Boom time on the radio

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: As FM radio goes from 12 to 91 cities and advertisers sing “radio ga ga”, the cash registers are very definitely ringing. It is, also, prompting radio stations to think out of the box and woo advertisers like never before.

First, some numbers: the I&B ministry has issued 400 licences till February 2007—this is in addition to some 336 licences issued last year to various players.

Even though industry experts say the FM phenomenon is a recent happening in India, it has witnessed a growth of 58% in advertising revenues. And come 2010, the industry is expected to reach the Rs 800-crore mark.

According to an ADEX India report, radio advertising constitutes almost 3% of the total advertising pie, which is pegged to be around Rs 16,300 crore. In 2005, radio advertising contributed around 2.4% of the total Rs 13,200 crore generated in ad revenue.

The FM radio market in India is pegged at Rs 360-Rs 500 crore and is expected to grow at a rate of 40% annually. Industry experts believe that the geographical expansion of FM from 12 to 91 cities in the second phase, along with its interactive, local and cost efficient nature, will contribute to the growth.

Says Rajesh Tahil, CEO, Radio One: “This year, the radio advertising industry has seen a huge growth. In the cities where FM already existed, there’s been organic growth. And new stations have mushroomed in other cities. As a result, new categories have been developed to suit advertisers. The beauty of the medium is that one can localise the content to a great extent.”

With the number of stations increasing, the race is on among competitors to provide exclusivity and create properties around advertisers, who in turn, are opting for more than just a spot. Radio stations are being forced to look beyond mere spots and extend their portfolio — to conducting a live show from a retail outlet, and concentrating on activities, especially in the two-tier cities.