We speak to industry leaders and experts to understand whether the industry has recovered post-COVID and how radio players are reinventing themselves.
The radio ad revenue grew 11% to over Rs 385 crore, as against around Rs 345 crore of 388 private FM stations, for the April to June 2022 quarter. This is as per the Telecom Regulatory Authority of India’s ‘Performance Indicators Report’.
Speaking about how the business has recovered, post-COVID, Ashit Kukian, CEO, Radio City, says the industry has seen a positive consumer sentiment that has led brands to increase their ad spending. He adds that Radio City’s focus is to regain lost ground, and it was able to recover last year, during the festive season.
Nisha Narayanan, director & COO, Red FM & Magic FM, mentions that as compared to the last two years, the AdEx growth this time around, was quite substantial. She adds that there was double-digit growth, especially in Tier-II/III cities, on account of volume upsurge.
“Metro cities, on the other hand, were more fragmented, in terms of ad avenues and budget pressures due to macro socio-political reasons, and inflationary pressures. Therefore, the ad side of the business has yet to adequately pick up in the metros.”
Niti Kumar, COO, Starcom, points out an increase in radio advertising.
“This is probably driven by the fact that people are now out and about, and commuting to work. Radio has always been a good local reminder medium for brands, and it’s good to see interest in the medium pick up. We’re also betting on the digital/streaming feeds of radio channels that have picked up listeners over the last few years.”
Recovery over the last few years
COVID hit the radio industry, like many others, quite hard. According to reports, the industry saw a 27% decline in ad revenues. However, there was a ‘V-shaped’ recovery for the industry by the end of 2021.
In 2022, radio ad volumes grew by 25%, as compared to 2021. The average ad volumes in the fourth quarter of 2022, increased by 18%, as compared to the second quarter, as per a TAM AdEx report. Properties/real estate led among the categories on radio, with 14% share of ad volumes in FY 2022, the report said.
Many FMCG, automobile and real estate brands continue to invest in the medium.
Reinvention of traditional radio
Most leading radio stations have been focusing on reinventing themselves lately due to competition from a number of newer digital mediums like audio ott platforms, podcasts and the good old Youtube.
Kukian says that at its core, Radio City is an advertising solutions company that caters to two audience sets - the listeners and advertisers. It has always been at the forefront of innovation, by delivering customised solutions to clients.
“With the launch of our ‘Radigitalisation’ strategy, we’ve started providing holistic solutions that include radio plus digital offerings, making us a one-stop shop for all brand advertising needs. This approach has been well received by brands and we’ve witnessed decent growth in the ad business so far this year.”
“Digitisation has been the trump card for various industries, including radio. It has made audio content more accessible and increasingly popular among wider audiences, extending beyond traditional mediums," says Narayanan of Red FM.
“As we witness the emergence of new and exciting formats of digital and radio, we continue to co-exist. Radio remains a free-to-air and easily accessible medium, offering on-the-go entertainment options and, by embracing digital trends, we adapt to changing consumer preferences and flourish," she adds.
Kumar of Starcom says that digital adoption has more than doubled for his company’s clients. She says that a combination of radio spots, digital amplification and influencer marketing on social, is a great one.
Despite digitisation, struggle continues
As per Narayanan, the growth of radio players is largely impacted due to competition within the industry on yields. She says within the industry, the price war continues to affect income for most. While on the other hand, competition outside the industry remains to fight for a bigger and better share of the overall ad pie.” she adds.
There was a time when the government used to advertise in various radio stations. It was a major source of revenue for radio players. However, over the last four years, the government advertising has decreased drastically, according to major players.
“For a medium that is as powerful as the radio, it is surprising how its growth has been curbed. There are so many limitations. Despite its ability to have a last-mile approach, assist in natural calamities, etc., the government expenditure remains stagnant,” says Narayanan.
“But we’re quite optimistic. Radio is a powerful medium and, instances like Prime Minister Narendra Modi using the medium to reach out to people across the country, only ensures our faith in both the radio industry and government. As we prepare ourselves for a very significant election year, we’re hopeful that the government will once again bring radio into play and advertising will be back, especially in media dark areas.”
Kukian, on the other hand, points out that post-pandemic, the government has swiftly resumed its ad campaigns.
“The government has continued to invest in various campaigns and initiatives that have provided revenue earning opportunities for radio stations (through advertising). Also, with the general elections coming up in 2024, we can expect more campaigns to pick up on radio."