You are here: Home » Companies » News
Business Standard

FM radio ad rates to fall by 10-15%

Sapna Agarwal  |  Mumbai 

To beat the slowdown blues, private FM radio operators are reducing advertisement rates by 10-15 per cent and offering value- added services.

Ad volumes for the FM radio industry had declined by over 14 per cent during the December 2008 quarter as compared to the corresponding quarter a year ago, according to Adex India, a division of TAM Media Research.

During the October-December 2008 period, some of the biggest advertisers on the private FM radio channels reduced their spends.

“While detergents and biscuits makers had stopped advertising on radio, real estate reduced their spends by 21 per cent, life insurers by 60 per cent, consumer durables firms 30 per cent and mobile phone services providers by 4 per cent,” Ravi Kiran, CEO-South East & South Asia, Starcom MediaVest Group, a leading media buying agency, told Business Standard.

With the markets contracting, “ad rates for the 10-second ad slot will drop by 10-15 per cent from its current Rs 1,500-Rs 2,500 across the industry. Also, radio operators will offer value-added services such as built-in content in programming to maximise the ad spends,” said an analyst.

“In 2008, new players were selling ad space at 50 per cent discounted rates of leading players who were holding onto their prices,” the analyst who follows the sector closely told Business Standard.

According to Adex India, the growth for the calendar year 2008 was marginal at 3 per cent compared to the last two years when the industry ad volumes grew at over 20 per cent per annum.

The radio industry, which consists of private FM channels and All India Radio (AIR), had recorded revenues of Rs 750 crore in the financial year 2007-08. “The industry was expected to cross revenues of Rs 950 crore this year, but with a bad December quarter, where most players had experienced a de-growth, and a gloomy forecast for the running quarter, the estimate is Rs 850 crore now,” says Prashant Pandey, chief executive officer, Radio Mirchi, the FM radio channel owned by the Entertainment Network group.

As part of its value-added services, Radio City has recently launched a 26-week campaign in association with Maruti Suzuki for the car maker’s ‘Maruti Alto weekend getaway’ programme.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, February 04 2009. 00:23 IST