The radio industry, one of the hardest hit due to the coronavirus outbreak and subsequent lockdown which impacted ad revenues, is now seeing strong advertiser interest during the festival season.
Players in the radio industry including Radio City owned by Music Broadcast, Entertainment Network India's Radio Mirchi and Big FM, part of Reliance Broadcast Network Ltd (RBNL), expect this festive season to be bigger than last year.
“The festive season has been reasonably good so far, advertisers are back on radio. We are seeing advertisers from all sectors back, and almost all categories are active during the festival," said Preeti Nihalani, chief revenue officer, Mirchi.
Abraham Thomas, CEO, RBNL, pointed out that advertiser interest has been positive since Q2FY22. “Q3 is looking promising. September was very good and we expect this to continue. September to December contribute 40 percent to overall ad spends. We are probably 50 percent over the previous (financial) year in terms of this festive period (in terms of ad revenue),” he added.
Nihalani explained that advertising for the festive season starts in the middle of August and continues all the way till Diwali, and after a lull, picks up again in December. “We see this momentum of growth continuing all of this year,” she added.
Thomas also noted that as advertisers did not spend before the festive period, they now have the budgets to splurge. “We don't see sharp drop post festive season because they (advertisers) have started to advertise,” he said.
Along with rising advertiser interest, ad pricing is seeing pre-COVID trends.
“Last year ad rates were significantly down and had taken a beating. That’s made a recovery this year. Many networks have pulled back discounts. Ad rates are now close to original levels,” said Thomas.
When it comes to markets from where radio channels are seeing strong advertiser interest, Thomas said that growth in ad revenue is driven by Tier II and III markets. “Places like Nagpur, Jaipur, Ahmedabad and Lucknow are driving growth. Local advertising in Tier II markets is growing. Tier II, III markets are seeing both generation of ads from local clients (advertisers) as well as advertising into those markets by national clients,” he added.
In terms of categories, this season has seen some changes due to the impact of the COVID-19 pandemic. While categories like advertising by government and public service messages, fast-moving consumer goods and automobile companies continue to be in the top five, Thomas said that currently pharma and wellness, banking and finance are leading.
With more advertisers coming on board and listenership increasing, radio networks are expecting a strong recovery.
Thomas noted that the top four markets have seen 20 percent growth in listenership and this along with revival in ad spends, according to him, should see the industry reach 80-90 percent of pre-COVID business by the end of FY22.
“We will cross the pre-COVID levels by FY23. Next year we will be back to pre-COVID levels and beyond,” said Thomas.
In 2020, radio saw one of the biggest drops in advertising expenditure.
According to a Pitch Madison advertising report, radio saw a shrinkage of 43 percent versus 2019. Advertising expenditure on radio dropped from Rs 2,260 crore in 2019 to Rs 1,270 crore in 2020 and saw a 1 percentage point fall in market share from 3 percent in 2019 to 2 percent last year.
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