The regional market account for over 10% share of the adex for the radio industry
The radio industry reported a 44% decline in advertising revenue in 2020.
Even as radio as a medium registered a 23% rise in listenership in 2020 with people tuning in from home during the lockdown and post that, in terms of advertising revenue it continued to bleed. However, that seems to have changed now as the industry claims that not only has it posted a growth in listenership, even brands have made a comeback. “The growth in listenership is driven by growth in weekends, afternoon and night-time listening besides prime-time. Moreover, car listenership is back to pre-covid levels,” Abraham Thomas, CEO, Reliance Broadcast Network Limited told BrandWagon Online. In January 2021, the medium registered 4.6% growth in listenership when compared to December 2020, according to RAM (radio audience measurement).
And this has marked the return of advertisers, more so in regional markets. “This quarter, the top eight metros such as Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Ahmedabad, Kolkata and Surat registered about 15% decline in advertising volume while the smaller towns and tier 2 cities saw a rise in ad volumes,” Prashant Panday, MD and CEO, Entertainment Network India Ltd (ENIL). According to Tam Media Research, while volume of ads on radio dropped 27% in 2020 when compared to 2019, volume has returned to pre-covid levels in the last quarter.
According to industry estimates, regional markets account for over 10% share of the adex while mini-metros and tier-1 cities account for 4 – 5%. Indore and Jaipur rank the highest in terms of ad volume. Industry experts believe that the growth in small towns is primarily because brands are now trying to engage consumers in such markets. “Radio helps brands to reach out to localise markets and whenever brands need to do that they reach out to radio. Hence a rise in regional and local adex could be because brands need to create awareness and recall in smaller towns,” Jai Lala, COO, Zenith, said.
The radio industry reported a 44% decline in advertising revenue in 2020 to reach Rs 1,270 crore, Pitch Madison report revealed. With this drop, Radio has also lost one percent of the market share. This has brought down its share to two percent . However, the industry is estimated to grow 38% in 2021 to reach Rs 1,750 crore mark in ad revenue. According to industry sources, the cost of a ten-second ad spot in markets such as Delhi, Mumbai ranges between Rs 1,000 – 1,200, while the rates vary between Rs 600-800 incase of mini-metros. Further, the rates reduce to Rs 200-400 in smaller cities. It is to be noted that while the rates are back to its pre-covid levels, they are still discounted as they are being offered in a combo package of 2+1 (one prime-time slot free with two prime-time slots). For Panday, currently, the discounts are more tactical with some advertisers, if the spends are high or restricted to some markets such as metros. “Pricing recovery in full may have to wait for the ‘season’ (mid-August) in 2021 to begin,” he stated. Further, the players are now looking at earning from additional revenue streams including digital as well as events. According to Thomas, the industry has witnessed a growth in revenue from solutions beyond radio like digital radio, online events, brand advocacy and influencer marketing, and podcasts in the last year.