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. Last Updated: 07/27/2016

Car Owners Drive Radio Ad Sales

A select club of radio advertisers know they are catching consumers just where they want them: in their cars.


Radio may lag far behind its richer television and print media counterparts in pulling in ad revenues, but radio advertising is unique in its ability to capture Russia's mobile -- and, ideally, upwardly mobile -- population of car owners and drivers.


"You can hypothesize that low income isn't represented among drivers -- it's the middle and high income [groups]," said Tatyana Yeliseyeva, media research agency for the BBDO advertising agency.


The demographic group best represented among drivers, she said, is "men with large incomes." To sell cigarettes, vodka and "men's products," she said, radio can be an effective venue.


According to Andrei Fedotov, the executive director of the Russian Public Relations Group media research service, a far greater proportion of wealthy people listen to the radio than watch television.


To reach this audience, advertisers are turning especially to FM music stations, where wealthy listeners are found in the greatest concentration. These stations have been able to raise ad rates to capitalize on the climbing demand, and the result has been a mini-boom in radio advertising.


According to figures from the Comcon 2 marketing agency, the greatest share of Russian listeners were tuned to the traditional, mid-frequency stations Radio Rossii and Mayak. Yet the largest ad revenues went to these stations' smaller counterparts, the FM stations Russkoye Radio, which broadcasts Russian contemporary music, and Europa Plus, which airs a mix of Russian and foreign pop.


Figures from the Russian Public Relations Group show that according to official price lists and excluding discounts, Russkoye Radio had the most advertising business in April, selling $1.4 million worth of airtime. Europa Plus was right behind with $1.12 million, followed by Radio Maximum with $636,000.


These stations, observers say, are the ones that pull in a wealthy subsection of radio listeners.


In-house research by Europa Plus showed that nearly 40 percent of that station's listeners have debit- or payment-card accounts. According to research by Comcon 2, the clear majority of listeners on those top three radio stations were males, and were judged frequent shoppers.


And, in many cases, they own and drive cars. People who listen to music radio in their cars as they commute to and from work represent the upper end of the country's wealth curve, from moderately well-supported car enthusiasts and members of an emerging middle class to bank presidents and other decision-makers.


One indicator of the importance of the car audience is the prevalence of auto-related businesses among top advertisers: Panavto and Arbat-Avto auto service companies appear alongside large advertisers such as Coca-Cola.


It comes as no surprise that Mobile Telesystems and Beeline cellular communications -- two companies that would naturally target wealthy listeners for their mobile telephone systems -- are among Russia's top radio advertisers.


"For us, this is the most effective way to advertise," said Dmitry Timoshenko, Mobile Telesystems' director of business development and advertising. Russian Public Relations Group figures indicate that Mobile Telesystems spent nearly $150,000 on radio advertising in March and another $136,800 in April.


According to the Russian Public Relations Group, radio advertising falls far behind other media sectors in total ad revenues. The research company estimated that if ad time sold at official price-list rates, radio stations would have brought in $6 million for April, compared to an estimated $32 million in print advertising and $100 million for television.


However, the top stations' ad sales are apparently on the upswing: April ad sales figures for Russkoye Radio and Europa Plus represent a 13 percent and 4 percent increase, respectively, over March figures for those stations.


Russkoye Radio reported that its advertising rates have tripled since the station went on the air a year ago, from $90 to $270 for a 30 second prime-time spot.


Radio prime time, from 9 a.m. to 11 a.m., is the biggest dead time for television. Moscow radio stations said advertising for that time slot is sold out far in advance, leaving radio ad sales representatives to try to sell less expensive spots that will reach fewer listeners.


Advertisers have been reluctant to take up time in other slots, however, and in response some stations have moved toward opening up new channels, aimed at narrower audiences, that will provide more prime-time space.


At the beginning of May, Russkoye Radio launched 102.1 Classic FM, a new station airing Western classic rock. For its part, Europa Plus has launched Radio Retro, which plays Soviet hits from the past 50 years.


Although the audience may be wealthy, radio commercials can carry relatively modest price tags.


The production price for a simple informational commercial usually runs from $250 to $500 for a 30 second spot, depending on the station, while the cost of a "mini-masterpiece" with music and computer enhancement can cost an advertiser as much as $5,000.


Broadcasting a commercial -- at $150 to $270 for 30 seconds -- is not quite as expensive as making one. Radio sources stressed, however, that a commercial must run numerous times daily for maximum effect.


Stations may also package ads to run simultaneously on regional affiliates: Europa Plus, for example, can broadcast commercials on all of its 69 local stations, for a charge of around $410.


But some observers questioned the efficiency of airing a commercial in several markets simultaneously.


Reginald Thomas, the director of Radio on the Seven Hills, with Russia's sixth-largest listening audience, told Kapital that such an approach would never work in the United States, where small businesses, stores and restaurants generally broadcast their commercials on stations that reach local customers.


"New York residents wouldn't laugh at a joke for residents of Los Angeles, and only an odd store owner in Brooklyn would place a commercial on the air in Washington," Thomas said.