Executive Summary

Advertising in general expresses the positioning. Powerful advertising is the result of

powerful planning. Great ideas and great ad campaigns don’t just pop out from no where, they
are built on the key communication points that motivate sales.

Radio is entirely a medium of sound, which evokes smells, sensations and visual images
which brings the listeners imaginations into play.

Radio advertising is one of the tools of advertising which is effectively used for
communication and positioning. It is one of the foundations for effective and successful
advertising. Radio can be used effectively for advertisement since it can target the large audience
because of its high reach. Radio is good at increasing awareness about the brand and business
and helping in building the brand image.

But all this was only for pure academic purpose. With the advent of television radio lost
its popularity and thus its purpose with the marketers. This led to sharp declines in the proportion
of advertisement spending on radio as compared to other media.

But then came the governments order on liberalization and privatization. This brought
about loads of changes in the world of radio broadcasting in India. Prominent and established
companies entered the business of FM Broadcasting.

FM broadcasting has breathed a new life into the medium of Radio in the past few
months. Could radio now think this as a new phase of its life or a re-birth? Of course yes, people
are today talking only Radio---- Radio Mirchi, Radio City, RED, Go and WIN. One will find
people with radio sets of different shapes and sizes listening to their favourite music on roads, in
hotels, even the bidi shops aired on any of the music channels. The radio channels are now vying
against each other to provide their best to the listeners
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 However one can see that although radio is an excellent medium it has been used to its
full potential and various efforts should be taken to improve it as with proper direction radio can
reach heights as it is the cheapest and a very good medium.

Objective

Through this project my objective has been to understand the following

• To find out about the current scenario of the radio industry.

• The reasons for a stunted growth of the industry

• The various steps in radio advertisement

• Realizing the needs and wants of consumers and fulfilling them

• What the various radio stations have to offer the masses.

 Research Methodology

Through this project I have made an effort to understand the advertisng tool called radio
advertising which is being increasingly recognized by marketers as a powerful tool that helps in
finding new customers and retaining the existing ones at a much lesser cost.

Primary Research:
The aim of primary research was to understand radio advertising as it is seen in the
corporate world. To understand this I have taken two interview from different fields.
Mr. Madhav Joshi who is currently working in Leo Burnett who helped me understand
what all goes into the making of a radio advertisement.
 The mode of interview used was an informal one where he answered my questions on
one to one basis.

Also Mr. Sudarshan Sahe the senior marketing manager of Radio City gave me an
interview and helped me in trying to understand as to how the station works and looks after the
needs of its consumers

Secondary Research
The aim of secondary research was to understand as to why radio advertising has been
able to grow at a considerable rate as compared to the other media.also the fall out of radio in the
last decade .
It was also undertaken to understand how radio advertising is done and what re the
current players in the market.
Secondary data collection method: desk research
Secondary data collection sources: internet, books, newspaper articles

Introduction

Old media don’t’ die! They just bounce back in new avatars. Not so long ago radio had
been written off as fuddy-duddy, down market and not so cool. Television and later “new media”
were touted to being the media of the future. But thanks to technology radio is making a
comeback. In fact, in its new avatar-fm-radio is all set too become the hippest, coolest and most
with -it medium.

FM radio is a new entity altogether and has to deal with new market dynamics. Media
owners dealing with new markets will virtually have to draw up their strategies as they go along,
create programming that is new, innovative and grab away eyeballs from TV sets and make them
tune into their radio sets. It’s a whole new challenge and competition is never far away. Ad
revenues will also not be easy to come by, as advertisers will expect media players to put their
money where their speakers are before they commit large sums of money towards radio
advertising. The other challenge for radio in attracting advertisers is the nature of the medium-
radio has always considered being a reminder medium. The involvement of listeners to radio is
low, Vis a Vis television or print media.

However in spite of the various challenges the emergence of private FM stations is

certain to increase the quantum of radio advertising in the country , much like satellite channels
did to the quantum of television advertising in the country. That should open up a vast new
market of consumers-100 million Indian households own an estimated 150 million radios,
outnumbering television sets 3:1.

The geographical area covered by radio in India in India is as high as 98 percent and the
penetration level is approximately 97 percent. But FM presently covers only 17 percent of the
area and 21 % of the population of India through transmitters. Currently radio has just 2 percent
of the 9000 crore Indian advertising market according to an Arthur Anderson’s survey. Globally
depending on each country, radio has a 5 % to 12 % of the advertising cake. On the higher side
are countries like the United States with 13 %, Canada with 12.7% and Spain with 9.1%. FM
station executives are not forthcoming on multi-platform strategies as yet. Given that radio has
penetrated into 100 million homes and a FM set costs around Rs. 50/- FICCI estimates FM’s
share up from the present 1.5 percent to 5 % in five years. They have also forecasted that
revenues from radio advertising in Indiawill be Rs. Rs. 1200 crores by 2005 and Revenue of
radio services is expected to rise to Rs 689 crore by 2008 at a CAGR of 30 per cent.

While TV is a family medium, radio is personalized. Also advertising of certain product

seems to work very well while some might not. For example, cellular phone service or auto
related products would have a good impact when advertised on radio is primarily known as a
“drive time” medium most people who turn in are doing so while commuting. Thus the potential
if FM is better is bigger town, as the car population is much bigger. This would be the key when
evaluating the medium. Also one must not forgot that radio continues to be a medium that has
tremendous reach among the poor and marginalized sections of society.
 With the coming of more channels, and the emergence of lifestyle advertising, radio will
become a push and pull medium. As said earlier, is not just making a comeback but is being
reincarnated into a new avatar.

Some Basic Technical Knowledge

Any radio setup has two parts:
• The transmitter
• The receiver
The transmitter takes some sort of message (it could be the sound of someone's voice,
pictures for a TV set, data for a radio modem or whatever), encodes it onto a sine wave and
transmits it with radio waves. The receiver receives the radio waves and decodes the message from
the sine wave it receives. Both the transmitter and receiver use antennas to radiate and capture the
radio signal.

When you listen to a radio station and the announcer says, "you are listening to 91.5 fm
“what the announcer means is that you are listening to a radio station broadcasting an fm radio
signal at a frequency of 91.5 megahertz. Megahertz means "millions of cycles per second," so
"91.5 megahertz" means that the transmitter at the radio station is operating at a frequency of
91,500,000 cycles per second. Your fm (frequency modulated) radio can tune in to that specific
frequency and give you clear reception of that station. All fm radio stations transmit in a band of
frequencies between 88 megahertz and 108 megahertz. This band of the radio spectrum is used
for no other purpose but fm radio broadcasts.
Common frequency band includes the following…

• AM radio - 535 kilohertz to 1.7 megahertz

• FM radio - 88 megahertz to 108 megahertz
AM radio has been around a lot longer than FM radio. The first radio broadcasts occurred in
1906 or so, and frequency allocation for AM radio occurred during the 1920s. In the 1920s, radio
and electronic capabilities were fairly limited, hence the relatively low frequencies for AM radio.
FM radio was invented by a man named Edwin Armstrong in order to make high-fidelity (and
static-free) music broadcasting possible. He built the first station in 1939, but FM did not
become really popular until the 1960s.

Royalties

FM is primarily a music channel, so the question of royalties is relevant. The Indian

Protographic Record Society (IPRS) and Phonographic Performance (P) Ltd. (PPL) are supposed
to hold all the rights of royalties. They are demanding Rs. 1,500 per hour (as against Rs. 100 per
hour, at which they are supplying music to AIR), PPL is demanding a royalty of Rs. 250 per hour
of needle time, the actual duration of a piece of music. The IPRS is demanding Rs. 100 per hour.
The IPRS claims royalty for the original composers and authors of music.

Cost - Aspect
A Licencee pays Rs. 6000/- per hour.
Add Rs. 1,500/- for the music.
Add Rs. 3,000/- for the technology, salaries and other expenses. An hour long show thus
costs Rs. 10,500.
10 - Minutes have been set aside for advertising. One minute is reserved out of 10 -
minutes for social awareness advertising.
 Thus, advertising time available for sale is 9 - minutes.
In other words, 18 advertisements each of 30 seconds can be accommodate in an hour.
This is the high target. Besides the tariff card should be modest, considering the limited
range and listenership supposing a 30 - seconder costs Rs. 500 at prime time for 18 such spots,
the total revenue generated is Rs. 9000/- . Another estimate puts the production cost of an hour
long programme around Rs. 6,000/-. Add Rs. 6,000/- of the licensee fee to AIR.
Studio hiring costs are between Rs. 500 - Rs. 1000 an hour. The total expenses are thus
Rs. 12,500 to Rs. 13,000 per hour.

Advent of Format Radio

The arrival of 'Moving Pictures' with sound and then 'Television' were expected to be the death knell
for 'Radio'. However Radio has not just survived repeated predictions of its demise but grown tremendously.
It has benefited listeners and advertisers alike and earned the status of a 'Constant Companion'... What
allowed Radio to accomplish this feat? Read on for the long journey the Radio industry has covered thus far.

It was way back in 1895, that Guglielmo Marconi invented an antenna to send and
receive radio signals. It took quite a while before Reginald Fessenden developed the first radio
receiver in 1913. However, experts give a lot of credit to David Sarnoff who actually conceived
what is called as the "radio music box". It was Sarnoff who suggested that radio should be mass-
produced for public consumption. His persistence paid off in 1919 when such sets were available
for general purchase. This saw the beginning of what was later looked on as the 'Golden Age of
Radio'.
Early 1920s saw the launch of commercial radio. People in households would gather
around the radio to listen to their favorite programs much as they do today with TV. Radio
became the first medium delivering entertainment to the masses in their homes. The 1st paid
announcement on radio was a 10-minute capsule from Howthorne Court; a Queens based Real
Estate Company. This era was characterized with 'block programming' wherein radio offered
something to everyone. News, drama, sports; live musical recordings would be presented in 30
or 60-minute programs. A network soap opera could be followed by a 15-minute newscast
followed by one hour of a concert.
 Then in the 1950s TV began to catch the public's attention. Audiences were charmed by
the audiovisual experience of TV. A large number of popular shows moved from radio to TV.
That was not all, as the radio industry was also losing a large number of talented staff to TV.
At this point in time, radio experts discovered an opportunity that only radio could
provide. They realized that radio was the only medium that could be used while doing other
things, like getting dressed for work, cooking a meal, traveling to office, studying and more.
Radio turned 'local' and moved to what is known in the industry as 'Format'
programming. This era also spawned two of radio's greatest strengths: immediacy and local
service. Format radio strategy was based on providing the same kind of entertainment to a
selected audience, throughout the day, seven days a week.
As the story goes, Storz and McClendon used to frequent a local malt shop, which had a
jukebox. They observed that the customers would usually come and play the same songs that
they liked, over and over again. In fact, the staff serving these people would end up playing just
the same songs even when the shop was closed.From this insight emerged the "Top 40" format or
the "Contemporary Hit Radio (CHR)" format were the most popular hits would be played on a
higher rotation.
This led to a change in the way radio time was being sold. Sales people shifted from
selling programs to selling commercials. It also led to a shift in the way radio programs were
scheduled. As radio was being used as a background medium of entertainment, it had to be
relevant to the listener at every point of time in the day. The shows therefore had to be reflective
of various day parts in the life of the listener.
Irrespective of the form it came in, format radio definitely made radio not just survive the
onslaught of TV but also made it grow tremendously. Being the only medium that could be
carried and used wherever you are, it could update you about your world throughout the day
while providing you with the entertainment you like all the time. Radio became "The Constant
Companion".
The total number of radio sets at the time of independence in 1947 was a mere 275000.at
that time a radio receiver used to be a status symbol in this country. But today its possession is
taken for granted. According to estimates, there are radio sets in about 105 million households in
the country.

History of Indian Radio

 For more than 4 decades, the Government of India did not permit private radio stations
to broadcast in India. Then history changed its course. In 1993, the Government allowed private
FM operators to 'buy' blocks (chunks) on All India Radio, prepare programming content, book
commercials from advertisers and broadcast the whole lot. Within 4 years, (1997-98), the FM
Radio advertising and sponsorship business grew to Rs. 93 crores with Times of India's Times
FM & Mid-Day Group's Radio Mid-Day becoming the main players.
Then, in June 1998 the Government, through its electronic media regulatory body Prasar
Bharti, decided not to renew contracts of private FM operators.Not surprisingly, the advertising
revenue fell by 50% within a year!
This time, the Government gave the green light to privatize radio in India. July 6, 1999
was the historic day when the Government announced that 150 new FM channels would be
licensed across 40 ci ties .
And in 2000, the Government auctioned licenses for private FM channels to bolster the
revenue. And the focus on metros was evident in the bidding. Expecting to collect Rs 800 million
from auctioning 108 licenses, the government had to actually face mass withdrawal of bidders
because of the huge license fee. A handful of serious bidders chose to remain.
In response to the Government's offer, many companies bid for the licenses to operate in
key markets. But the going was not so easy. Many gave up, unable to shell out the high license
fee. For instance, the bidding price for the Mumbai license was reportedly to the tune of Rs
9.75 crore. Others dropped out saying the business was not viable. So, in effect, the competition
shrank, players consolidated and the Government extended its deadline. Today, there are roughly
10 players who will operate approximately in 37 cities across the country.

The government collected close to Rs 4.6 billion as license fee for the privately run FM
radio channels in 40 cities. New Media Broadcasting, a Zee Group company, which focused
mainly on the smaller towns, won the largest number of bids.
The first round of bidding - for 76 channels in 26 cities, garnered close to Rs 3.5 billion.
The government got the highest bids - Rs 97.5 million from each of 10 broadcast companies - for
stations in Mumbai. Interestingly, the bids for Hyderabad and Nagpur came next, each for Rs
77.2 million and Rs 74 million, respectively, while the bids for Delhi were Rs 71.2 million each
 Radio is expected to follow the growth of the Television industry, which grew rapidly
following the entry of private players
Currently, FM coverage in India is restricted to just 17% of the country, compared to 89%
of All India Radio (AIR).

Players in Different Centers

Company Location of Centers Number of Bid amount for

Centers first years
license (Rs.
crore)
 Entertainment Delhi, Mumbai, Calcutta, 12 43.87
Network [India] Chennai, Ahmedabad,
Bhubaneshwar, Cuttack,
Hyderabad, Indore,
Jabalpur, Lucknow, Pune

Hitz FM Calcutta 1 1.00

India FM Calcutta 1 1.00

Living Media Delhi, Mumbai, Calcutta 3 17.87

Mid Day Delhi, Mumbai, Chennai 3 20.17

Broadcasting

Millennium Delhi, Mumbai, Chennai 3 20.17

Broadcasting

Music Broadcasting Delhi, Mumbai, Nagpur, 6 41.37

Bangalore, Patna,
Lucknow

Sumangali Chennai, Coimbatore, 3 9.87

Publications - Sun Tirunalveli
TV

Vertex Broadcasting Calcutta, Indore, Bhopal, 4 2.90

Vishakapatnam

Udaya TV - Sun TV Vishakapatnam 1 0.50

Incidentally, Music Broadcasting became the first firm in India to commence private FM
broadcast from Bangalore in July.
Licence Fee and revenue sharing model

Currently, FM players pay annual licence fees, which go up by 15 per cent every year.
Private FM radio sector would shift to a revenue-sharing model from the existing licence fee
regime. However, revenue-sharing also exists in the media sector. The objective is to “make FM
radio a success story”. It’s better to keep the revenue-sharing figure low than to have a failed
project. There has been debate on whether to recommend a revenue-sharing structure or a fixed
amount for a period of 10 years; it is firm on revenue-sharing now. Revenue-sharing will follow
payment of a one-time entry fee through a process of bidding. Revenue-sharing figure is
quite low at around 4 %.
While the private FM players had sought revenue-sharing in the band of 2-2.5 per cent,
the panel has fixed it at 4 per cent.

Setting up new radio stations

After the second round of privatization, the number of FM radio stations targeted is
around 300 to 400. The panel also suggested that players wanting to enter the sector in the
second round of licensing need to have a technical viability clearance by a financial institution
on the financial viability of the project. It has also recommended to the government to release
additional spectrum for the use of FM radio companies so that the number of companies
operating in one centre can go up.

Future of Radio Industry

 FM Radio can play its part in building a stronger business future for India. Providing
free-to-air local broadcasts of music and entertainment, helpful information - traffic advisories,
community announcements and public service messages provide a real value-added service. But
at current levels of advertising support, each radio station is reeling under the brutal financial
impact of high costs. With more players in the fray the FM radio industry would grow and also
enhance the government’s yield from licensing radio naturally.

The new India deserves an active private FM radio sector. It can provide a level playing
field with benefits for listeners, for advertisers, employment & career options. Spearhead the
government objective of growing the FM radio business in India.
With the government ready to reduce the license fees it will help in attractingnew palyers
like reliance which had earlier backed out only due to the entry fees.also government allowing
foreign players to enter he Indian market it will help the industry grow. Virgin group has already
started exploring the Indian market for suitable partners. various radio stations are coming up
with IPO for example Radio Mirchi thus helping them expand.
The future looks bright as the reach of radio is expected to raise post the increase in the
number and quality of players in the industry. It is on the basis of these key drivers of growth, it
is being predicted that radio's share in the total advertising pie will see an increase in the medium
term. There are an estimated 150 million radio sets across the country. The Rs 1.6 billion
industry is reported to be growing by 31 per cent every year and should touch the Rs 6.2 billion
by 2007, with revenue rising at 23 per cent annually. Also, though radio has only a 2 per cent
share in the Rs 6,000 crore Indian advertising market, advertising spending is expected to
amount to Rs 500 crore this year.

SWOT Analysis
Strengths:

• Recently, the government has agreed upon revenue-sharing model, which is 4 % for the
growth of the radio stations. So that they can develop themselves well because this
industry is still in an introduction stage.
 • The success of private FM stations, and reveals that radio listenership habits have
changed considerably; not only are listeners tuning into it more often but also sticking to
radio for longer hours everyday.

• The advertisers, who would depend on word-of-mouth, pamphlets, brochures or ads in

local supplements of newspapers, are welcoming the opportunity.

• Radio is considered as a background medium, because people can listen to radio anytime
and anywhere they want. It is also a free medium.

• 90% of India has access to radio which is unmatched by any other media.

• Radio also reaches to uneducated village folk who do not read print publications. At the
places where the literacy rates are low where people hardly read newspapers and radio is
the only medium that they can understand. They can’t afford a TV set. Therefore radio is
more popular.

• Radio is the least cost medium and it helps to reach mass audience with various
backgrounds. Radio offers its reach frequency and selectivity at one of the lowest costs
per thousand and radio production is relatively inexpensive.

• Radio is considered as a medium where the “Proximity to purchase” is very high.

• Radio is a complement to another media. Therefore, other media or the advertisers or

agency can use this medium for brand recall.

Weakness:

• One of the major weaknesses of Radio is that there is very less differentiation in the
programmes that are aired. Most of the stations plays much of the music that is played
consist of Hindi Film songs, and therefore it is difficult to differentiate between the
programmes of the different channels.
 • Fragmented Audience - the large number of the audience in India is fragmented in
various remote places. And therefore, the percentage of listener tuned to anyone station is
likely very small.

• No proper research available - research is very important for any advertising segment.
Research is the main base to attract client and get more revenue. But, in India there is no
proper research is available. Many stations are conducting their own research which can
be biased.

• Radio-only nature of radio communication is a tremendous creative compromise. An

advertiser whose product depends on demonstration or visual impact is at a loss when it
comes to radio. And like its radio message creates a fleeting impression that is often gone
in an instant. Many advertisers think that without strong visual brand identification the
medium can play little or no role in their advertising plans.

• Increase in listenership numbers but no increase in ad revenue. This is the situation that
every radio channel is facing.

• Short commercials

Opportunities:

• Getting copyright licenses from the government for running mega events which are aired
on the AIR radio station and have been restricted to be aired on other private stations.

• Launching a radio station with 24-hour news channel

• Tie-ups with BEST or railway authority for playing the FM in train and in bus.

• The launch of Private Radio FM has managed to create a set of ‘New Listeners’ for the
medium

• The new radio stations which will come in future they can have venture with the college
or university campuses. And can play their station which will exclusively provide with
the information relating to that university/college campus.

• With the coming of the many more new players in the radio industry each channels can
position themselves quite different from others, like, if some station is targeting the health
 conscious people then their programming strategy will vary accordingly. And then it is
easier for the advertisers also to decide on which channel to advertise.

• Allowing private FM players to start news and current affairs programmes.

• One has to constantly innovate, and that is the challenge. Brand building is thus much
more difficult. At the same time, we are very bullish, and gung-ho about this whole
enterprise.

• Leaves huge scope for innovation in local market

Threats:

• The biggest threat to private radio industry players is ALL INDIA RADIO. AIR is the
biggest player in India because of its reach, low charges, government channel etc…

• Because of the new government policies there will be more number of stations and then
competition will also increase. This is one of the biggest threats it faces. With no
particular differentiation in the music. So, there is a fear of losing its brand loyalty.

Advertising in India
India has been among the fastest growing economies in the world, with a nominal GDP
CAGR of 9.94% over the last 10 years (1995-2005). The nominal GDP for fiscal 2005 was Rs.
30,636 billion. According to CSO estimates nominal GDP growth for fiscal 2006 is estimated at
10.9%. There is a correlation between the economic growth rates of a country i.e. the nominal
GDP growth rate, and growth rates of the advertising industry

The Indian advertising spends, as a percentage of GDP, is 0.34%, which lags behind other
developed and developing countries

During fiscal 2005, the gross advertising spend in India is estimated at Rs 111 billion, and is
expected to grow at 14.2% to reach Rs. 127 billion by fiscal 2006
Segmentation in advertising

The five key industry segments comprise print, television, radio, cinema, and outdoor.
These different segments within the industry are at varying stages of growth and corporatization

Media Spends as % of Total Ad Spend

Year Print TV Radio Cinema Outdoor Internet
2000 49.0% 39.3% 2.5% 0.5% 8.4% 0.3%
2001 48.4% 40.6% 2.7% 0.4% 7.5% 0.4%
2002 47.2% 41.9% 2.9% 0.7% 7.0% 0.4%
2003 46.6% 43.0% 2.9% 0.7% 6.5% 0.4%
2004 46.3% 43.7% 2.9% 0.6% 6.0% 0.3%

The Indian television industry has grown rapidly, especially since 1991, which saw the
beginning of satellite broadcasting in India. This growth was also aided by the economic
liberalization program of the Government. The growth of the satellite television audience saw
proliferation of a number of satellite television channels offering more choices to media buyers
and consumers of entertainment. Thus, the television broadcasting business, which started off as
a single government controlled television channel, now has over 300 channels covering the
Indian footprint, resulting in growing ad spends on this medium. Reforms and proliferation of
private players were the key reasons for this rapid growth of the share of television in the
advertising industry.

Radio Advertising
Radio is still the king when it comes to getting your music. The best way for a new band
to get heard by the public and record label executions is over the airwaves.
Paradoxically, radio currently has only a 2.9 per cent share of the total advertising pie in
India. Globally, depending on country, radio has a 5 per cent to 12 per cent share of the
advertising cake. On the higher side are countries like the United States, with 13 per cent,
Canada, with 12.7 per cent and Spain, with 9.1 per cent.
Companies that advertise on FM channels today such as Hindustan Lever (HLL), Dr
Morepen, Amul, Castrol, Santro, Britannia, Parle, DSP Merrill Lynch etc are dominating the
advertising on each one of the FM channels, be it Radio Mirchi, Go 92.5 Red 93.5 or Radio
City.
Today, 70 per cent of the advertising comes from big-budget, national advertisers and the
balance 30 per cent comes from retail. It is a known fact that retail advertising will grow because
radio presents the perfect advertising medium for local businesses in a local environment. But
national advertisers are also operational in the local market, implying that it is as important to
them as it is to a retail advertiser, if not more.
Nevertheless, it is undeniable that radio can be integral in exposing a new artist, new
product or services to new fans and taking a local market to a national level. Accordingly, it is
extremely difficult to obtain meaningful airplay. Putting it bluntly, successful radio promotion
revolves around making and managing relationships.
Radio promotion is an art that demands a certain style you may simply neither have nor
desire to cultivate. On top of that, it can take a great deal of time to make all the contacts and
connections that are required for successful radio promotion.
Advertising agencies that control the national picture will be slow to move on to radio for
creative reasons. They have people who love to make television commercials, but don't have
anybody who knows how radio works. Here, only about 2.9 per cent of the money spent by
advertisers goes to radio, and up till now, all of that went to ALL INDIA RADIO.
However, in revenue terms, money from advertising has gone up. Revenue from
commercials on AIR, including on Vividh Bharti and Primary Channel (including FM) rose from
Rs 393 million in 1990, to Rs 808.4 million in 2000, & Rs. 600 crores in 2002, representing a
growth of about 7.5 per cent per annum.

A clear advantage that radio has is that it can easily target city-based audiences.
This makes sense if the advertiser, like a food chain that is opening an outlet in Mumbai, wants
to target a specific audience. In such cases, it does not make much sense to advertise on TV, and
the print medium is too expensive. Radio is the best bet for such small-scale promotions. It is
also aptly suited for local promotions, and once audiences can be targeted, it has tremendous
potential to eat into local mediums.

Consumer opinions
The evidence from the qualitative research is that young people feel their local FM station is
aimed at people like them, but the advertising is not - they feel, probably quite correctly, that
most advertising is aimed at adults.
Because radio is a real-time intrusive medium, they have to sit through the full length of any ads
which are for irrelevant products. There was evidence of three sorts of memories:
Relevant : This includes Ads which mentioned areas or names of specific interest, e.g.
films, outlets selling favoured brands, concerts
Vague/ not relevant: This includes memories of ads for local garages, cars and insurance
companies - little or no specific detail remembered
Sonic Brand Triggers: Much evidence of children's ability to pick up on musical Sonic brand
Triggers (SBT’s) and sing them out loud.

Pros and Cons of Radio Advertising

Every medium has special strengths and weaknesses that makes it more or less suited to
special marketing problems of specific advertising. There is no one medium which is ideal for
advertisers or every situation. Radio has a number of characteristics that makes it an ideal vehicle
for numerous advertisers as either a primary or secondary medium. Also, there are certain
disadvantages of this media which need to be considered.

Advantages of Radio

1. Largest Reach and Frequency

Radio offers an excellent combination of reach and frequency. The average adult listens
more than 3 hours a day, radio builds a large audience quickly and a normal advertising schedule
easily allows repeated impact on listener. 90% of India has access to radio which is unmatched
by any other media. Radio is not only the medium of hearing news but also is a source of
entertainment and advertising for the rural masses. Radio also reaches to uneducated village folk
who do not read print publications. At the places where the literacy rates are low where people
hardly read newspapers and radio is the only medium that they can understand. They can’t afford
a TV set. Therefore radio is more popular.
2. Broadly Selectivity
Specialized radio formats with prescribed audiences and coverage areas enable
advertisers to select the market they want to reach. From a marketing perspective, radio has the
ability to reach prospects by sex, age group, ethnic or religious background, income group,
employment category, educational level or special interest with a format that adds even greater
dimensions to its already strong personal communication environment.
Radio’s high overall reach and its ability to provide numerous formats make it a
multifaceted medium. Because of the relatively low cost of production, advertisers are able to
adapt commercials to the various stations then buy, a strategy that would normally be
prohibitively in television.

3. Cost –Efficiency
Radio is the least cost medium and it helps to reach mass audience with various
backgrounds. Radio offers its reach frequency and selectivity at one of the lowest costs per
thousand and radio production is relatively inexpensive. National spots can be produced for
about one tenth the cost of a TV commercial, and local stations often produce local spots for free.
Also, radio ads can be produced very quickly.

4. Creativity and Flexibility

Radio is the most flexible medium because of very short closing periods for submitting
an ad. This means an advertiser can wait until close to an air date before submitting an ad. With
this flexibility of simple formats such as voice only can be created almost immediately to reflect
changing market conditions or advertisers can take advantage of special events or unique
competitive opportunities in a timely fashion.

Radio also offers timeless, immediacy, local relevance and creative flexibility. The
personal nature of radio, combined with its flexibility and creativity, makes radio the choice for
numerous product categories. Copy changes can also be made very quickly.
 While radio may be one-dimensional in sensory stimulation, it can still have powerful
creative impact. Radio has been described as the theatre of the mind. The musical formats that
attract audiences to radio stations can also attract attention to radio ads. Audiences that favor
certain music may be more prone to an ad that uses recognizable, popular songs.

5. Proximity to Purchase
The mobility of radio and its huge out - of - home audience gives the medium an
advantage enjoyed by few other advertising vehicles. In the competitive environment facing
most companies, it is imperative that brands achieve consumer reinforcement as near as possible
to the purchase decision. Radio’s daily frequency offers scope for continued messages and hence
the consumers are more likely to remember that product and consumer lend up buying that
product.

6. As a Complement to Another Media

In some cases, radio is the primary medium for local advertisers. However for national
advertisers and most large local and regional firms, radio is most often used as complementary
medium to extend the reach and frequency of primary vehicles in their advertising schedule.

A fundamental marketing strategy for radio has been its ability to successfully work with
other media to increase reach and frequency or to reach non-users and light users of other media.
The radio industry realizes that the bulk of its revenue comes from advertisers who use radio as a
secondary medium.

7. A personal medium
The human voice is the most personal means of communication. Radio gives the
advertisers the opportunity to take advantage of the right combination of words, voices, music,
and sound effects to establish a unique “one-on-one” connection with prospects that lets you grab
their attention, evoke their emotions, and persuade them to respond.
 Radio can be targeted by lifestyle formats and is more efficient than other media from a
cost and production standpoint. As a result many advertising agencies will move their budgets
into radio.

Disadvantages of Radio

1. Misunderstanding
Sometimes there might be a misconception regarding the radio ad as it is only heard. In
television the chances of such misconception is less, as it is audio as well as visual.

2. Poor Radio Attentiveness

Just because radio reaches audiences almost everywhere does not mean that everyone is
paying attention. When a consumer is listening while doing some work or traveling in a car, he
or she often switches stations when an ad comes and divides his or her attention between the
radio and road.

3. Fragmented Audiences
The large number of stations that try to attract the same audience in a market has created
tremendous fragmentation. If a large number of radio stations compete for the same audience,
advertisers who want to blanket the market have to buy multiple stations, which may not be cost
effective. However, in radio’s quest to continue to fine tune its reach, some advertisers wonder if
radio is offering too many narrowly defined options. For those product categories with broad
appeal, it is difficult to gain effective reach and frequency without buying several radio stations
and networks.

4. Chaotic buying procedures

 For an advertiser who wants to include radio as a part of national advertising program,
the buying process can be sheer chaos. Since national networks and syndicated broad cast do not
reach every geographic market, an advertiser has to buy time in individual markets on a station-
by-station basis. This could involve dozens of different negotiations and individual contracts.

5. Short Lived and Halfhearted Commercials

Radio commercials are brief and fleeting. They can’t keep like a newspaper or a
magazine ad. Radio must compete with other activities for attentions, and it does not always
succeed. Only 20 % of time availability restricts the frequency of message exposure.

6. Creative Limitations
The audio-only nature of radio communication is a tremendous creative compromise. An
advertiser whose product depends on demonstration or visual impact is at a loss when it comes to
radio. Many advertisers think that without strong visual brand identification the medium can play
little or no role in their advertising plans.

7. Limitations of Sound
Radio is heard but not seen, a drawback if the product must be seen to be understood.
Some agencies think radio restricts their creative options.

8. RJ needs training
It is very important that the Radio Jockey is trained enough to deliver the ad. Sometimes
the voice really matters. If the voice is irritating then there is a chance that the campaign may
flop.
9. No proper research available
In India, there is no proper research has been available on the area of radio listening,
which will be very helpful for the advertisers to decide them on advertising plan and budget and
other matter. Therefore, there could be a problem for the marketers in the sense that they might
advertise on wrong channel at a wrong time.
 Types of Radio Advertising:
1. Network
Advertiser may use one of the national radio networks to carry their messages to the
entire national markets simultaneously via stations that subscribe to the networks programs.
Networks provide national and regional advertisers with simple administration and low effective
net cost per station. The advantage is less paper work and lower cost per station. Disadvantage
includes lack of flexibility in choosing affiliated stations the limited no. of stations on a networks
roster and the long lead times required to book time.

2. Spot Radio
Spot radio affords national’s advertiser’s great flexibility in their choice of markets,
stations, airtime, and copy. They can tailor commercials to the local market and put them on the
air quickly – some stations will run a commercial with as little as 20 minutes lead time.

3. Local Radio
Local times denote radio spots purchased by a local advertiser for local market. It
involves the same procedure as national spots. Radio advertising is either live or taped. Most
radio stations use recorded shows with live news in between .Likewise, nearly all radio
commercials are pre recorded to reduce cost and maintain broadcast quality.

4. Sponsor Programme
Here the advertiser sponsors the whole or part of the programme. The RJ informs the
audience about the sponsored company throughout the programme.

5. RJ Mention/What’s On Mention
 Here the Radio Jockey [RJ] informs the audience the information given by advertiser
about the new product launch, sale, exhibition going on at certain place etc.

Radio Stations Divide Their Days And Their Rates.

Radio stations divide their rate cards into dayparts .The exact divisions vary from station to
station.
6 am -10 am Morning drive
10 am – 3 pm Daytime
3pm – 7pm Afternoon drive
7pm- 12am Nighttime
12am – 6 am All night

Rating services measures audiences for only the first four day parts because all night
listening is very limited and not highly competitive. Heaviest radio use occurs during drive times
(6-10 am and 3-7pm) during the week (Monday- Friday).
This information is important to advertisers because usage and consumption vary for
different products. For example, radios morning drive time coincides with most peoples desire
for a steaming, fresh cup of coffee, so its great time for advertising coffee brands. For the
lowest rate , an advertiser orders spots on a run of station (ROS) basis, similar to the ROP in
newspaper advertising .However, this leaves total control of the spot placement up to the station.
So most stations offer a total audience plan (TAP) package rate, which guarantees a certain
percentage of spots in the better day parts if the advertiser buys a total package of time.
 Length of Spots

The radio commercials in the test reels consisted of several different spot lengths, ranging
from 15 to 60 seconds. The longest commercial played on the radio is 120 seconds. Those
however are rare. In theory, one could assume that the longer a spot, the better it will be
remembered or at least, the more chance there it that it will be heard. Research on television
commercials proved that this theory holds true for the medium television: a doubling or tripling
in spot seconds results in duplication in recall.

The spots for advertisement can be for 10 sec, 20 sec, 30 sec and 60 sec. In General,
10 second spot should contain 25 words
20 second spot should contain 45 words
30 second spot should contain 65 words
60 second spot should contain 125 words

If you’ve never written a spot, 30 seconds sounds like an impossibly short time to get
your message across. But take a stop watch and time some spots on the air; you’ll see that quite a
lot can be accomplished in a short time. In fact, you may find that 60s, unless very well written
and well produced, sometimes seem a bit too long.
A 60 does allow you more variety in music, sound effects, and voice and can be useful for
political message, the announcement of a new or little-understood service, or other sports with a
information/education content.
30 is usually 70 to 80 words long, and a; 60 around 150 to 160 words. The cost of a: 30 is
usually about 60% to 75%.
 Some stations no longer charge a separate rate for: 30s and: 60s. Instead, they charge a
unit rate. In other words, a: 30 costs the same as a: 60. Obviously, this is one case where you
might want to use a: 60 to take advantage of the “free” air time. Check the rate cards of the
stations you are interested in, or ask your sales rep.

Buying Radio Time

1. Station Rates
While buying procedures to achieve national coverage may be chaotic, this does not mean
they are completely without structure. Although the actual buying may be time consuming and
expensive if many stations are involved, the structure is actually quite straight forward.
Advertising time can be purchased from networks, syndications, or local radio stations.
Advertisers generally invest most heavily in local placement. About 80% of annual radio
advertising is placed locally. About 15% is allocated to national spot placement and only 5% is
invested in network broadcasts. Many stations have local rates for Individual Business and
National Rates for Agencies.
Advertiser may use one of the national radio networks to carry their messages to the
entire national markets simultaneously via stations that subscribe to the networks programs.
Networks provide national and regional advertisers with simple administration and low effective
net cost per station.

2. Your Dayparts Buying Options

Most stations offer several options for buying air time:
a) Buying by specific dayparts
b) Buying packages
c) Buying sponsorships or adjacencies
a). Buying specific dayparts
This relates to the time period of purchase. There are five basic dayparts on basis of
which advertiser can choose. The time period decision is based primarily on a demographic
description of the advertisers target audience. Drive-times dayparts attract a mostly male
audience, while daytime primarily female and nighttime is mostly teen. This information
combined with programming formats, guides an advertiser in a buying decision.
Putting half your sports into drive time and half into midday is a very safe strategy.
Weekend sports can also effectively reach teens.

b). Buying packages

As with magazine buying, radio advertising time is purchased from rate cards issued by
individual stations. Run-of-stations ads- ads that stations choose when to run- cost less than ads
scheduled during a specific dayparts. The price can also increase if an advertiser wants the ad
read live on the air by a popular local radio personality hosting a show during a day part.
Buying packages is an easy, usually low-cost method. Marking a package buy is called
buying Run of Station (ROS), Total Audience Plan (TAP), or Best Time Available( BTA). This
means simply that you pay to buy a package of sports at a flat rate and the station decides (within
certain specified limits) when the sports will run. Stations will usually guarantee to divide your
sports fairly between drive times and other dayparts.

c). Sponsorships or adjacencies

A sponsorship is just what its name implies. You are associating your company name with
a specific program. The advertisers sponsor the whole or part of the programme. The RJ informs
the audience about the sponsored company throughout the programme. “……………. Is brought
to you by………”
An adjacency is the next best thing to a sponsorship. If you buy an adjacency, your ad
will run every day just before or just after (in other words, adjacent to) the program you specify.
Other fixed-position spots are also available. For example, you may specify that you want
your spot to run at 6:13 a.m.every Monday, Wednesday, and Friday.
Sponsorships, adjacencies, and fixed positions go for premium rates. Sponsorships on
top-rated shows can cost up to twice as much as other spots in the same dayparts. Having your
name associated with a particular show or event can do a lot to reinforce your positioning, and
these premium spots can be so powerful that you may be able to run far fewer spots than you
otherwise would, spending less to achieve the same impact.
Sponsorships are like marriages; they’re only for people who are ready for a long-term
commitment.

3) Frequency
Radio, like most media, requires repetition to have impact. As a general rule, a minimum
of 20 spots per week should be aired. There are scheduling strategies that help increase the
impact of the spots you place.

Flight and schedule are two words you may hear your radio sales representative use when you
plan your advertising. A flight is a group of ads. (“I’m running a flight of 80 ads this month.”) A
schedule is the long-term version of a flight. (“I run a schedule of 20 ads a week, six months out
of the year.”)

4) How many stations do you need

Just as you should never run too few spots, you should also not run on too few stations. But
how many is enough?Generally, you should run on at least two or three stations, but that varies
depending on your audience and the number of competing stations in the market.
If your target and audience includes both younger and older people, you may need to buy
two or more stations with widely different formats.
There are, however, times when one station will suffice. If your audience is business
people, and you can afford to buy drive time on the dominant news/talk station in the market,
that may be all you need to succeed.
To really learn who is listening to your spots, survey the local market. These surveys
break the audience down by age and sex, break the listening week down into segment, and then
tell you how many listeners each station had in each category. Similar survey on listenership has
been conducted by IMRB (Indian Market Research Bureau)
 Producing Radio Commercial
Producing a radio spot can be a lot of fun advertisers often say it’s the most
fun they ever have in advertising. It can also be simple and inexpensive.

There are three basic elements to work with: the announcer’s voice, music, and sound
effects. Production can be done in the station’s own studios or in an independent production
house. Stations are usually well- equipped to produce spots, and they often employ young,
creative people whose fresh ideas will keep your spots from sounding like everywhere else’s.

It all begins with a good script, which means not just the words, but the combination of
words, music, and sound effects. All these are part of the script. Your spot can be clever or
straightforward, but it must grab the listener’s attention in about three seconds, and it must not
leave the listener wondering, “whose spot was that, anyways?”

The following are some of the factors you should have in mind from the first moment you
sit down to plan your spot.

1) The Voice
There are two factors concerning voice. First, you should use a voice that is appropriate for
your image.
There are two good, low- cost options for achieving this, and one higher- cost option:
a) Using local radio talent
b) Using an amateur voice
c) Hiring professional voice talent.

a) Using local radio talent

If station produces the spot, one of their on-air people risk having the voice be so familiar
that the listener doesn’t pay attention. If the ad runs only in drive time, one can have the
 midday announcer do the honors. Get the least familiar voice available. Listeners will be less
likely to tune it out.
Female announcers can also be used. Studies have shown that women presenters are just
as effective as men; but only a small (but increasing) percentage of all broadcast sales
presentations are made by women.

b) Using amateur voices

One great thing about radio is that even an untrained voice can be very effective. In fact,
the less the voice sounds like one of the regular announcers, the better.
A woman’s voice, a child’s, or even your own can make listeners stop and pay attention
simply because it’s not what they’re expecting to hear. A word of caution: Amateurs can
sound stiff and false.

c) Using professional voice talent

If a very sleek production value is needed hire voice talent from another station, the local
community theater or, in larger markets, from a talent agency. Celebrity voices can sometimes
be hired.

2). Music
The power of music can’t be overemphasized. There are several options for putting music
into your commercials:
a) Have original music produced.
b) Use free music from the station’s library.
c) Get permission to use an existing recording by a known artist. (But It’s difficult
and expensive to obtain the rights).
d) Buy canned music (sound alike) in the style of many popular composers in all
large markets who supply such productions for a modest charge.
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