Radio One hikes ad rates by 30%

The rate hike comes in the wake of huge demand for on-air inventory in metro markets

BestMediaInfo Bureau | Delhi | April 3, 2013

Radio One that runs international stations in Mumbai and Delhi, premium Hindi Retro stations in Ahmedabad and Kolkata, premium Bollywood stations in Bangalore and Pune, and the only 100 per cent request station in Chennai has decided to increase its advertising rates by 30 per cent.

The rate hike comes in the wake of huge demand for on-air inventory in metro markets. The radio industry has filled up its 'super prime time' way beyond the level of comfort for listeners and advertisers should be worried as a result. The chart below shows the average inventory peak in minutes in every advertising hour among all radio players in the top 7 markets. In brackets is the lowest inventory minutes used in super prime time.

Vineet Singh Hukmani

Vineet Singh Hukmani, Managing Director, Radio One, said, “Given a weakening economic scenario, every advertiser will seek economical media choices, ROI above plain reach. This coupled with the fact that radio commands only 4-5 per cent of the advertisers' budgets, we feel that this is a very small incremental price to pay for the 'superiorly targeted' reach that Radio One provides. We are continuously investing in product engagement to ensure we give the best value to the listeners and therefore the advertiser. No other medium but Radio One targets the 'educated listener' all day long; no other medium but Radio One offers an automatic 95 per cent connect to online audiences at all times. We have added the largest number of clients this year on to Radio One stations across the metros and have delivered great response.”

The rate increase will help create 'preferred clients' in super prime and give them a less cluttered environment. This will help their brands engage and innovate better with 'happier listeners'.  We are looking to have the new rates take full effect from April 15^th 2013.  Our responses with new deals in the last 2 weeks on the improved rates and innovative deliverables are bang on with our expectations.

As the table shows, peak inventory at 25 minutes in super prime, coupled with RJ talk, means that no more than 3-4 songs can play in an hour. This makes the listener tune away and it is certainly not good for the advertiser. Media agencies should understand that pushing inventory only in super prime does not serve any objective. It is better to focus on 'impact led high engagement properties' versus vanilla FCT that only add to clutter, according to Radio One. Also, distribution of inventory 'all day long' is a good strategy as radio is an 'all day long medium' compared to print and TV. Currently, most non-prime inventory is filled with 'junk/free inventory' from the ever increasing off-air activation deals which devalue the radio medium severely. The era of 'using volume' to depict growth or leadership is over. On-air 'yield' is the only measure that will fuel further investment into improved content. We at Radio One have stopped off air activations a year ago.

Hukmani further said, “We have been listening to other radio players also wanting to increase their rates and this is right for the industry which is getting commoditised. Value improvement is a win-win situation for competitive and ROI seeking clients and discerning listeners. Clearly media agencies that have peddled the 'rate decrease-increase volume' approach have seen their radio earnings shrinking year on year, in some cases to the tune of 30 per cent! As a result, they have created nothing memorable for their clients. The converse has also happened with agencies who have grown their radio earnings by focusing on valuable innovations and not just focusing on reduction of prices.”

“A 30 per cent increase in radio rates is easily funded by a 1.5 per cent media budget saving from print and TV spends. This is a small price to pay for superior targeting, engagement and all day long connect. There is an increasing number of 'pure radio clients' who don't use any other media and they gladly pay a premium as long as they get the right value and response. We look forward to inventory reaching healthy levels from the current excessiveness with this measure and super prime time becoming super enjoyable for the listener and advertiser,” Hukmani said.

Info@BestMediaInfo.com

Info@BestMediaInfo.com