FM radio sees big revenue from political ads
The growing reach of private FM radio is expected to find political expression for the first time in India as parties tap it for their campaigns, bringing in welcome revenue to the Rs.8.3 billion/$165 million radio industry in the country.delhi Updated: Apr 08, 2009 16:13 IST
The growing reach of private FM radio is expected to find political expression for the first time in India as parties tap it for their campaigns, bringing in welcome revenue to the Rs.8.3 billion/$165 million radio industry in the country.
Prashant Panday, CEO of Radio Mirchi 98.3 FM, says: "I have no doubt that there will be revenue generation to the tune of Rs.400-500 million (Rs.40-50 crore) in the radio industry (through on-air political ads)."
For the parliamentary polls in April-May, most political parties are going to use the 236 operational FM radio channels across the country to reach out to an estimated 50 million audience.
"Many political parties realise the reach of the radio and the play that the ads would get and are warming up to the idea of broadcasting their ads on radio," Panday, who is also senior vice president of the Association of Radio Operators for India (AROI), said.
Broadcasting of political ads was not allowed on private radio stations until 2005 when the second phase of FM radio privatisation was rolled out. This is the first time general elections will be held after that.
Prior to this, only stations like the All India Radio (AIR) or BBC's Hindi station used to air such campaigns.
Taking advantage of the new development, most major parties like the Bharatiya Janata Party (BJP), Congress, Samajwadi Party and Bahujan Samaj Party (BSP) as well as a few regional parties are already making use of the facility.
According to Ashit Kukian, executive vice president - national head (Sales), Radio City 91.1 FM, "There is a sudden buzz among various parties to advertise on radio.
"We are expecting a lot. I think the amount of revenue generation after the final phase of polls could be anywhere between Rs.30-35 crores (Rs.300-350 million). But since the first phase hasn't started yet, there's hardly anything to comment now," he said.
Panday says radio is an effective medium for more localised advertisements as every region has a separate radio station unlike the centralised television studios in the country.
"Radio definitely has a two to three times wider reach than television. For political campaigns, it is wiser to use the radio because each district is like a different battleground for the party and radio's localised reach can really help.
"Besides, as a medium, it cuts across people of different strata. Apart from the ones who listen to radio in their air-conditioned cars, the ads would reach the down-the-line strata where the only source of entertainment and news is the radio," he said.
Praveen Malhotra, senior vice president (sales), Big 92.7 FM, said: "As of now it is very difficult to comment on how much parties are willing to spend for radio campaigning because they are rolling out the campaigns in phases."
However, Radio Mirchi's Panday says political parties "must be allocating at least 10 percent of their total spends on radio advertising".
"I believe they are spending quite a lot of money. As of now, parties are only trickling in because it's just started - but the potential is much higher," he averred.
Apart from just deciding on which station to place their ads on, parties are also becoming conscious about using big advertising industry names for their campaigns.
While the Congress has roped in three known ad agencies - Percept, Crayons and James Walter Thompson (JWT) - to prepare the party's campaign strategy, the BJP has hired the services of Frank Simoes-Tag and Utopia Consulting.
Nisheeth Sharan of Utopia Consulting said: "We have placed BJP campaigns on all private FM channels as well as on All India Radio because any means of communication during the elections only helps.
"And radio as a medium is not just cost-effective for advertising consumer products, it can work wonders for politics too."
Private FM players also have enough reasons to say the radio is a better medium for political campaigning than traditional methods like television or print.
"There is no debating that the radio is the best local media available to connect with people even in farflung areas. And it makes more sense to campaign through it rather than print because it is cost effective and is a mass medium, it cuts across all literacy levels," said Malhotra.
According to report compiled jointly by global consultancy KPMG and the Federation of Indian Chambers of Commerce and Industry (FICCI), the country's radio industry is set to grow at 14.2 percent per annum and reach the size of Rs.16.3 billion by 2013.