FM radio survey likely to swing small advertisers' preferences

A recent survey and the first-of-its-kind in India - Indian Listenership Track (ILT 2004) - conducted by Media Research Users Council (MRUC) and AC Nielsen ORG Marg has clearly spelt out the winners in the FM sweepstakes in Delhi and Mumbai.

For the record, the Delhi region has seen Radio Mirchi corner the highest spontaneous awareness level with a share of 87 per cent. It is followed by Radio City (71 per cent), and RED FM (34 per cent).

In Mumbai, the top honours have gone to Radio City (68 per cent), Radio Mirchi (64 per cent) and RED FM (24 per cent).

Now, the question is: Will these findings alter the way media planners distribute their advertising kitty?

We spoke to a few FM channels and a couple of media planners. Excerpts:

L S Krishnan, general manager, Maxus: "This survey would not affect the large advertisers who would mainly advertise in the top two and in some cases choose the top three channels. However, it is the advertisers with a limited budget of Rs 3-5 lakh, who would look for a single channel to advertise their products and this report would influence them as they would opt for the top channel in the respective cities."

Nandan Srinath, station director for Delhi Radio Mirchi: "While big advertisers will remain insulated from the findings of this survey, the small budget local advertisers are also unlikely to consult a report like this to advertise on a channel. Instead, word of mouth would influence their decisions more."

Sandeep Tarkas, chief executive, Media Direction: "Thanks to this survey, the toppers among the FM channels might be tempted in charging a premium over their current ad rates. If this happens, small advertisers may move to the third or fourth channel of the city concerned. That way, the survey could have a negative impact on the ad revenue of the FM toppers."

Evidently, most of the respondents feel that the survey's influence will be restricted to the small-time advertiser; the biggies being mostly cut off from its effects.

So, how much does the small advertisers contribute to the total FM ad revenues? According to industry sources, the FM market between Delhi and Mumbai is pegged at about Rs 50 crore, with Delhi contributing Rs 24 crore and Mumbai bringing in the rest. The share of the small advertiser is approximately 12 per cent in Delhi and 9 per cent in Mumbai, which works out to a total of slightly above Rs 5 crore.

In money terms, the amount is not something to write home about, but who knows if a large chunk of this business moves to the third or fourth FM player in the city, surely they won't be the ones to complain.

What's more likely is that the big channels will grow bigger or aspire for a higher rate of growth by flaunting the survey's findings.

Media Direction's Tarkas says: "The findings will be particularly handy to the toppers among the channels, who will use these to bargain for a greater share of the advertising pie."

Srinath of Radio Mirchi says he isn't too much bothered about being number two in Mumbai since every advertiser in today's times opts for multi-city deals and the combination of Mirchi's Delhi and Mumbai figures easily surpasses City's share.

The combined daily listenership for the two cities puts Radio Mirchi at the top with 48.8 lakh listeners, followed by Radio City with 39.31 lakh listeners and RED FM with 12.68 lakhs. The figures are significant because it shows FM channels as a mass media alternative to print and television for advertisers.

Even Anita Nayyar, managing director, Starcom (north and east): "This survey would result in Radio Mirchi getting more advertisement revenues."

There are however other issues with the survey.

Nishchint Chawla, chief operating officer, RED FM says: "We do not agree with the methodologies adopted by MRUC for this study. It does not reveal the listenership base of a particular station; the survey only deals with brand awareness. And as far as the FM radio industry is concerned, listenership is driven by a particular programme and not by the station. As per a survey done by us, two-thirds of the listeners recall the programme but not the channel. For instance, many listeners could recall the Ameen Sayani's popular programme on RED FM but they were not sure of the channel."

Another channel head, on conditions of anonymity, expressed reservations about the methodology of the survey. He feels, while the day-after-recall method holds good for the paid medium, it is not so effective in free-to-air channels. People meters, available in advanced countries, are far more accurate, he says. But to bring those in India would require considerable investment and time. "Till that happens, I guess we have to bear with surveys like this," he adds. © 2004 agencyfaqs!