MUMBAI: The radio industry has received praise in the KPMG report released at FICCI Frames 2014. In a sluggish economy, the industry outperformed the growth compared to other traditional media, even without Phase III.

A major factor that improved the growth for the radio industry was the pressure on clients to re-evaluate their media mix, along with advertising budgets coming under pressure. Another reason for the growth is attributed a tendency to shift focus from nationwide pure brand building to more tactful, local, focused promotional targeting. The reach of radio accompanied with affordable pricing had attracted advertisers to radio.

According to the KPMG report, the overall revenues of the listed radio players exhibited double digit growth rate over the previous year which was approximately 12-15 per cent. The report also stated that the growth was driven equally by volume enchantments in Tier II and Tier III cities and increase in ad effective rates.

In 2013, Compound Annual Growth Rate (CAGR) was steady as smaller players turned profitable during the year (as their network matured).

Real estate, FMCG, Government, Retail, and Media and Entertainment are categories which increased their spending on radio.

'FM radio is not an add-on but an integral part of media planning,'stated the report which is a positive change in the attitude towards this traditional medium.

Some key trends in the radio industry are the social awareness programs on radio and non-music based programming on air. Another new element in the radio industry is the mobile phone explosion and its convergence with FM today, which is 80-90 per cent of mobile users access the radio on phones.

According to the report, the way ahead for the radio industry is innovation and programming; Consolidation of Advertisement Avenue by radio; localised and targeted marking and more research.

The other area which is creating waves in the industry and also held the space in the report is the digital radio. The report highlighted that penetration of internet has grew by 17 per cent. Radio is exploring avenues of Internet radio such as an online streaming, podcast and platforms such as Youtube and Sound Cloud to expand their reach.

Predicting the coming years, the report indicates that like in 2013, the FM radio industry is expected to outspace the growth of overall advertising industry. With a forecasted CAGR of 16 per cent till 2018, industry revenues are expected to more than double.