Television Audience Measurement Media Research, in association with Nielsen Media Research and IMRB International, is set to launch a new division, Radio Audience Measurement to track radio listenership.
This will be the only body in the country that will collect radio data on a weekly basis across three cities, Mumbai, Delhi and Bangalore. Currently, Indian Listenership Track is the only measurement system in place that provides radio listenership data.
It has drawbacks as it follows the 'day-after recall' methodology. Here analysis is based on which radio station a respondent was listening to on the previous day.
Industry experts observed that a respondent's reply is usually based on which radio station's name he could recall instead of the station he was listening to.
Besides, this data is tracked only on a quarterly basis across Mumbai, Delhi and Kolkata.
Radio players believe that RAM will provide accurate and frequent data. "RAM will help us fine-tune our programming as and when a station falters. We won't have to wait an entire quarter to know where and why we went wrong," said Anand Chakravarthy, national marketing head, Big 92.7 FM.
Media buyers view this as a significant development for the radio industry. "An advertising medium (radio in this case) without a measurement system remains an experimental medium. However, with RAM the radio industry will no longer remain an experimental medium," said Manish Porwal, managing director (India- South & West), Starcom.
Experts also believe that advertising spends on the radio sector will rise. "With accountability and frequency being addressed, more corporate biggies will consider radio as an advertising medium," said a media buyer.
As of now the top 10 radio advertisers include Hindustan lever, Reliance communications, MTNL, Life insurance Corporation of India, GTM Builders and Promoters, Bharti Airtel, Maruti Udyog, among others.
According to AdEx India, radio advertising last year contributed around 3 per cent of the total advertising pie, estimated to be Rs 16,300 crore (Rs 163 billion) as against 2005's contribution of 2.4 per cent (out of the total Rs 13,200 crore or Rs 132 billion advertising revenue). It is further expected to increase to 5.5 per cent by 2011.
With 700 plus radio stations expected to roll-out by 2010, a measurement system is good news for radio stations and RAM has already found takers. Sources said that three radio stations, Big 92.7 FM, Red FM and Radio City have subscribed for RAM's data.
The Indian radio industry is estimated to grow from Rs 650 crore (Rs 6.5 billion) this year to Rs 1,700 crore (Rs 17 billion) by 2011, with a cumulative growth rate of 28 per cent over the next five years.