Why more & more advertisers are tuning into regional radio stations

Over the last couple of years, the radio industry has witnessed a significant rise in ad volumes, especially in Tier 2 and Tier 3 cities. According to TAM AdEx - Report on Radio Advertising: Jan-Mar-23, Gujarat was the leading state with 21% share of ad volumes, followed by Maharashtra and Uttar Pradesh. Surat, Hyderabad and Lucknow were the new entrants in the list of Top 10 Cities during Jan-Mar'23 compared to Jan-Mar'22. Clearly, the maximum growth is coming from regional markets. Though ad volumes per station observed a meager growth of 1% during Jan-Mar'23 as compared to Jan-Mar'22. Coming to categories, for the January -March 2023 period, LIC of India and LIC Housing Finance were the top two advertisers. The top 10 advertisers together claimed 18% share of ad volumes. 

Further, the TRAI Performance Indicators Report for the quarter ending September 2022 shows that the advertisement revenue of 388 private FM radio channels grew 11% to Rs 385.86 crore as against Rs 345.12 crore for the previous quarter ended on the 30th June 2022. Apart from the radio channels operated by All India Radio, there are 388 operational private FM Radio channels in 113 cities run by 36 private FM Radio operators. Undoubtedly, the numbers are going to rise further in 2023, as TRAI recently released a consultation report on issues related to community radios. The report outlines the entire roadmap to expand the radio industry in the coming years.

Given the scenario, we spoke to industry experts to understand the industry better, especially the growth of the regional markets. 

Players intervening in the regional market 

According to Neeraj Saraswat, Chief Revenue Officer – Radio & Digital Innovation Businesses, HT Media Group, regional radio market had been performing over the years. “The regional market was always going higher than the metro markets and they have bounced back much faster. This is the reason why we have a lot of brands, both local and national, inclining towards the small markets,” he shared. 

Ashit Kukian, the CEO, of Radio City, added, “Radio stations offer regional brands and advertisers a low-cost, high-impact value proposition making it a captive marketing channel.” 

Rahul Namjoshi, Chief Executive Officer, MY FM, said, “The phenomenon which is prevalent in all smaller towns of India is the democratization of technology leading to information access that was not there a few years back. If we coupled that with higher disposable incomes & increased aspirations, the same will result in demand.”

“Percentage growth in terms of year-on-year contribution of revenues from these markets is on the upswing. Regional advertisers are witnessing the benefits of their spending on radio and are very bullish,” he added. 

The roadmap for the future 

Sharing the categories and sectors which are expected to lead in the regional radio market in 2023, Namjoshi said, “A few categories like real estate, lifestyle, education, and healthcare will lead the overall radio volumes in 2023. Categories like auto, electronics, consumer durables, telecom devices, and media & entertainment have also now started investing in radio advertising.” 

Further elaborating on the expansion of the regional market and growth, Nisha Narayanan, COO & Director, Red FM & Magic FM, said, “Our focus is on developing diversified content that reflects our regional strengths. In the past couple of years, we have successfully created regional podcasts and digital and on-ground IPs that are well-received by the audience. We bank on our strength that lies in the regional market space to expand our vision into the vast culture of India.”

“To us, the year 2023 looks promising with pre-election advertising, a long cricket season, sporting activities, festivals, etc. Domestic tourism is also on the rise, which expands the audience reach and brand awareness,” she opined. 

Preeti Nihalani, COO, ENIL, Mirchi, too shares that they have put in a lot of efforts in encouraging the marketing and advertising fraternity to communicate with their consumers in local languages.

“FM Radio continues to be a reliable medium even in a digital-first world due to its immense reach and personal touch with listeners in Tier 2 & 3 markets and beyond. The primary reason listeners are drawn to radio is because the medium taps into the local pulse via its content, RJs, and local contests/activities. Additionally, it is one of the most apt mediums that help people stay informed during unprecedented times. Since the beginning, radio jockeys have been regarded as credible voices. They have had a substantial influence on consumers; an ability to connect with them in a more relatable and authentic manner - making them the original influencers,” she explained.

Kukian added, “With the increasing focus on localization, radio stations are well-positioned to offer targeted advertising solutions to advertisers. Moreover, the pandemic has accelerated the trend towards regionalization, with consumers becoming more focused on their immediate surroundings and communities.” 

Namjoshi shared that geographical expansion is largely driven by policymakers and depends upon many factors including the initial investment, total addressable market, and timelines for ROIs. “However, there will be newer content formats, alternate revenue streams by Radio Players, and a newer set of advertisers which will define the next 5-7 years for regional markets,” he added. 

Digital radio is the way forward

Sharing insights on how radio leveraging digitalization is the way ahead, Mitesh Kothari, Co-founder, Chief Creative Officer, of White Rivers Media, said, “With digital radio on its way, broadcasters and listeners alike will now have an improved multimedia experience. Radio stations can now precisely target audience segments while providing for their core audience.”

Narayanan added, “The evolution of technology is increasing the popularity of audio as a medium, particularly among youth and Gen Z who are more attached to their devices. This resulted in radio gaining more listeners during Covid, and becoming the most consumed and trusted traditional medium.”