FICCI-KPMG-Report-13-FRAMES

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The power of a billion: Realizing the Indian dream
“
With radio penetration being as high as 70-80
percent, there is a universal acceptance of
radio as a medium among listeners. However,
advertisers are yet to understand the return on
investment that a medium such as radio offers.
They continue to invest majority of their budget
on heavily cluttered media like TV and print.
“
- Harrish M Bhatia
Chief Executive Officer,
DB Corp Ltd. (Radio Division)
Radio – An integral part of a marketing plan
© 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated
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Though radio has been one of the oldest mediums in
India, its true expansion only took place in 2001 when
the government deregulated the medium and allowed
frequencies to be owned by private players. With the
advent of over 40 players in the medium and its availability
in 86 of the largest cities in the country, there was a
huge focus from the networks to showcase radio’s
attractiveness to the advertiser and equally an interest
from the advertisers to test this medium as part of their
advertising mix.
While initially advertisers used the medium as a support
and an add-on to larger and more traditional media like TV
and print, and a frequency builder to enhance brand recall,
over a period of time they have started realizing that the
true potential of the medium is far greater than just as a
support medium. Radio today has thus started becoming
an integral part of a media plan for the following reasons;
• It is the only medium which is local, live and interactive,
thus advertisers can actually create geographically
localized and segmented communication stimuli for
their customers, use radio to reach out to specific
pockets of audiences and actually get real time
responses to their communication. Advertisers can
use radio to have a two way communication with their
consumers and measure response to their brands
while in the case of traditional media it is usually a one
way and more passive communication.
• The RJs on radio by virtue of the medium’s personalized
nature have a far stronger connection and emotional
engagement with listeners than any other medium’s
spokespeople. As a consequence RJs are very
powerful influencers in the consumers mind and can be
an important source of information dissemination.
• Radio is also very complementary in nature to TV
advertising. In fact research proves that apart from
their own promos, TV channels have found radio ads
as the next significant source of building recall for their
content. In fact a single source data analysis done
by rating companies has shown that radio adds new
audiences to a TV plan beyond a certain budget in a
national plan. If 10 percent of a given TV budget is redeployed
onto radio, the effectiveness of the campaign
in building awareness increases on average by 15
percent
• Because of the complementary nature of the time
when TV and radio are listened to, even on a single
day it is better to use radio during the day and TV in the
evening to build efficiencies in a media plan.
• Radio is also far more cost effective than print at a local
level. It gets advertisers the same reach at 1/3rd the
cost of print in a city.
• Increasingly a radio plus outdoor or radio plus on ground
kind of marketing activation has demonstrated higher
recall than using more passive media like print. Because
of the fact that common people view radio as their
platform and are very comfortable with the medium,
they tend to respond to it far easily. ( eg A recent activity
done by Radio City saw nearly 80000 auditions across
15 cties )
• Radio’s reach at a local level is higher than most other
media except the GEC channels and thus demonstrates
the widespread impact it can have in transmitting the
advertisers’ message to consumers.
With the advent of Phase 3 where FM will become
available across nearly 300 more cities, its reach will only
go up exponentially. As advertisers look beyond the metros
and mini metros for growth, the availability of FM in Tier -2
and 3 towns will provide a cost effective choice to them
to reach out to potential consumers in these cities. More
importantly, it will become available as a local medium to
advertise on for thousands of retailers in these cities who
today have practically no cost effective way of advertising
and reaching out to buyers. Phase 3 is expected to change
the nature of communication in smaller towns as well give
a powerful tool to local businesses to expand and grow.
Apurva Purohit
CEO,
Radio City
Unless otherwise noted, all information included in this column/ article
was provided by the author. The views and opinions expressed herein
are those of the authors and do not necessarily represent the views and
opinions of KPMG in India.