Apurva Purohit, President, Jagran Prakashan and Director, Music Broadcast Limited tells us about the growing influence of Radio and how it can effect product and brand-level behavioural changes; a key insight for advertisers and media planners.
BY SIMRAN SABHERWAL
Music Broadcast Ltd (MBL), the parent company of Radio City and a subsidiary of Jagran Prakashan, recently commissioned a research report by Nielsen called ‘Power of Radio’, which sheds light on the media consumption patterns across metros and non-metros. According to Apurva Purohit, President, Jagran Prakashan and Director, Music Broadcast Limited, the reason for commissioning the report was to answer a pertinent question that is periodically thrown at the FM player. She says, “With the disruption that has happened in media and Digital, and the changing consumption patterns, the question that was being asked was, does Radio still have a life in this Digital age? In addition, there has been no large-scale industry study done on Radio for a number of years. So we decided not to talk about Radio City specifically, but to commission an industry-specific study instead.”
POWER OF RADIO: GOING BEYOND JUST MUSIC
While the prevailing thought process is that the primary reason for listeners tuning to Radio is music, Purohit says that what surprised her was that increasingly people wanted to actually listen to non-music content. So, while music continues to be an important component, it’s local news, information and social news, that’s got the listeners’ ears. She adds, “The other surprise was that the credibility of the Radio medium is so high. Typically, you think of this medium with music and RJs as entertaining companions, but now you realize that RJs are becoming big influencers and are able to impact a person’s life.”
As per the findings of the report, Radio is the second most accessed media, after Television, with listeners tuning in to radio five days a week in both metro and non-metro areas. The report also states that Radio is a trusted medium in both these markets and a medium that has been able to strike an emotional chord with listeners.
SCOPE OF RADIO FOR ADVERTISERS
So what are some of the key takeaways from the report for advertisers and media planners? “Radio is both, an impactful and an engaging medium. It is not just about the music playlist. It is a medium that is able to impact and change consumer behavior. And if this is the case, then how much more effective can it be to make a behavioral change from the brand perspective also? You can therefore make product-level and brand-level behavioral changes using this medium. This is the single most important thing an advertiser or media planner should take out of this,” explains Purohit.
These findings should help strengthen Radio’s pitch for advertisers and media planners as more than just a cost-effective frequency builder, according to her. “People have always used Radio unfairly by thinking of it as an add-on medium, a frequency builder and as a reminder medium for TV and Print. What this research clearly proves is that Radio is not the reminder medium, but can be the primary medium to impact change. If you want your consumer to change, Radio can work very well because it’s trustworthy and credible. The likelihood of people believing an RJ is far higher than the voice of a godman on television,” she says.
GOVERNMENT, REAL ESTATE AND BFSI DRIVE GROWTH
According to the Pitch Madison Advertising report 2018, Radio Adex saw good growth in 2017, growing at 7% to become a Rs 1,875 crore market last year. However, the share of Radio in the overall advertising pie has remained stagnant at 3.5% for the last few years and increasing the medium’s share in the advertising pie remains a challenge. A big factor for this is the fact that FM Radio is only available in 30% of the country. On her part, Purohit says, “People confuse geographical reach with the depth of reach that Radio has. In a city, Radio has a 60-70% reach. People need to look at it like that.”
Looking at the broader Radio universe, with the lingering effect of de-monetization and the implementation of GST impacting advertising spends, the growth for the year had initially been pegged at 8-9%. However, given the uptick in advertising spends since last November - with government, real estate and BFSI being the key drivers – the FM player is looking to end the year with double-digit growth. “The growth rate since November has been around 15% and we believe that we will end the year with a growth of 11% and PAT will grow at 30%. The future is bright because we are getting into the pre-election year and the ad spends will only increase. So, as long as the economy supports us we are quite confident of mid-teen growth next year,” she says.
What will also help ramp up profits is that the 11 stations launched by the companies, won in the second batch of auctions of private FM Radio Phase III in 2016, is expected to break-even in September-October. She says, “If we are getting mid-teen growth in revenue, and our costs are more or less stable now, our bottom line actually should grow by around 20-30%.”
For the moment, the network is not looking at any further expansion in the Phase III auctions. The company sees huge headroom for growth and is betting on upping its inventory utilization which is currently around 60% on an average level. Says Purohit, “We are not looking at any expansion and are not looking at multiple frequencies at the current rates. However, a year down the line if something becomes attractive, it is not a bad option for us to look at. Right now if you are talking of expansion or acquisition, we are looking at plugging gaps.”
FM AND DIGITAL TO OUTPACE PRINT GROWTH
Looking at the broader Dainik Jagran Group and its performance in the year gone by, Purohit says, “Print has been reasonably average and the growth was subdued for Dainik Jagran because of factors such as the economy, demonetization, GST and the UP elections. However, post November, business has been better. Having said that, within the Jagran Group there are specific businesses which are doing well. Outdoor showed its’ highest ever growth at 30%, while Digital also grew at 30%. Activation was okay. Within Mid-Day, Gujarati Mid-Day did very well. Our paper Inext grew at 27%. The new businesses within Jagran have been done extraordinarily well.”
One area of concern, however, is the price hike in newsprint cost. Purohit explains, “As of now there is no clarity as to by how much newsprint rates will go up, but it is believed that it will be in the region of 20-30%. Newsprint itself is around 30% of the cost, so, 20-30% on 30%; that’s a reasonably high cost.”
On a final note, commenting on what the growth drivers for the Group will be, Purohit says, “Clearly all the news businesses have turned around and are actually contributing quite significantly to the bottom line. That said, Radio City and Digital will grow and outpace any other growth. We also expect better numbers from Dainik Jagran this year.”
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