The radio industry is optimistic about generating 35-40% of its annual revenue during the current festive season. This year, the industry's enthusiasm is particularly high due to the concurrent cricket season and the approaching Assembly and general elections, which are anticipated to contribute significantly to their earnings.
As the festive season coincides with the cricket World Cup, radio broadcasters anticipate a rise in consumer demand and increased spending across various sectors, leading to a boost in advertising expenditure (adex).
Nisha Narayanan, Director and COO of Red FM and Magic FM, believes that for the radio industry, the festive season has always been something to look forward to as many brands use the medium's broad reach to communicate with their target audience.
“Within these few festive months radio can generate a considerable amount of revenue about 35-40% of its business,” she added.
Abraham Thomas, CEO, RBNL, told BestMediaInfo.com that the company’s radio channel experiences a substantial uptick during the festive season, accounting for approximately 40% of our annual business during these four months.
He commented, “We remain fairly optimistic about the festive season which is poised to give a positive boost to radio advertising expenditure this year. Given that radio has had an encouraging first five months of this fiscal year, we anticipate a significant uptick in consumer sector spending over the next four months. This year, with the festive season coinciding with the cricket World Cup, we expect an increased demand and higher consumer spending across various categories, thus triggering a surge in advertising expenditure.”
Ashit Kukian, CEO, Radio City said that the festive season significantly impacts their radio channel's annual business, contributing a substantial share of approximately 26-28%. During this time, enhanced consumer engagement and increased advertising investments create a favourable environment for their radio channel’s business growth.
Kukian added, “As we enter the festive season, the second half of 2023 is forecasted to see a rise in advertising spending. This optimistic forecast is supported by TAM's sector report, which projected a 25% increase in advertising volume in 2022. The TRAI report for the September 2022 quarter also indicated that radio advertising revenue increased by 11%. This showcases the sector’s scope for further growth this year.”
Even after ad inventories will be at full capacity across radio platforms during the festive season, Red FM’s Narayanan cautions not to put off listeners with too many ads and brand integrations.
She said, “As the festive season is here, one may observe that most of our cities' inventories are at full capacity. While most are becoming blind from the quantity of advertisements they are playing, we are raising the inventory very cautiously, while keeping in mind the interests of our listeners, product safety and the long-term interests of our sponsors.”
She further said, “During this festive season, when advertisers are back in full force and the attention of listeners will only give them the desired response and faith in the medium, we don't want listeners to tune out. Not only are the festivals expected to produce a spike in advertising but also the upcoming cricket season and general elections.”
Efforts aimed at bringing advertisers back to pre-covid rates
Thomas emphasised that the approach to coaxing advertisers back to pre-COVID ad rates revolves around delivering value that transcends mere discounts.
“The festive season encourages advertisers to boost their spending by leveraging the holiday spirit and tapping into consumer sentiment for better engagement and conversion rates. Collaborating with all channel partners to fine-tune rate correction strategies is pivotal, ensuring that advertising rates are in sync with the current market dynamics. We are also proactively presenting premium services, which helps streamline rates across various advertisers and regions, offering them sponsorship opportunities and the creation of branded content for enhanced visibility and engagement,” Thomas said.
He went on to say that their integrated advertising packages spanning radio, digital and other media channels are designed to maximise campaign impact. Moreover, optimising prime time slots during high listenership periods adds to revenue maximisation. These concerted efforts aim to create an environment where advertisers perceive value in their investments, while also contributing to the overall industry recovery, synergising with the festive season.
Meanwhile, Narayanan said that Red FM’s objective is to capitalise on a comprehensive approach, ensuring that their success isn't solely reliant on the FCT market due to yield challenges.
“As we have observed, the industry is aggressive in securing business by resorting to price reductions. Unfortunately, there isn't a consensus within the industry regarding maintaining rate standards. Some stations allocate around 38-40 minutes to advertisements, causing them to struggle to retain their listeners' attention. This, in turn, impacts product quality. However, we remain vigilant about our inventory management to cater to those who seek deeper engagement,” she added.
Kukian said, “This year has been normal as we have moved past the pandemic. Radio listenership is at an all-time high owing to the innovative content strategies developed by the radio players. To showcase the impactful campaigns, case studies on the efficacy of radio are presented to customers and organisations to deepen engagement with the advertisers.”
“Furthermore, we provide consolidated marketing solutions to our clients, which encompass a mix of content dissemination solutions across on-air, on-ground, and social media space. By aligning these efforts strategically, we cater to evolving market dynamics and ensure a well-rounded approach that effectively resonates with our target audience,” he added.
According to the industry players, several sectors are primed to shine in the radio advertising arena from August to October. These sectors, guided by historical radio spending trends, encompass services and e-commerce, FMCG with a special emphasis on food and beverages, BFSI, building materials and home decor, retail, accessories, automotive, FMCG, mobile phones, electronic appliances, pharma/healthcare, clothing and apparel, jewellery,
These segments are known for their active participation and substantial spending during the festive period, collectively contributing to the dynamic landscape of radio advertising.