Radio stations give a big thumbs-up to RAM

Revenue inflow to increase by 50% and radio ad rate to go up by 10-15%

MUMBAI: The release of the first Radio Audience Measurement (RAM) last week is set to change the Rs 400 crore radio advertising market.

With RAM promising clarity on listener reach, ad spends and peak listening hours, media planners and radio stations stand to benefit a great deal.

Broadcasters and media planners believe that, by March-April 2008, revenue flow into the radio industry will go up by 50% and ad rates by 10-15%. RAM differs from its predecessor — Indian Listnership Track (ILT) — in it that it follows a diary method — a panel-based study that tracks radio audience behaviour in different markets round the clock for 365 days.

But how exactly will RAM help the industry?

Anuj Singh, station and marketing head, Red FM, Mumbai, has an answer.

“The richness of data that RAM provides would enable a stronger sales pitch as well as a robust evaluation from the planner or buyer. Now that there is a reasonably stable measure (and weekly updates) of what radio can deliver, we hope there will be a more rational approach to buying the medium and probably a greater piece of the advertising pie,” he said.

Agrees Apurva Purohit, CEO, Radio City.  “Advertising on radio was never taken seriously as there was no measurement to prove its efficacy of the media plan. However now that we can do post evaluation through RAM, the industry will benefit,” he said.

The size of the annual advertising spend on radio is estimated to be above Rs 400 crore. Out of this, corporates account for 70% and retail advertising 30%.

During the ILT era, stations getting adverse reports had to wait for a quarter (the periodicity of the ILT) before hoping for a change in fortunes.

“We foresee a change in the rates operating in the market - by this we mean rate correction rather than instability. Stations that truly deserve a better deal now have an opportunity to ask for it. Stations that command a decent share and still remain cost-effective will prosper,” Singh said.

Now on, the RAM data will be released every Wednesday. At present, it covers only Delhi, Mumbai and Bangalore. RAM will include Kolkata by early 2008.

RAM is an initiative undertaken by TAM Media Research and Nielsen Media Research in collaboration with IMRB International.

According to RAM spokesperson, “The industry — marketers, media agencies and radio channels —should now be able to reap the same benefits for radio as well. Currently, radio contributes 3% of the total ad pie.

With RAM in place, three years down the line, measurement should bring in more business commitment to radio.”

Tarun Katial, chief operating officer, Big FM 92.7, said, “What is measured is what is bought. Therefore measurement is good for any kind of proposition.

Although we have a fixed rate card in terms of advertising — month on month we have seen a quantum growth of 15-20% in ad rates.

Going forward, there will more hike and correction in the ad rates and it will be different for each radio station and each city.”