demarcation between mass and non-mass stations. The idea? That each will draw its own share of advertisers. In a free-for-all, that comfortable idea will be the first to be tossed out.

Currently, the STAR India-run Radio City and Radio Mirchi from The Times Group reach out to all classes, while the Mid-Day group's Go 92.5 FM and Millennium Broadcasting's Win 94.6 are looking at SEC AB. However, WIN 94.6, which started out with 60 per cent Hindi and 40 per cent international programming mix, has now increased its Hindi content. WIN, with its target group of SEC AB aged 25-plus, is one of those stations that could be badly hit if local advertising decided the fortunes of radio stations. STAR's Radio City has gone in for a predominantly Hindi programming, based on its own research that indicated that this was the preferred language. However, right now, Sumantra Dutta, COO, Radio City, is more interested in creating the market than finetune it. "My take is that it is too early for any pattern to emerge. FM radio, as a category, is hard to build and hard to maintain, and radio stations should come together to collectively build the market, rather than have knee-jerk reactions," he says.

However, at the bottom of the cutthroat competition between the radio stations is simple economics - the idea that being the lead station will attract a chunk of advertising revenue, and create a pecking order that mirrors television. And this has to be done before listeners settle on some sort of hierarchy. While listeners are still in a sampling mode, that is unlikely to last for long. Research by Carat, for example, has indicated that radio channels are creating niche audience for themselves. And, by the time ORG-Marg gets its act together on Radio Audience Measurement, it will be those stations that accurately anticipated their listener's preferences that will be calling the shots. © 2002 agencyfaqs!