Radio reaffirms its value in the market

The rush of new and exciting media choices notwithstanding, radio is managing to hold its own in Asia. With the exception of China, Indonesia and Thailand, radio reaches more than 90 per cent of the region’s population in an average week, according to Nielsen Media Research’s RAM (Radio Audience Measurement) service. Following drops between 2006 and 2007, the time spent listening has also stabilised, at around three hours a day. 

Against this backdrop, several markets stand out. India is the most notable, where a government programme to open the medium to private investors has sparked a major revival. The mood over in Malaysia is somewhat less buoyant, but, like India, the medium continues to attract new investment and radio stations have been quick to reinvent themselves to stay relevant. 

Station owners in China, meanwhile, have less to be happy about, with the lowest penetration and listenership rates in the region, but media buyers say the medium remains a good vehicle for many advertisers.

The industry bottom line? Talk of the eminent demise of the humble radio are extremely premature.

China Radio penetration in China may well be growing as more cars hit the road, but time spent listening is on a downtrend as other media capture the Chinese imagination. 

A four-city summary of Nielsen’s RAM study shows radio’s reach in Beijing, Shanghai, Nanjing and Guangzhou up from 53.5 per cent in 2007 to 66.6 per cent in 2008. However, time spent listening slid from 7.3 to 5.4 hours in the same period.

“This is similar to most other countries as people are spreading their time amongst all media choices and other activities,” says Mark Neely, Asai-Pacific director for radio at The Nielsen Company. “TV time spent viewing is also decreasing and in most cases at an even greater rate than radio listening.”

Media buyers say that radio in China is expected to lose further ground to online, mobile and out-of-home, but add that it will nevertheless remain a relevant advertising medium, particularly given the diversity of the market.

“Radio stations provide the most localised content, which is important in China with so many different ethnic groups, and cultural and language differences from one province to the next,” says Malcolm Hanlon, CEO of Zenithmedia China.

“Only radio can provide a local flavor on a minute by minute basis. Other media such as TV, internet and print are far too broad to achieve such a local flavour.”

Therein lies the core of radio’s appeal to advertisers — it is the ideal medium to reach the thousands of smaller cities in the country without blowing the budget.

“For some advertisers, to do TV everywhere is prohibitively expensive so, as they start to build their sales in tier three, four or five markets, radio is an excellent cost efficient entry point,” says Hanlon.

Even so, for media and creative agencies, working with radio in China presents several challenges. 

Planners and buyers dealing with a multitude of small stations outside the big cities often need to ensure that the spots bought actually run.

Creatively, advertisers remain conservative and advertising is limited to the standard 15- or 30-second spots, says Kweichee Lam, head of copy at Ogilvy & Mather Beijing.

“Most advertisers think of radio as a very small, secondary medium, and since radio stations themselves are mostly state owned, they don’t really have to think about making a profit,” he says.

Content wise, most stations continue to target the elderly with traditional fare like Chinese comedy, drama or Peking opera.“They have a steady listener base, and we see quite a lot of product inserts — for example pharmaceuticals aimed at the elderly,” adds Lam.

The one exciting spot in this otherwise staid tapestry has been the rise of traffic radio across the larger cities, targeting the growing number of car owners and white-collar workers travelling in taxis. “In Beijing, 100 per cent of taxi drivers are radio fans, and this makes it a very good medium to reach people while they are on the road,” observes Lam.

Stations like Easy FM, have young, upbeat DJs and, besides providing all important traffic updates, run quizzes with SMS responses and call in programmes. Listeners may be asked to call in with their opinion on the best way to buy a train ticket, for example.“There’s much richer content on these stations,” says Lam. “It’s not happening across the board, but there are stations which are keeping pace with China’s development.”

India Having staged a dramatic comeback over the last four years, the radio revolution in India is far from over. Waiting in the wings is the third phase of a government licensing programme, which last year propelled the number of private FM stations from virtually zero to 270 stations. A critical aspect of this latest phase will be permission for stations to air current affairs and news programmes, a move expected to add fresh impetus to the medium’s growth.

“Most of it now is songs and music, primarily Bollywood, and some bits from here and there,” says Abhijit Avasthi, ECD for South Asia at Ogilvy & Mather Mumbai. “When news comes in, a whole different kind of audience will start tuning in.”

In the meantime, FM stations, with their young, catchy and casual appeal, are already doing brisk business in attracting audiences.

While penetration has not jumped dramatically, Nielsen’s RAM study notes an impressive increase in time spent listening, a factor that advertisers have taken note of. Indeed, industry estimates are for ad revenue to rise at least three-fold by 2012 to hit US$450 million. “Before, when we were briefed on a campaign, and we were told to think 360 degrees, it only involved TV, print, outdoor and a little bit of the net,” notes Avasthi. “But now, radio is definitely an integral part of the entire campaign.

Other agencies have found the same. “Radio, traditionally, has been used as a support media for brands, especially in high priority markets,” says Sandeep Lakhina, MD for south and west India at Starcom Worldwide. “But the emergence of FM, with its sleek production quality and more youthful content is reaching out to new categories which have not sampled the medium before.”

The medium is also being used in more sophisticated ways, media buyers say, often combined with ground activation, or interactive elements.
“A lot of media planners are waking up to the potential of the medium and are exploring the different ways they can use it, as opposed to just putting in a spot,” says Hans Mathews, partner for client leadership at Mindshare. 

Last year, Radio City moved in this direction with the launch of activations cell Radio City Connect, and Planet Radiocity, which marked its foray into the digital domain.

Mathews estimates that big name brands such as Unilever invest four to five per cent of total adspend in radio. In terms of revenue, half of the average radio station’s earnings would come from big brands, with the bulk of the balance coming from local city promotions.

Creatively too, more resources are being channeled into radio “in terms of clients agreeing to experiment more, and in terms of people putting in better production values when producing radio spots,” says Avasthi. “People are experimenting a lot in terms of formats.”

Malaysia Hip Chinese language station One FM debuted on the Malaysian airwaves in mid-January, the third radio investment by Media Prima Berhad in four years. The country’s largest media investment conglomerate has good reason to be expanding its radio portfolio — Malaysia has some of the healthiest listenership figures in the region.

According to the latest Nielsen RAM study, nine out of 10 Malaysians aged 10 and above tune in to radio weekly, with average time spent listening at a very respectable 22 hours a week.

And, despite the proliferation of new media platforms, advertiser interest remains firm, with radio consistently defending its five per cent share of the ad pie.

Stations are doing all they can to remain relevant in an increasingly crowded and competitive market. With new music releases now debuting on the internet, radio stations have focused on carving a niche as providers of locally relevant information — from traffic and weather reports, to special events and city news.

In addition to relevant content, they have been aggressive in tapping into a host of ground activities to build a physical presence — whether concerts, offsite broadcasts or the launch of a new album, with market leaders Era (Astro) and Hot FM (Media Prima) in the forefront. 

Such moves have encouraged greater interaction between the station and its listeners, and helped to build loyalty, says YeeKiong Teng, a senior manager at Mindshare. “It also allows more touch points for the station to reach its listeners, and eventually provide more legs for 360 degree advertising solutions.”

“Radio has evolved from being just an audio medium,” agrees MEC GM, James Ho. “Today’s radio campaign also integrates online, on ground and mobile aspects. Radio stations are becoming more aggressive in their interaction activities with their listeners via SMS, MMS, calls and fax.” 

Vernacular stations have been particular successful in pursuing new avenues, often at the expense of less savvy English language competitors. 

Teng notes that while vernacular radio stations have been expanding, listenership of English language has declined from 2.28 million in 2005 to 1.9 million in 2008. “Vernacular stations have simply put more effort into developing exclusive content and activities. They will see their growing trend continue,” he says.

Looking ahead, industry members expect radio to continue to hold its own against new media. In fact, “digital platforms could help in extending [radio’s] relevance by making it more ubiquitous, time independent and more personalised,” says Daniel Comar, ECD at Ogilvy & Mather Malaysia.

“Podcasting is also a new form of radio — exclusive, on demand content, highly focused. The need for radio will always be there. However people don’t gather around the radio in the living room to listen to the news anymore. It’s the old concept of broadcasting that’s in decline, not radio.”