From the desk of Strategic Resources For any query, discussion or feedback, please contact Pavan Chandra, Head of Strategic Resources at pchandra@zenithoptimediaindia.com, +91-124-4195100. Office Address: 10th Floor, Vatika Tower, Block-B, Sector 54 Gurgaon -122002, Haryana, India.

Volume: XVII

August, 2008

In these hyper charged times where news comes in as fast as it becomes outdated, we need a source that can keep track of what matters to us. At ZenithOptimedia we have created Wavelength to apprise all of us of the happenings in three areas i.e. 1. Trends in Digital, Retail, OOH, Consumers and the International Advertising 2. Media & Advertising Research 3. Environment

Also included here are innovations and news that ZenithOptimedia is making across its network globally, under three sections 1. ZO Zone 2. Fast Forward 3. Touchpoints.

Simply click on any of the sections on our snazzy control panel and you will have the latest updates at your fingertips. Wavelength will reach you in the first week of every month so that you have information that leads to insights.

Drop in a mail at pchandra@zenithoptimediaindia.com with your suggestions and comments.

 

Emerging Trends: Consumer

 

1. Advertisers now focus on women as a new TG for online advertising – Aug 25

According to the India Online 2008 report by Internet research firm JuxtConsult, of the 35 million active internet users in India, nearly 6.2 million are women, of which working women comprise an encouraging 40% and are considered the best socio-economic profile for advertisers to target. What has also been observed is the fragmented content for women on the net. There are branded communities such as Sunsilk's Gang of Girls, Whisper's Being Girl and Meow FM's Meri Meow. In addition, there are full-fledged women's portals such as Network18's Indiwo.com, Tips4me.com and Femina.in and wide-ranging portals such as Indiatimes and MSN which include sections dedicated to women. Advertisers are thriving on the immense opportunity, offered by the online content targeting women, by creating their own sites which will cater to this growing section of the online audience.   According to advertisers, the sure shot way of targeting women would be through social networking channels comprising sites such as Facebook, Orkut and LinkedIn, as users leave their demographic information on these sites.

 

Source: Agencyfaqs

 

 

Emerging Trends: Digital

 

 

 

2. Mobile advertising becomes a favourite with advertisers due to its interactive element – Aug 20

The Mobile Advertising Report (MAR) credited India with the highest percentage of users who received advertising messages over their mobile phones. According to MAR 2008 data, close to 85% users in India regularly get mobile advertisements as against 51% in the UK and 37% in the US. The mobile advertising revenues, of nearly Rs 50 crore at present (2008), are expected to reach Rs 500 crore by 2011. As mobile phone subscribers in India leap over the 260 million mark in 2008, mobile advertising has clearly become a common feature for the 50 million mobile internet users. An eMarketer research predicts that $16 billion would be spent on mobile advertising globally by 2011, a 1000% increase from 2008.

 

Source: Business Standard

 

 

 

Emerging Trends: Retail

 

 

 

3. Modern retail formats resort to bargains and discount offers to encourage consumption – Aug 12

Inflation has compelled the bargain hunting customers to modern 'value retail' formats such as Big Bazaar, Food Bazaar, and Subhiksha, which have intensified their bargains and discount offers to encourage consumption. Modern retailers are now pushing private labels (lesser priced in-house brands) as consumers are increasingly opting for cheaper brands. Industry observers say that consumers have been hit due to inflation, rising borrowing costs, challenging business environment and the fact that salaries do not keep pace with rising costs. Retail analysts say consumer trends in India mirror global trends where more purchases are taking place at value formats such as Walmart in the US, which is also reeling under recession and inflation. Value retailers are expected to benefit from an economic slump, as shoppers head to discount stores for a better deal. Inflation has also led to retail majors setting aside fresh investment budgets to expand large format value retailing concept stores in tier-II and tier-III cities, as this will yield more return on investments (RoI) than small format stores. Value retailing is a mega-savings-large-format stores concept, where the cheapest branded products and accessories under the best deals are made available to customers. According to Suresh J, CEO of Brands & Retail, Arvind Brands, a division of Arvind Ltd, “The Rs 12,000-crore value retailing concept, which is currently growing at the rate of 20%, has started gaining momentum in India. This market is expected to touch Rs 30,000 crore by 2012”.

Source: The Economic Times, Financial Express

 

 

 

Emerging Trends: OOH

 

 

4. OOH yet again strikes a chord with the advertisers – Aug 08

According to PricewaterhouseCoopers (PwC), the OOH industry grew 25% from Rs 1,000 crore in 2006 to Rs 1,250 crore in 2007. By 2012, PwC expects the industry to be worth Rs 2,400 crore. As consumers’ interface with brands grows beyond the four walls of their homes, OOH advertising promises to be the next big thing. Moving beyond the purview of hoardings and bill boards, OOH now spells out signage’s, street furniture (such as bus shelters), displays and LCD screens in and around retail outlets and malls and transit media like airports and railway stations. With retail outlets, bus shelters, airports and even railway stations getting a facelift, brand managers find these as ideal platforms to showcase their brands to customers.

 

Source: Business Standard

 

 

 

Emerging Trends: Others

 

 

5. Local advertising looks lucrative – Aug 04

India’s media boom in recent years has resulted in a huge increase in news consumption across print, TV and the Internet. Liberalisation has led to an increase in per capita income even in smaller towns, and people’s rising aspirational needs have resulted in the localisation of content. Advertisers believe that localised content provides potential advertisers with a finer and better defined consumer profile, which increases readers' interest, propelling readership and ultimately attracting advertisers. According to Bharat Kapadia of Jagran18, print as a medium was first local and then became national, while TV is now becoming local after making its debut as a national medium. When it comes to the economics of running a profitable business, print wins hands down over TV. TV cannot go too local because the costs involved are higher when it comes to expanding the footprint.

Source: Agencyfaqs

 
 

 

6. Advertisers believe India is an under-advertised country owing to the untapped potential of local advertising and paucity of dominant media players – Aug 04

With an increase in investors’ interest in Indian media companies; advertisers believe that India is an under-advertised country.  The media is yet to reach out to the entire potential target of local advertising which is now being seen as an interesting opportunity for investors. In addition, India geographically presents an opportunity to media companies to offer diversified content such as news, music, movies, sports and cricket; moreover, there is a dearth of dominant media players to realise the full potential of the advertising arena.

 

Source: Agencyfaqs

 

 

          Emerging Trends: International
 

 

 

7. Consumers in the US are interested in advertisements delivered via non-traditional media – Aug 22

A new consumer segmentation analysis from Mediamark Research & Intelligence (MRI) shows that 9% of the US adults belong to the "Ads on Emerging Media Vehicles" segment. These consumers say that they are most interested in advertisements delivered via non-traditional media such as mobile devices and product placement in video games, movies and TV shows. The 9% of the US adults who prefer "Ads on Emerging Media Vehicles" are far more likely than the average adult to agree with the following statements.    

 

 

Source: Center for Media Research

8. According to Integrated Media Measurement Inc., developers of integrated media measurement systems, 50% of the time viewers see online viewing as a "TV replacement” - July 30

 

Source: MediaPost Publications
 

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Media & Advertising Research Watch

 

9. IAMAI and IMRB estimate the Indian online banner advertising market to reach Rs 235 crore in 2007-08 – Aug 27

A report by the IAMAI and IMRB International on the online banner ad market in India estimates the size of the online banner advertising market in 2007-08 to be Rs 235 crore; the market is expected to grow by almost 49% to Rs 350 crore by the end of 2008-09. Of the categories of advertisers, the BFSI (banking, financial services and insurance) category makes up 25% of the banner advertising pie. The other major categories are auto, FMCG (fast moving consumer goods) and consumer durables. The education category is expected to show the fastest growth from 4% to 7%. The report also shows that the online banner ad spend per Internet user is only about $1.20 (Rs 52.50), which could be $1.60 (Rs 70) by the end of the year. The low ad spend on banners could also be attributed to the increased spends in other forms of online advertising, such as social media. The report reveals that people are increasingly noticing online banners. In 2006, 56% of the active Internet users clicked on an online ad. In 2007, this figure was 80%.

 

Source: Agencyfaqs
 

 

 

10. BRIC countries are more driven to surf for entertainment content on mobile internet – Aug 18

According to a report by Nielsen on the mobile internet usage in BRIC countries, these countries are more driven to entertainment content compared to the US and the European markets. The report shows that the top five mobile site categories in India are games (visited by 38% of mobile Internet users); email (33%); entertainment (21%); music (18%) and sports (15%). The report also shows that mobile Internet penetration in India is 1.8%, with the US having the highest penetration at 15.6%, while China stands at 6.8%. The figure refers to the number of mobile users who have accessed mobile Internet at least once, and does not include web based email and instant messaging. In the US and Europe, broad access to media and entertainment has been available for decades through a large fixed distribution infrastructure, and more recently in specialised devices such as iPods, to meet consumers’ entertainment needs. Users in the growing BRIC markets have not had the benefit of broad based content distribution, thereby limiting their exposure, and thus fill the service gap by embracing the mobile’s transition into a personal entertainment platform.

 

Source: Agencyfaqs

 

 

 

AdEx Findings

 

 

11. TV ad volumes of the Biscuits Category grew by 25% during H1 2008 compared to H1 2007.

Source: Indiantelevision

 

 

 

12. TV advertising of Confectionaries Sector saw 8% growth during H1 2008 over H1 2007.

Source: Indiantelevision

 

 

 

13. Print advertising of Two Wheelers decreased by 30% during H1 2008 compared to H1 2007.

Source: Exchange4media

 

 

 

14. Mobile Phone Category witnessed a dip of 45% in print advertising during H1 2008 compared to H1 2007, while TV ad volumes of Mobile Phones grew by 27% during H1 2008 compared to H1 2007.

Source: Exchange4media, Indiantelevision

 
 

 

15. Print ad volumes of the Oral Hygiene Category saw a 38% drop during H1 2008 compared to H1 2007, whereas it saw a 5% rise in TV advertising during H1 2008 compared to H1 2007.

Source: Exchange4media, Indiantelevision

 

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Environment Watch: Advertising & Media

Regulation

 

16. Internet telephony opens wide avenues for India – Aug 18

TRAI has recommended the complete opening up of Internet telephony in India. This would mean that the internet service providers (ISPs) offer unrestricted internet telephony services, a move that will further boost competition in the domestic long distance telephonic calls segment. TRAI is envisaging that this will prove to be beneficial for the customers, as it would be more cost effective. The ISPs have been permitted to provide unrestricted internet telephony which means they can terminate internet telephony calls on PSTN (public switched telecom network) and vice-versa. TRAI has recommended the national long distance (NLD) operators to connect to ISPs through public internet (internet cloud) for unrestricted internet telephony.  The move will permit calls from personal computers to fixed line and mobile phones. Currently, a voice call can travel between two computers but not from a mobile or a fixed phone. This is expected to open huge channels of revenues for ISPs.

 

Source: Indiantelevision

 

17. Government’s approval of the 3G spectrum spells hope for subscribers – Aug 01

Unveiling its policy on 3G, the government allowed overseas players to bid for the 3G spectrum. The floor price has been set at Rs 20.20 bn for pan India 3G auctions. With the introduction of these services, the quality of voice telephony will be improved as the 3G spectrum would enable service providers to provide quality services to a larger number of subscribers. Further, additional value added services will become widely available to the public. It will facilitate availability of e-governance services such as tele-medicine, e-medicine, e-ticketing and e-education through broadband to the large section of rural population.

 

Source: Indiantelevision

 

TV

 

18. TAM rolled out weekly digital TV viewing data – Aug 27

Television ratings agency TAM rolled out weekly digital TV viewing data, filling a gap in the industry that was expected to have a combine of nine million direct-to-home (DTH) and digital cable TV subscribers by 2008-end.  This has enabled broadcasters to monetise their upscale viewers. Television channels who did not find prime space on analogue cable also benefited, as preliminary data from TAM showed that their viewership is higher in digital platforms than what is being captured from the rating system's regular format.

 

Source: Indiantelevision

 

Radio

 

 

19. FM becomes more interactive – July 28

In an attempt to establish an enhanced interactive level with the audience, FM stations have now opted for a phenomenon known as “outdoor broadcasting”, with RJs moving out of radio stations to interact with the audiences. Outdoor broadcasting has now become an integral part of the programming of practically every radio station in the country. According to advertisers, outdoor broadcasting increases brand recall, which is certainly a deciding factor for radio stations, in these days of clutter      and identical content. Besides, FM radio jockeys are semi-celebrities and such initiatives provide them an opportunity to interact with the listeners and further boost their popularity.

 

Source: Agencyfaqs

 

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Touch Points

 

Touchpoints is a unique tool for ZenithOptimedia clients that provide clear actionable metrics for all contact points used in marketing products and services.

 

For a detailed presentation on Touchpoints contact Mr. Pavan Chandra at pchandra@zenithoptimediaindia.com or call at +91-9899-3767-68
 

 

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ZO Zone

  

Beijing Olympics 2008
 

Beijing Olympics - Avg. TVR

Olympics starts with a lowest TVR of 0.08 and went upto 0.20 at its highest level because of the Indian participation in the boxing and wrestling events.
 

 

Abhinav Bindra’s Gold effect on News Channels

Pre Abhinav Bindra - 8–10 August
During Abhinav Bindra – 11-15 August
Post Abhinav Bindra – 16 -24 august

 

Advertising Spend Analysis for Perfumes/Deodorants Category for the Year 2006-07 & 2007-08
 

Monthly Media Expenditure

 

Source: IMRB & AC Nielson
 (Down weighted Fig.)

Perfumes/Deodorants Category – Brandwise spends

       

 

Source: IMRB & AC Nielson
 (Down weighted Fig.)

 

Medium Breakup

 

 

Source: IMRB & AC Nielson
 (Down weighted Fig.)
 

Genre Breakup

Source: IMRB & AC Nielson
 (Down weighted Fig.)

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Fast Forward

   

Social Media and Shopping Behaviour

October 02, 2008

 

Retailers join consumers in the online conversation.

 

Consumers' use of social media is altering the way they make purchase decisions. To stay relevant, retailers must determine how to incorporate social media, such as social networks and blogs, into their marketing strategies.

 

Generation Y (those born after 1979) online buyers are more immersed in online and mobile activities than any other generation, according to 2008 research from shopping comparison site PriceGrabber. Some 85% of Gen Y respondents said they participated in social networking, and 57% reported involvement with blogs.

 

To reach this demographic segment, Web retailers are marketing to them on their own turf. Data from an August 2008 survey of Web merchants sponsored by Internet Retailer found that, of the 39.3% of retail respondents that use social networks, 32% have a page on Facebook, 27% on MySpace and 26% on YouTube.

 

 

 

One way that consumers use social media is to share their customer care experiences with companies and brands. A 2008 study conducted by the Society for New Communications Research for Nuance Communications found nearly three-quarters of respondents choose retailers and products based on others' customer care experiences shared online.

 

The Nuance study identified online rating systems, discussion forums and blogs as the forms of social media consumers believe are the most valuable sources of information. Trusted sources also included family and friends, word-of-mouth and Consumer Reports.

 

 

 

Mobile Value Added Services: A Rs 16,520 crore industry by 2010
IAMAI

According to a report released today by the Internet and Mobile Association of India [IAMAI], the mobile value added services would become a Rs 16520 industry by 2010. The report, prepared by IMRB, estimates that the industry which is worth Rs 5780 crores in June 2008 would grow steadily at 70% to reach Rs 9760 crores in June 2009 and Rs 16520 by June 2010.

 

 

The research also found out that the industry currently contributes 9% to the operator’s revenues which is likely to go up by 12% by 2010.

 

Commenting on the potential of the industry Dr Subho Ray, president, IAMAI said “the significance of mobile value added services has to be in the context of falling ARPUs of the telcos and the arrival of 3G, the first will make the operators to consider value added services more seriously and the second will provide the users with an elevated experience”. “However, in order for the industry to grow to its estimated size it would be absolutely necessary for the telcos and mobile value added service providers to work in true spirit of a partnership. The government, too, needs to set some ground rules for engagement between telcos and mobile VAS companies”, Dr Ray added.

 

According to the report, CRBT/RT constitute 40% of the mobile vas pie in June 2008, up from 35% per cent in December 2006;  while P2P sms constitutes 37% per cent down from 40% in December 2006.

 

Out of the current size of Rs 5780 crores, P2P sms contributes Rs 2140 crores which fully accrue to telcos. The balance Rs 3640 crores is divided between various stakeholders including telcos.

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This tracker has been compiled from external sources and does not necessarily reflect the views of the company.
Links provided will take you to the full articles appended at the end of the file.

© 2008 Zenith Optimedia.

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Full Articles

 

1. Do women click with advertisers online?

Agencyfaqs

August 25, 2008

 

They are the favorite target segment of marketers, but when it comes to the Internet, where are the women? The number of Indian women on the Net is still low, but significant enough for advertisers to take note. So, how seriously are advertisers taking women online?

 

How many are there?

Of the 35 million active Internet users in India, only about 6.2 million are women, says the India Online 2008 report by Internet research firm JuxtConsult. Surprisingly, 42 per cent of these women are educated housewives. Most of them are educated, but have discontinued working for various reasons.

 

Working women comprise 40 per cent of this segment and are the best socioeconomic profiles for advertisers to target. Though almost all women online are well educated and comfortable in English, working women have a higher income, with 19 per cent having monthly household incomes of more than Rs 30,000, 69 per cent coming from SEC A and B, and 25 per cent of them owning a car. Around 13 per cent of the women are students and the rest do not fall under any of these categories.

 

Mrutyunjay Mishra, co-founder and director, JuxtConsult, thinks that the numbers are not too bad. “Considering that the participation of women in the workforce is 11 per cent, these numbers are encouraging.

 

Most of these women are housewives who have left studies or jobs to get married. Also, many of the working women don't have access to a computer at work.”

 

Where's the content?

Content for Indian women is very fragmented on the Net. On one hand, there are branded communities such as Sunsilk's Gang of Girls, Whisper's Being Girl and Meow FM's Meri Meow. In addition, most horizontal portals such as Indiatimes and MSN have sections dedicated to women. Far fewer in number are full-fledged women's portals such as Network18's Indiwo.com, Tips4me.com and Femina.in.

 

Suvarna Goel, marketing manager, Indiwo, says, “I think more women are reading content on the Net as compared to just checking emails or doing small transactions earlier. Indiwo attracts five-six lakh visitors daily. We also have a set of advertisers such as Nina Ricci, Hindustan Unilever Ltd and Amante, who are satisfied with the campaigns we have done for them.”

 

Local sites also have to compete with international sites and other sites on the Internet, especially the social networks.

 

According to exclusive figures made available to afaqs! by the US based Internet research firm, comScore, most of the women's sites visited by the online population in India (men and women) were international. According to the figures, the total number of unique visitors to sites in the women’s category by the Indian audience in June was 4.2 million.

 

Topping the list is Glam Media (which owns the fashion site, Glam.com) with 1.8 million unique visitors. Other portals on the site include iVillage.com, Yahoo!'s Shine (yahoo.shine.com), Conde Nast Publications (Vogue.com, Style.com, Brides.com and others) and Womensforum.com. The only two Indian sites to figure in the top 15 list are Beinggirl.co.in, with 80,000 visitors, and Indiwo.com, with 70,000 visitors.

 

According to Aditya Khanna, business head, ad network, Tyroo (invested in by Yahoo!), “The content online is largely dominated by entertainment (movies and music) and news. On offline media like print and television, this similar content is also consumed by women, so I wouldn’t say that there is less content for the women audience.”

 

Are advertisers interested?

If the content for women is not in shortage, how are advertisers taking it? Not many of them create women specific online campaigns, except for FMCG and lifestyle companies.

 

Chaya Brian Carvalho, managing director and chief executive officer of digital agency BC Web Wise, says, “Advertisers are definitely interested in targeting women online. Since there isn’t enough content being published online targeting women, advertisers have the opportunity and therefore prefer creating their own sites which cater to the audience. Mostly, it's the FMCG companies that are focusing on building good URLs for women.”

 

The agency has designed sites for brands such as Sunsilk, Lux, Silk n Shine and Asian Paints. Not all brands go for this option though. Since there aren’t enough portals for women, advertisers are happy targeting women on social networks and other sites they visit often. After all, online campaigns allow them to pinpoint the exact gender, age group, location and behavior they are targeting.

 

Khanna says, “There are a few sites which one can target solely from a content point of view. Cooking, parenting and health content attract a large number of women. But our most important way of targeting women would be by utilizing data that the audience leaves with a publisher. For instance, this may be done on our social networking channel, which comprises sites such as Facebook, Orkut and LinkedIn, because users leave their demographic information on these. Similarly, one can also do the same by using technology to observe the user’s behavior on our network and predict that the user is a woman.”

 

Advertisers such as financial and mobile companies are also beginning to look at this segment. Women are one of the target customers of HDFC Standard Life Insurance. Sanjay Tripathy, executive vice-president and head, marketing, HDFC Standard Life Insurance, says, “With contextual targeting, we can expose the advertisement to the customer when he/ she is actually consuming relevant content in the media space. Though working women form a small part of the overall online audience, it is still the best medium for us to reach them in a cost effective manner.”

 

Lack of content and low penetration notwithstanding, marketers cannot ignore the sizeable chunk of women on the Internet. As the penetration of broadband in homes increases, they can utilize the targeting power of the medium to talk to an audience which holds the decision making power in most households.

 

 
 

2. Brands latch on to mobile advertisements

Business Standard

August 20, 2008

 

When mKhoj, a mobile advertising platform, launched a mobile campaign for Reebok, little could it dream of 40 million targeted impressions, in just over six weeks, of the ad? But it did precisely that. About  4,50,000 users interacted with Reebok and close to 40 per cent downloaded its mobile content while 15 per cent viewed the featured videos.

 

“This was the closest brand engagement the company could ask for with its consumers on a digital platform,” explains Navin Tewari, CEO, mKhoj. He is not alone. Brands like Lenovo, ICICI, Honda, Smirnoff, United Colours of Benetton, among others, too, have made successful brand connections with mKhoj’s mobile advertising platform. Nitish Mittersain, CEO and promoter of Nazara Technologies, is already making 5 per cent of his revenues from mobile marketing solutions for Indian brands. “We managed revenues of around $5 million last year; we aim to double the figure this year and grow mobile marketing revenues to 15 per cent,” he says.

 

The estimated mobile advertising revenues, at present pegged around Rs 50 crore, could, therefore, very comfortably reach Rs 500 crore by 2011. The growth in this segment will be fuelled predominantly by the rollout of 3G networks, IPTV and high-end gaming on mobile phones, indicates a PricewaterhouseCooper report. Madhusudan Gupta, senior research analyst, Gartner, notes, “In the next two years, we expect more wireless operators to adopt mobile advertising, especially as a medium to reach a younger demographic.”

 

The Mobile Advertising Report (MAR) credits India with the highest percentage of users who receive advertising mobile adverts as against 51 per cent in the UK and 37 per cent in the US. According to the report, mobile internet users are 60 per cent more likely to be open to mobile advertising than the average mobile data user. Asif Ali, co-founder of Mobile Worx, a mobile products and solution provider, adds, “It has become increasingly difficult to talk about the internet, media or marketing, without the conversation quickly turning to mobile phones. Advertisers keep coming back and with larger orders.”

 

On an average, mobile advertisement campaigns range between Rs 42,000 and Rs 420,000. Tewari says advertisers are flocking to mobile due to the high reach and high click-through rates the medium can provide. His company claims to have 50 per cent of repeat clients who want bigger advisement campaigns on mobile platform.

 

As mobile phone subscribers leap over the 260 million mark in India, mobile advertising has clearly become a common element for the 50 million mobile internet users. For Mittersain of Nazara targeted mobile ad campaigns, either text message based or on WAP sites, deliver best value for money. “Most mobile ad campaigns receive 5-6 per cent average click-through rate. But really, that’s no surprise, when you consider the market.”

 

Mobile is like the debut of the internet all over again. “You have messaging, text messaging, mobile web and video. There are as many ways to advertise to a mobile consumer as there are to a consumer on the PC-based web,” says Ali. Regardless of what kind of ad campaign an advertiser is running, mobile can contribute a role to that ad campaign.

 

Considering a mobile device has a limited amount of real estate and one has to present information and content as quickly and as simply as possible, “SMS alerts will continue to grow in popularity but WAP-based campaigns are growing faster,” predicts Mittersain.

 

By the end of 2008, there would be big shifts from the $110 billion spent on TV advertising to mobile and social networks and an eMarketer research predicts that $16 billion would be spent on mobile advertising globally by 2011, a thousand per cent increase from today.

 

Mobile operators including Airtel and Vodafone have been the most active promoters of mobile advertising, creating a flutter among advertisers & brands. Brands have begun to notice the growing numbers and, more importantly, the element of interactivity that mobile can deliver.

 

 

 

3a. Retail giants focus on discounts to perk up sales

The Economic Times

August 12, 2008

 

Inflation-hit consumers are steering clear of discretionary spends to gravitate towards value formats and discount stores to stretch their buying power. The slowdown of growth rates has clipped sales in several high-priced categories like mobiles and apparel by over 20-25 per cent (industry estimates) in the past few months while spends on basic food and home items have grown by over 25 per cent, as per AC Nielsen estimates.

 

Bargain hunters are flocking to modern 'value retail' formats like Big Bazaar, Food Bazaar, Subhiksha and More, which have intensified their bargains and discount offers to encourage consumption. Modern retailers are now pushing private labels (lesser priced in-house brands) even with consumers opting for cheaper brands.

 

"Consumers are demanding higher benefits for their spends in inflationary times. We are now pushing the expansion of our value formats to gear up for the challenging times ahead," said Kishore Biyani of Future Group. The retail group opened over four Big Bazaars in a single day last week to gear up for its massive bargain offerings on 15 August called 'Maha Bachat Ke Paanch Din'.

 

Spends on top household categories rose 25 per cent during January-May 2008 with categories like refined edible oils, toothpaste, washing powder, biscuits, toilet soaps, beverages, packaged atta, breakfast cereals, shampoo and others recording an average growth of 25 per cent plus during the period.

 

KSA Technopak CEO Arvind Singhal said: "I do not think that the impact on purchases is on account of a slowdown. Some of the discretionary products were ridiculously over-priced by retailers and companies are now being forced to correct that. India's growth rate continues to be one of the highest in absolute numbers, only lower than the previous years. Corporates are under pressure from value-seeking consumers and real-time competition. Consumer trends are merely a reflection of the fact that companies are focused more on capacity creation rather than demand creation."

 

Industry observers said that consumer sentiments have been hit owing to inflation, rising borrowing costs, challenging business environment and the fact that salaries will not keep pace with rising costs. Discount formats benefit more during recession and a weak economy with their higher-priced counterparts noting a significant dip in sales. "Discretionary spends are clearly getting to be a challenge for most low and middle income shoppers and even affluent consumers are seeking higher worth for their rupee," said Subhiksha managing director R Subramanyan.

 

Retailers are cross-subsidizing discounts offered on basic purchases by hiking margins on the discretionary spends. "We have also been scaling down costs in our system to be able to offer value. Given our scale, we are in a position to negotiate better with consumer companies to get the best rate for consumers," said Food Bazaar CEO Sadashiv Nayak.

 

Consumers are postponing purchases of big ticket and lifestyle items like durables, apparel, mobiles and accessories in recent times forcing companies to announce pre-season discounts and price cuts. Retailers, however, criticize FMCG companies resorting to what they describe as tactical moves to tackle rising costs and consumer purchases. "Several companies continue to hike prices or lower the gram mage or quantity to manage costs. We see this move hurting long-term demand since consumers tend to switch to more competitive regional and lower-priced brands," sources said

 

Retail analysts say consumer trends in India mirror global trends where more purchases are taking place at value formats like Walmart in the US which is also reeling under recession and inflation. Value retailers are expected to benefit from an economic slump as shoppers head to discount stores for a better deal.

 

 
 

3b. Retailers step up focus on value retail stores.

Financial Express

August 11, 2008

 

As fears of low consumer spending owing to high inflation loom large, retail majors are setting aside fresh investment budgets to expand large format value retailing concept stores in tier-II and tier-III cities. Value retailing is a mega-savings-large-format stores concept, where the cheapest branded products and accessories under the best deals are made available to customers. Suresh J, CEO of Brands & Retail, Arvind Brands-a division of Arvind Ltd, told FE, "The Rs 12,000-crore value retailing concept, which is currently growing at the rate of 20%, has started gaining momentum in India. This market is expected to touch Rs 30,000 crore by 2012.

 

Due to the ongoing inflationary trends, we have started focusing on setting up more large format value retailing concept stores in tier-II and tier-III cities as this will yield more return on investments (RoI) than small format stores." Bangalore-based Arvind Brands is planning to invest Rs 400 crore in setting up 250 large and small format stores in tier-II and tier-II cities. Of these, 30 will be large format Megamart Outlet Centre' stores in top 20 cities in India by 2012. With 16 megamart stores operational in Maharashtra, Arvind Brands has recently opened one of its largest 55,000 square feet Megamart Outlet Centres in Pune after its Chennai store. KE Venkatachalapathy, COO, Megamart said the return on investment in large format stores is double that of small format stores. Hence, the focus is more on large format stores, post-inflation.

 

Competitor Loot ( India ), which operates multi-brand discount stores called The Loot', is launching 20,000 square ft large format discount store at Metro Junction mall in Kalyan, Thane, Mulund, Ghatkopar in Mumbai, apart from Surat and Bangalore. Jay Gupta, managing director, The Loot told FE, "We will be one of the biggest tenants on the ground floor of the 8 lakh square feet Metro Junction mall. There are 40 The Loot stores operational and by March 31, 2009, we will add 60 more stores. We are investing Rs 100 crore." Meanwhile, K Lifestyle-promoted The Grab Store has earmarked Rs 100 crore for setting up 50 new stores, pan-India. According to company officials, plans are on the anvil to set up large format Grab stores in tier-II and tier-III cities. According to Arvind Brands' Suresh, "We will be opening six large format stores this year of which three of similar size will come up in Mumbai too apart from one at Bangalore to be opened shortly. We hope to achieve revenues to the tune of Rs 2,000 crore in the next three to four years." He added, "We have partnered with Oracle Retail for an integrated scalable platform to manage its retail processes from supply chain to stores."

 

4. Ads follow customers to malls, airports, bus shelters

Business Standard

August 08, 2008

 

Over half a dozen agencies vie for the Rs 1,450-crore out-of-home advertising market. Pradeep Guha recently quit as the CEO of Zee Telefilms to set up Street Culture, an out-of-home (OOH) advertising firm. Guha will compete with established players like Times OOH, Percept OOH, Future Media, Anil Ambani’s Big Street and Sam Balsara’s Platinum Outdoor for the Rs 1,450-crore market. Still, he is confident that Street Culture will break-even in around a year. Guha says: “OOH advertising is a cost-effective medium that brands will now look at leveraging.”

 

As consumers’ interface with brands grows beyond the four walls of their homes, OOH advertising promises to be the next big thing. Traditionally, outdoor advertising stood for just hoardings. Today, OOH, as the name suggests, is more than just billboards — it encompasses signages, street furniture (like bus shelters), displays and LCD screens in and around retail outlets and malls, transit media like airports, railway stations etc.

 

With retail outlets, bus shelters, airports and even railway stations getting a facelift, brand managers find these are good platforms to showcase their brands to customers. Sunder Hemrajani, managing director, Times OOH, said: “Infrastructure development is driving the out-of-home business in India. With the ambience getting better, brands want to be present in such places.”

 

Advertisers seem to love it. Rameet Arora, marketing head, Colors, a new Hindi general entertainment channel from the Network 18 group, said: “In a fragmented media environment, it is critical to be always present before the customer, OOH is a potent medium to remind, surprise and engage him.”

 

A Bharti Airtel marketing executive adds: “For a brand like Airtel with pan-India presence, we need to go local and regional. OOH is a medium that allows us to do just that.” According to consultancy firm PricewaterhouseCoopers (PwC), the OOH industry grew 25 per cent from Rs 1,000 crore in 2006 to Rs 1,250 crore in 2007. By 2012, PwC expects the industry to be worth Rs 2,400 crore.

 

The advertising space at the Delhi airport is said to have been sold for around Rs 150 crore for three years to Times OOH. The company will invest around Rs 100 crore in constructing 1,400 bus shelters in Mumbai alone, apart from 300 in Bangalore and 200 in Hyderabad. Each shelter can fetch between Rs 20,000 and Rs 100,000, depending on its location.

 

Big Street has acquired the rights for displays at stations of the Delhi Metro. Apart from that, it owns properties across platforms such as mobile vans, kiosks, light emitting diodes and bus shelters. It plans to invest Rs 200-500 crore in the business within two years.

 

Future Media has tied up with Bharat Petroleum to launch Future Fuel, a television network across 20 petrol pumps in Delhi, which provides an audio-visual outdoor platform to brands. It plans to spend Rs 150-200 crore in 18 months on acquiring new rights.

 

Partho Dasgupta, CEO, Future Media, said: “Brands want to be present wherever consumption happens and as an OOH company we need to be innovative.” Most OOH advertising companies acquire rights to properties such as bus shelters, railways stations and highways through government tenders, while the in-store/mall deals are done directly. The rights given by the government are usually between 5 years and 15 years.

 

However, in case of malls, the company has to go in for revenue sharing with mall owners which ranges between 20 per cent and 40 per cent. According to Percept OOH President Pareek amajor challenge for the OOH industry is the lack of a measurement system. Harit Nagpal, chief marketing officer, Vodafone, adds: “The investment in this medium is based on gut and not on measured effectiveness and reach. If the ad spends’ contribution in OOH is to increase then a measurement system is essential.”

 

 

 

5. The Future of News: Big bucks lie in local advertising

Agencyfaqs

August 04, 2008

 

Does local news translate into local advertising? This was the focus of the second session of The Future of News, a day long seminar organized by afaqs! events in New Delhi. The panel of speakers debated the extent to which news consumption has been growing in recent times, the consequent localization of news and, therefore, of advertising, and whether the increased investment in local advertising was justified.

 

The panel, which included Bharat Kapadia, chief executive officer and managing director, Jagran18; Arvind Kalia, national head, Rajasthan Patrika; and Pramath Raj Sinha, chief executive officer and managing director, 9.9 Mediaworx, stood divided. The session was moderated by Prasanna Singh, chief operating officer, afaqs!

 

The background for the discussion emerged from the fact that the media boom in India in recent years has resulted in a huge increase in news consumption across print, TV and the Internet. Liberalization has resulted in an increase in per capita income even in smaller towns and people’s rising aspirational needs have resulted in the localization of content.

 

Prasanna Singh kick started the discussion by posing the question whether localization of content was all about attracting local advertisers or whether it was a means to get national advertisers to advertise locally?

 

Arvind Kalia of Rajasthan Patrika was of the view that the answer to the question lay in how we defined local news, and the ratio between the investment made and the returns expected.

 

Firstly, said Kalia, when one uses the term local in the news context, one must not forget that the target audience (TG) lives locally, but it thinks globally. Localized content provides potential advertisers with a finer, better defined consumer profile. But at the same time, clarifying what the word local actually implied with reference to content, he explained, “For Rajasthan Patrika, 30 per cent of the content is local, 20 per cent is about the state and its affairs, another 20 per cent is global developments, and the rest is regular subjects such as sports and entertainment.”

 

Kalia said that as far as the profile of the advertiser is concerned, to begin with, local media attract local advertisers such as educational institutes, small retailers, local political bodies such as gram sabhas, village panchayats, and local politicians publicizing their achievements in development projects. The next bunch of advertisers is the state government. The third set of advertisers constitutes PSUs, banks and other national advertisers.

 

Bharat Kapadia of Jagran18 agreed with Kalia that local was a relative concept. He said that segmented local content increases readers' interest, propelling readership, and ultimately attracting advertisers.

 

“Interestingly, print as a medium was first local and then became national, while TV is now becoming local after making its debut as a national medium. When it comes to the economics of running a profitable business, print wins hands down over TV. TV cannot go too local because the costs involved are higher when it comes to expanding the footprint.”

 

Pramath Raj Sinha of 9.9 Mediaworx said he both agreed and disagreed with the views expressed. He argued, “At the micro level, a lot of appetizers exist to provide plenty of local news and, accordingly, media products come on board to reach out to the readers. But there have been cases where media establishments have offered content even in the absence of advertisers, confident in the belief that there exists a market for interested advertisers, which will sooner or later come on board to advertise. When it comes to content, it’s not just local news that the readers are interested in, they want to know what's happening around them.”

 

He added, “But the cost of advertising becomes highly prohibitive when players work in an ad-supported market, making it tougher to justify the economics of the business.” Singh drew the panelists’ attention to the complete neglect of local players and their markets by national media buyers and planners. The common refrain was that the cost of investment was too high when compared to the meager returns achieved on reaching out to the available TG.

 

Kalia responded by sharing some revenue figures with the audience. In 1995, a salesperson used to deliver advertising business worth Rs 2 lakh, which has now increased considerably. If media agencies have reservations and budget constraints in formally entering local markets, they can always get salespersons to work for them on a commission basis, relating their spends to the revenue earned, he said.

 

The real problem, he said, emerged from the preoccupation of media observers with the English speaking markets.

 

They refuse to believe that English as a language commands a readership of only 20 per cent – 80 per cent of the readership of news is in the local or regional segment. This bias is also reflected in the fact that 60 per cent of media spends is spread across the six metros alone. For example, Anandabazar Patrika has as much of a reach among the affluent as any English daily in the metros, but media buyers simply refuse to believe that fact.

 

Kapadia pointed to the slow but gradual shift of focus in the perceptions of advertisers and media agencies. He drew attention to the fact that it wasn’t that long ago that the English media had a 70 per cent share in ad revenue, and that it came down to 64 per cent only in 2006. So, there is some hope when it comes to attracting advertisers to local content and markets.

 

What is more cost effective for a local publication – attracting a national advertiser or a local one? Sinha declared outright that all the major national players bringing out local editions are running them at a loss.

 

In Kapadia's opinion, profitability depended on a number of things. One cannot deny or overlook the need of, say, a telecom major to advertise an area specific scheme aimed at a specified TG. Whether a national advertiser or a local one, both have to look at the market on the micro to macro basis and vice versa.

 

Amidst noises of secondary treatment to local entities, Singh raised the question of why local print editions of most publications are priced higher than most national newspapers. Kalia explained the strategy behind such pricing: “The price difference emerges on account of higher penetration costs. To achieve higher readership figures, the cost per copy comes higher for a local daily in comparison to, say, a national product.

 

Elasticity of demand in local areas leads to the higher price. For example, one copy of Rajasthan Patrika is read by 15 people in a village ‘chaupal’, whereas in the metros, the per copy readership of national dailies is lower because there are more nuclear families. So, the circulation of these newspapers is high and, on the basis of volumes, the national dailies can afford to keep their prices as low as Re 1.” The Future of News was organized by afaqs! events and sponsored by STAR News, Dainik Jagran and Yuva.

 

 

 

6. The Future of News: Investors are gung-ho about media in India

Agencyfaqs

August 04, 2008

 

There are about 60,000 newspapers in India and about 70 news channels. Last year itself, about Rs 1,500 crore were invested in the news space. What makes the media industry so lucrative to investors? At ‘Future of News’, an event organized by afaqs! on August 1, 2008, Salil Pitale, head, media & telecom, Enam Securities, provided some insights.

 

He started with some interesting statistics, stating that the valuation of the listed media companies in India is in the range of Rs 35,000 to Rs 40,000 crore (excluding giants such as STAR India and Times of India, which are not listed; their valuation would add substantially to this figure). “These listed companies today are cumulated to generate revenues which are less than Rs 8,000 crore and profits which are less

than Rs 1,500 crore,” he said.

 

Pitale gave four macro reasons why media companies seem to have traded at a high premium for almost nine years now, and why investors continue to flock to them. The first macro reason, according to him, was that India was an under-advertised country. “The media is yet to reach out to the entire potential target of local advertising. That is an interesting opportunity, which investors look at,” he said. The second reason, he said, could be a controversial one, but a lot of investors believe that consumers are paying to consume media. “The total amount of subscription revenue on television in India is $5 billion, which is two-and-a-half times than the ad spends. There could be a dichotomy that this $5 billion doesn’t come back to the broadcasters,” he said.

 

Also, media companies are looking at new revenue streams. He cited the example of the music industry, which was incurring losses until four years back, he said. The industry has succeeded in turning its fortunes by being innovative and monetizing music through ring tones or playback tunes on the mobile platform. The third reason, he said, was that India, geographically, presents an opportunity to media companies to offer diversified content like news, political, music, movies, sports and cricket.

 

The fourth macro reason was that a lot of investors believe that several pockets in India don’t have many dominant media players. This presents the opportunity to become one of the top two players in these pockets. The investment criteria, according to Pitale, fell into four broad categories – predictability, sustainability, profitability and de-risking.

 

He also presented some case studies of media companies where investors have put in their money. He said that in the case of NDTV, investors looked at ‘Promoter Credibility’. “Names such as Prannoy Roy and their association with STAR News (which NDTV used to produce) were one of the big factors for ICICI Bank and General Atlantic Partners to put in money. Moreover, the company has an extremely talented and credible news team.”

 

The second case study was of the Bhaskar group. According to Pitale, investors like the group’s ‘aggression’. Warburg Pincus, according to him, has invested close to Rs 150 crore in the company, which is also looking to go public soon. “The group has been aggressive enough to foray beyond its home turf – Madhya Pradesh – and managed to give a fight to Rajasthan Patrika in Rajasthan. It’s the leader in Gujarat with Divya Bhaskar. DNA, the English daily brought out in association with the ZEE group, is not doing badly either,” Pitale said.

 

The first mover advantage too plays a major part. Citing Aaj Tak, Pitale said that even though there are dozens of Hindi news channels today, no one has been able to beat Aaj Tak till date. In 2004, Aaj Tak went public. Times of India’s innovativeness attracted investor money. “The paper has innovated itself with city-specific content and supplements, and has been open and receptive to changes in reader preferences,” Pitale said.

 

Next on Pitale’s list was HT Media group, which he said has been liked by the investors for its “resilience”. The company withstood tough competition in the 1990s. Besides coming out with an IPO to fund its Mumbai launch, the company has been able to attract strong private equity interest.

 

Network18 Group, according to Pitale, has been the investors’ favorite for its “multimedia strategy”. The group not only has presence in all forms of media from television to internet and print, but it has also explored different verticals within these categories. “Investors pay for growth and de-risked business models. As news media expands and becomes more mature, new avenues are necessary. And Network18 has been able to do just that,” he said.

 

Pitale concluded the presentation by stating that the major interest for investors was in business news, both Hindi and English, as the genre was yet to grow. The other area that could attract investor attention was the regional and local segment. “There is audience stickiness in this segment,” he said, adding, “There is immense opportunity in media, as not only is there an increase in advertising spends, but there is also an equal rise in consumer spends.” The Future of News was organized by afaqs! events and has been sponsored by STAR News, Dainik Jagran, and Yuva.

 

 

 

7. I Want It My Way

Center for Media Research

August 22, 2008

 

A new consumer segmentation analysis from Mediamark Research & Intelligence (MRI) shows that nine percent of U.S. adults belong in the "Ads on Emerging Media Vehicles" segment, the group of consumers who say they are most interested in advertising delivered via such non-traditional media as mobile devices and product placement in video games, movies and in TV shows. The median age of this segment is 35.5, younger than the median age of the other five segments.

 

Ads delivered via mass media are preferred by 17% of U.S. adults, and an additional 17% of consumers are most interested in ads delivered in print. 32% of U.S. all adults are either disinterested in advertising delivered by any medium or they have not been exposed to a particular ad platform.

 

The 9% of U.S. adults who prefer "Ads on Emerging Media Vehicles" are far more likely than the average adult to agree with the following statements. A celebrity endorsement may influence me to consider or buy a product.

 

Brand name is the best indication of quality. Anne Marie Kelly, Vice President of Marketing and Strategic Planning at MRI, says "Consumers who prefer advertising messages delivered through their mobile devices and product placement tend to be younger, pro-innovation, pro-celebrity and pro-fashion... this segmentation analysis helps them to target... consumers most receptive to their media plan."

 

Consumers, according to their interest in advertising across different media, fall into one of six segments:

 

Ads on Emerging Media Vehicles: Most interested in ads delivered through non-traditional media including mobile devices and product placement in movies, TV shows, and in video games.

 

Ads on the Road: Most interested in advertising on billboards, taxis, buses and trains, at bus stops and train stations, and atop taxicabs.

 

Ads in Mass Media: Advertising delivered through magazines and electronic media such as TV, radio, and the Internet appeals the most to this segment.

 

Ads on Paper: Most interested in advertising delivered through print, which they find informative, relaxing and/or inspirational.

 

Ads at Events: Displayed at sports or entertainment events and through product placement in movies and TV shows.

 

Ad Adverse: Most likely either to be not interested in or to have not been exposed to advertising in TV, radio, newspapers, magazines and the Internet.

 

8. Viewers See Online As 'TV Replacement'

MediaPost Publications

July 30, 2008

 

New research suggests that up to 20% of TV viewing occurs online, and that in some cases, those viewing levels are higher than levels via DVR playback. The new data comes from Integrated Media Measurement Inc. For the first time, notes IMMI, a significant portion of the online audience for prime-time episodic content is not watching some portion of the show on television.

 

IMMI says that 50% of the time viewers see online viewing as a "TV replacement," while 31% say screening of content via the Internet is "catch-up" viewing. Some 18% classify it as "fill-in viewing." It also noted that online TV viewers are less likely to use a DVR than traditional TV live viewers. Twenty-nine percent of traditional live TV viewers use a DVR frequently; 22% of online TV viewers use a DVR frequently.

 

IMMI notes that higher viewing levels online are for "some" content of episodes viewed online--not necessarily complete episodes, which suggests sampling of shows. Also, while online viewing of shows can be higher than DVR playback, DVRs are only in about one-third of the country, while access to the Internet in U.S. households is pegged at 82%.

 

For its analysis, IMMI uses special mobile phones that some 3,210 people carry so they can pick up video and audio signals in some six markets. In following the flow of TV viewing, the survey said 41% of the panelists watch a TV program live first and then watch at least one episode of that program later--the highest of all online viewing. In the second-biggest area, the survey said 31% of panelists watch a TV program via DVR playback and then watch another episode of that program online After that, 10% of the panelists watch live TV first and then another episode on DVR playback. Another 10% of the panelists watch a TV episode first on DVR, then another DVR episode.

 

In line with other research, the online viewing audience tends to be younger than traditional live TV viewing. IMMI says that 45- to-55-year-olds account for 25.2% of live viewing--the most of any demographic. For online viewing of TV shows, 25- to-34-year-olds account for 29.9%, the most of any demographic.

 

The survey says that 55% of females are inclined to watch prime-time episodes online, as opposed to 45% of males. Online viewers are more affluent than live network prime-time viewers. The more educated the viewer, the more likely they are to watch a show online.

 

 

 

9. Online banner ads to be worth Rs 350 crore in 2008-09: IAMAI

Agencyfaqs

August 27, 2008

 

The Internet and Mobile Association of India (IAMAI) has estimated the size of the online banner advertising market in 2007-08 to be Rs 235 crore; it expects it to grow by almost 49 per cent to Rs 350 crore by the end of 2008-09. This study is part of a report released by the IAMAI and IMRB International on the online banner ad market in India.

 

Of the categories of advertisers, the BFSI (banking, financial services and insurance) category makes up 25 per cent of the banner advertising pie. This share is expected to grow to 26 per cent by the end of the year. The share of the online publisher category is 25 per cent and expected to come down to 23 per cent. The share of the IT and telecom category is expected to remain constant at 13 per cent.

 

The other major categories are auto, FMCG (fast moving consumer goods) and consumer durables. The education category is expected to show the fastest growth from 4 per cent to 7 per cent. This is possibly because this category targets the youth segment.

 

The report also shows that the online banner ad spend per Internet user is only about $1.20 (Rs 52.50), which could be $1.60 (Rs 70) by the end of the year. This figure is quite low as compared to global standards and shows that the ad spends in banner ads are not keeping pace with the growth in Internet users.

 

The low ad spend on banners could also be attributed to the increased spends in other forms of online advertising, such as social media. In the UK, the online ad spend per user is $188, and in the US, it is $143. The report reveals that people are increasingly noticing online banners. In 2006, 56 per cent of the active Internet users clicked on an online ad. In 2007, this figure was 80 per cent. Computed on a base figure of 15.4 million, this implies that 12.3 million people clicked on an ad in 2007.

 

Further dissecting the behavior of these users, the report shows that after seeing these ads, 41 per cent of the users looked for information on job sites, 35 per cent visited education and training sites and 27 per cent looked for information on investments.

 

Some of these ads were converted into purchases. Around 4.3 per cent bought hotels and holiday packages, 3.8 per cent acquired loans from banks and 1.4 per cent bought computers, laptops, printers or scanners. Referring to the attitude of the Internet users towards online ads, the report reveals that 65 per cent of the users are less likely to buy a product after seeing an online ad. Around 65 per cent said they don't like clicking on online ads as they are distracting and 58 per cent said they usually ignore online ads.

 

The findings of the report are based on an annual survey of 65,000 individuals and 12,000 households in 30 cities in India.

 

 
 

10. Entertainment most popular on mobile Internet in BRIC countries: Nielsen

Agencyfaqs

August 18, 2008

 

Research firm Nielsen has released a report on mobile Internet usage in BRIC (Brazil, Russia, India and China) countries. The report shows that compared to the US and European markets, where mobile Internet is used mostly for information and news, BRIC markets are driven to entertainment content.

 

The report shows that the top five mobile site categories in India are games (visited by 38 per cent of mobile Internet users), email (33 per cent), entertainment (21 per cent), music (18 per cent) and sports (15 per cent). In China, entertainment (55 per cent) tops the list, followed by games, music, news and politics, and business and finance. In the US and Europe, users are more interested in email, weather, search, news, sports and city guides.

 

The report also shows that mobile Internet penetration in India is 1.8 per cent, the lowest in a list of 10 countries. The US has the highest penetration at 15.6 per cent, while China stands at 6.8 per cent. The figure refers to the number of mobile users who have accessed mobile Internet at least once, and does not include web based email and instant messaging.

 

Commenting on the report in an official communiqué, Jeff Herrmann, vice-president of mobile media at Nielsen, says, “In the US and Europe, broad access to media and entertainment has been available for decades through a large fixed distribution infrastructure, and more recently in specialized devices like iPods, to meet consumers’ entertainment needs. Users in the growing BRIC markets haven’t had the benefit of broad based content distribution, thereby limiting their exposure, and are filling the service gap by embracing the mobile’s transition into a personal entertainment platform.”

 

Herrmann adds that mobile Internet fills an important gap in homes and schools in countries such as India, where PCs are not easily accessible.

 

 

 

11. Snapshot of Biscuits category advertising on TV during H1 2008

Indiantelevision

August 26, 2008

·         TV ad volumes of Biscuits category grew by 25 per cent during January-June 2008 compared to January-June 2007.

·          'Parle Products Pvt Ltd' leads in advertising of Biscuit brands on TV during H1 2008.

·         'Sunfeast Golden Bakery' topped the chart of new brands of Biscuit advertised on TV during H1 2008.

·         'Shahrukh Khan' topped the chart of Celebrities endorsing Biscuit brands on TV during H1 2008.

 

 

 

12. Overview of Confectionaries sector advertising on TV during H1 2008

Indiantelevision

August 19, 2008

·         8 per cent growth in TV advertising of Confectionaries sector during H1 2008 over H1 2007.

·         'Chocolates' sub category garnered a high advertising share of 42 per cent on TV during H1 2008.

·         'Cadbury India Ltd' was the top advertiser under Confectionaries sector on TV in H1 2008.

·         'Boomer splash' was the most advertised new brand under Confectionaries sector on TV during H1 2008.

 

 
 

13. Overview of Two Wheelers advertising in Print during H1 ‘08

Exchange4media

August 01, 2008

·         Print advertising of ‘Two Wheelers’ decreased by 30% during H1 '08 compared to H1 '07.

·         ‘Motorcycle' garnered a high share of 71% of 'Two Wheelers' advertising in Print during H1 '08.

·         ‘TVS Motor Company' was number one advertiser under 'Two Wheeler' category in Print during H1 '08.

·         ‘TVS Motor Company' was number one advertiser under 'Two Wheeler' category in Print during H1 '08.

·         ‘Two Wheelers’ advertising skewed towards Non Metro Newspapers during H1 '08.

 

 

 

14a. Snapshot of Mobile Phone Advertising in Print Jan-Jun ‘08

Exchange4media

August 08, 2008

·         Mobile Phone category has witnessed a dip of 45% in Print advertising during H1’08 compared to H1'07.

·         West and South Zone leads with an equal advertising share of Mobile Phones in Print during H1'08.

·          'Nokia Corporation' rules in advertising of Mobile Phone brands in Print during H1'08.

·        'Spice S-585' topped the chart of new brands of Mobile Phones advertised in Print      during H1'08.

·        Sales Promotional ads garnered a high share of 70% of total Mobile Phone ads in Print during H1 '08.

 

 

 

14b. Snapshot of Mobile Phone Advertising on TV January-June 2008

Indiantelevision

August 05, 2008

·         TV ad volumes of Mobile Phones grew by 27 per cent during January-June 2008 compared to January-June 2007.

·          3/4th of Mobile Phone advertising were on National channels during H1 2008.

·         'Nokia Corporation' is way ahead of other advertisers of Mobile Phones on TV during H1 2008.

·         'Nokia N82' topped the chart of new models of Mobile Phone advertised on TV during H1 2008.

·        'Shahrukh Khan' was the top celebrity endorsing Mobile Phones on TV during H1 2008.

 

 

 

15a. Overview of Oral Hygiene brands advertised in Print during H1’08

Exchange4media

August 14, 2008

·          38% drop in Print ad volumes of Oral Hygiene category during H1 '08 compared to H1 '07.

·          ‘Tooth Pastes’ sub category garnered a high share of 47% of overall Oral Hygiene category advertising in Print during H1 '08

·          ‘HUL' was the top advertiser under Oral Hygiene category in Print during H1 '08.

·          ‘Pepsodent Decay Protection' was the top new Oral Hygiene brand advertised in Print during H1 '08.

·          High advertising share of Oral Hygiene category on Non Metro Newspapers during H1 '08.

 

 

 

15b. Overview of Oral Hygiene brands advertised on TV during H1 2008

Indiantelevision

August 12, 2008

·        Five per cent rise in TV advertising of oral hygiene category during January-June 2008 compared to same period in January-June 2007.

·         'Tooth Paste' garnered a high share of 64 per cent of overall oral hygiene category advertising on TV during H1 2008.

·        'Colgate Palmolive India Ltd' was the top advertiser under oral hygiene category on TV during H1 2008.

·       'Pepsodent Decay Protection' topped the chart of new brands of oral hygiene advertised on TV during H1 2008.

·          High advertising share of oral hygiene category on regional channels during H1 2008.

 

 

 

16. TRAI allows Internet telephony

Indiantelevision

August 18, 2008

 

The Telecom regulatory authority of India (TRAI) has recommended complete opening up of Internet telephony in India. As per the recommendations, TRAI wants internet service providers (ISPs) to offer unrestricted internet telephony services, a move that will further boost competition in the domestic long distance segment.

 

TRAI said, "It is envisaged that customers will ultimately benefit from cost effective and innovative internet telephony service. These recommendations will put Indian telecom sector in tune with global trends. The grey market tendencies shall be curtailed."

 

The ISPs have been permitted to provide unrestricted Internet telephony which means they can terminate Internet telephony calls on PSTN (public switched telecom network) and vice-versa. TRAI has recommended the national long distance (NLD) operators to connect to ISPs through public Internet (Internet cloud) for unrestricted Internet telephony. But for that to take place, ISPs and NLDs will have to thrash out mutual agreements for unrestricted Internet telephony, said TRAI.

 

The move will permit calls from personal computers to fixed line and mobile phones. Currently, a voice call can travel between two computers but not from a mobile or a fixed phone. This is expected to open huge channels of revenues for ISPs. NLD shall make suitable commercial and technical arrangements with access providers i.e PSTN/PLMN (public landline and mobile network lines) for unrestricted Internet telephony, said the regulator in a statement.

 

However, there will be no change in the existing IUC regime. According to TRAI, TEC (Telecommunication Engineering Centre) will identify distinct number resources for Internet telephony subscribers. Telephone numbers from the identified blocks will be allocated to ISPs, UASPs (unified access service providers), BSOs (basic service operators) and CMSPs (cellular mobile service providers) for Internet telephony.

 

Even as the regulator emphasized that overall licensing framework has been protected while permitting unrestricted Internet telephony to ISPs, the decision is likely to cause rancor among the existing telcos while bringing a huge cheer to the handful surviving standalone ISPs. With a view to make internet telephony secure, all ISPs interested to provide unrestricted internet telephony would install "Lawful Interception" equipments.

 

The telecom regulator stressed that it had given due importance to ensure the level playing field among various service providers, interconnection mechanism, inter-connect usage charges (IUC), and other important issues such as numbering, lawful interception, emergency number dialing, inter-operability and quality of service.

 

"Our subscribers are denied advanced value-added services in contrast to global scenario where such Internet-based services are popular. ISPs are not permitted to provide unrestricted Internet Telephony though they have IP-based infrastructure. Such regulatory restrictions discourage technological advancements and result is grey market activities to provide these services to common masses," TRAI said.

 

However, emergency number dialing has not been mandated to ISPs. Also, all ISPs interested in providing unrestricted Internet telephony will have to invest in installing lawful interception equipment. Besides, TRAI has not, at this point, mandated quality of service (QoS) norms for unrestricted Internet telephony.

 

Industry body NASSCOM has welcomed the TRAI's recommendations. "Voice transmission over internet was permitted 'from PC to PC’ and 'from PC to a phone' internationally. As a direct implication, this move will now allow voice transmission over internet for a ‘PC to phone in India’, which will benefit the BPO industry to a large extent," says an official release.

 

 

 

17. Govt allows foreign players for 3G spectrum

Indiantelevision

August 01, 2008

 

The government has allowed overseas players to bid for 3G spectrum. Unveiling its policy on 3G, the government has also said that five players would initially be permitted per circle for 3G rollout. The floor price has been set at Rs 20.20 bn for pan India 3G auctions.

 

The reserve price for a 2x5 MHz block of spectrum for Mumbai, Delhi Metro and Category ‘A’ cities would be Rs 1.60 billion, which is twice the price recommended by the Telecom Regulatory Authority of India.

 

Announcing the detailed guidelines for 3G and BWA (Broadband Wireless Access) services laying down the road map for rolling out these services in the country, Communications and Information Technology Minister A Raja said the price for Kolkata Metro and Category ‘B’ would be Rs 800 million while for ‘C’ service areas shall be Rs 300 million.

 

The Minister said the 3G spectrum would be allocated through a simultaneous, ascending e-auction process, which shall be conducted by a specialized agency. A separate auction would be done for each telecom service area. The announcement was made at a press conference here in the presence of Minister of State Jyotiraditya M. Scindia.

 

With the introduction of these services, the quality of voice telephony will be improved as 3G spectrum would enable service providers to provide good quality services to a larger number of subscribers.  Further, additional value added services will become widely available to the public. BWA services will ensure quick roll out and enhanced penetration of broadband especially in rural areas, where there is problem of last mile connectivity. It will facilitate availability of e-governance services like tele-medicine, e-medicine, e-ticketing, e-education etc, through broadband to the large section of rural population. Auctioning of 3G and

 

Broadband spectrum will be done through e- auctioning by a specialized agency separately. New players would also be able to bid thus leading to technology innovation, more competition, faster roll out and ultimately greater choice for customers at competitive tariffs.

 

No annual spectrum charge shall be payable for 3G Telecom services in the first year from the date of allotment of spectrum. The licensee will have to pay annual spectrum charge of 1 per cent of AGR after a period of one year. There will be roll out obligations to avoid spectrum hoarding. If licensee does not achieve its roll out obligations, it shall be given one year to comply on payment of 2.5 per cent of its successful auction bid (i.e. spectrum acquisition price) per quarter or part thereof. If licensee does not complete its roll out obligations even within this one-year, the spectrum assignment shall stand withdrawn.

 

Spectrum for the 3G Policy will be auctioned in blocks of 2x5 MHz in 2.1 GHz band (1920-1980 MHz paired with 2110-2170 MHz).

 

The number of blocks to be auctioned would vary subject to the availability of spectrum in different telecom service areas. In exceptional cases of non-availability, the number of blocks may be less than 5 in a telecom service area. The actual number of blocks to be auctioned in each telecom service area will be announced well before the auction.

 

In the 450 MHz band, in 800 MHz band for EVDO services and in 1900 MHz band (1900 – 1910 paired with 1980-1990 MHz) shall be auctioned when it becomes available. UASL CDMA telecom service providers may have the option to seek 2x1.25 MHz in 800 MHz band subject to availability at a price equivalent to the highest winning bid in 2.1 GHz auction prorated to a per 2x1.25 MHz price.

 

The seniority for allotment shall be the subscriber base in a telecom service area. One block shall be allocated to MTNL in Delhi and Mumbai/Metro service Areas and BSNL in other Service Areas at a price equal to the highest bid in the respective service area. The BW licenses would be granted through an e-auction, process, which shall be conducted by a specialized agency. Auction of 3G and BWA services would be done separately.

 

Any person who holds a UAS license or who fulfils the eligibility criteria for obtaining a Unified Access Service License (UASL) under the Department of Telecommunications guidelines of 14 December, 2005, and has previous experience of running 3G telecom services can bid for 3G spectrum.

 

With regard to the BWA guidelines, the government said The BW licenses would be granted through an e-auction, process, which shall be conducted by a specialized agency. Auction of 3G and BWA services would be done separately.

 

Any person who holds a UAS license or any person who fulfils the criteria for obtaining a UAS license according to the DoT guidelines of 14 December 2005 and has previous experience; apart from ‘A’ and ‘B’ category Internet Service Providers (ISPs) can participate in the auction.

 

Spectrum shall be auctioned in the 2.5 GHz, and 2.3 GHz bands for data services. Each successful bidder can get 20 MHz in 2.3 and 2.5 GHz bands in a telecom service area. The number of blocks shall be two in 2.3 GHz band and two in 2.5 GHz band. The reserve price per MHz in 2.3 GHz and 2.5 GHz bands shall be 25% of the 3G reserve price. Spectrum in 700 MHz and 3.3-3.6 GHz bands shall be auctioned as and when it becomes available.

 

FICCI welcomed the 3G auction policy as a positive step and said these auctions will be watched by investors all over in terms of addressing of many years of controversies in license and spectrum allocation.

 

This would also provide help for building of a Greenfield pan -India state-of-the-art communications infrastructure and services in the country and bring in fresh investments to the tune of $8–10 billion over the next 2-3 years. FICCI President Rajeev Chandrashekhar said the 3G policy and auction guidelines would allow for an open, global and transparent auction process consistent with international best practices.

 

 

 

18. Tam rolls out digital TV viewing data

Indiantelevision

August 27, 2008

 

Television ratings agency Tam is rolling out weekly digital TV viewing data from today, filling a gap in the  industry that is expected to have a combine of nine million direct-to-home (DTH) and digital cable TV subscribers by 2008-end.

 

Broadcasters, particularly in the niche genres, will be able to monetize their upscale viewers better with the data drawn from a larger panel of a growing digital universe. Television channels who do not find prime space on analogue cable also stand to benefit, as preliminary data from Tam shows that their viewership is higher in digital platforms than what is being captured from the rating system's regular format.

 

"With digital riding high in many markets across India, measuring and reporting that data at a national level to the industry was the immediate task at hand. After careful study and quality check processes, starting this week, we will now start delivering the digital viewing data along with the regular weekly data.

 

The last two years of measuring and studying digital TV viewing has been an interesting learning curve. Ever since we deployed TVMS Digital People meter (in Tam elite panel) and started generating digital TV viewing data from January 2007 onwards, some very interesting viewing differences started emerging," said Tam Media Research senior VP Pradeep Hejmadi.

 

The digital penetration in the CAS (conditional access system) belt is steadily rising. Out of the 1.63 million cable and satellite (C&S) homes in the CAS region, 38 per cent (640000) had moved to digital by 2007-end. In February of last year, 29 per cent (475000) of the CAS homes had stayed digital.

 

"Mumbai with 50 per cent has the highest digital penetration. The digital viewer also watches more channels and spends 20 per cent more time (186 minutes per day) than the analogue counterpart. Digitalization is also leading to greater fragmentation as 80 per cent TV viewing is coming from 10 per cent more channels," said

 

Digitalization, however, has to address three issues. "The individual or bouquet of pay channels pricing was not received well by audiences. The value added services, such as video-on-demand and interactivity, weren’t used frequently due to lack of education.

 

The quickness in service is also a crying need," said Krishnan. Tam is working on the STB return path data technology and hopes to launch it first in Mumbai. The sample size will be 10,000.

 

DTH scores over digital cable

Early Tam findings show that DTH is growing more rapidly than digital cable. While digital cable has deployed 1.3 million set-top boxes (till August 2007), DTH has jumped to 6.5 million subscribers (from 2.3 million in April 2006).

 

In urban India, DTH and digital cable have individually mopped up 0.9 million subscribers. But in the rural belt, DTH has a higher share with 5.6 million subscribers. Digital cable, on the other hand, has 0.4 million subscribers.

 

"We are seeing a trend where in rural India terrestrial homes are moving on to DTH. In urban areas, cable has given away to DTH," said Hejmadi.

 

DTH has grown across urban and rural markets while digital cable is seeing upsurge mainly in the CAS areas. "Four states account for 52 per cent of the DTH homes. In Maharshtra, DTH and digital cable have grown. But in Gujarat, cable is taken over by DTH. Another trend is that while many cable STB homes had moved to DTH, the reverse has not been true," Hejmadi said.

 

Digitalization to drive growth

The stakeholders across the value chain see huge growth potential in digitalization. "Digital measurement will enable us to monetize better. It will expand the business for broadcasters and they will be in a position to pay more for content," said INX Media chairman Peter Mukerjea.

 

Speaking at a panel discussion on "Conquering the digital frontier," Mukerjea said digitalization would make it possible for niche English channels to build business models around digital platforms. Zee's international business head Bharat Ranga emphasized on the need to up the subscription and advertising pricing. "There are lessons to be learnt from abroad. The players here have to be clear about which channels are going to be free and which pay," he said while speaking at Blink, Tam's annual educative initiative.

 

Star India’s Paritosh Joshi warned that it is premature to draw a cause and effect at this stage based on numbers. The industry has painted itself into a corner on the pricing issue, he added. Digicable Network (India) MD and CEO Jagjit Singh Kohli felt it would be premature to compare DTH with digital cable at this stage. "There are 5000 head ends in the country and the digital revolution has just begun,” he said.

 

Hathway Cable & Datacom MD and CEO K Jayaraman noted that the advent of DTH would add to consolidation in the cable sector. "The MSOs are not just buying analogue operators but are interested in digitalizing the entire business. Even in non CAS areas, the progressive MSOs are pushing STBs at just Rs 500."

 

Private equity funds are getting attracted to the cable sector because of digitalization. "The MSOs have received an investment of $400 -$500 million in form of private equity and debt. Digitalization is the obvious attraction for them," said Jayaraman.

 

 

 

19. FM radio stations win by offering a face to the voice

Agencyfaqs

July 28, 2008

 

Remember Jaggu, Pintu, Chunnu, Munnu, Chintu, Mintu and family from Jhumri Tallaiya? The radio jockey (then called the announcer) often announced these names as those desirous of hearing a particular song and read out their letters. In fact, till a few years ago, this was the only interaction between the radio jockey and his listeners.

 

Then came phone-ins, followed by emails and SMSes. However, there never was a face to the radio jockey (RJ) and listeners often wondered what their favorite RJ looked like. But not any more. RJs are now moving out of the studio to interact with listeners. In countries such as South Africa and the US, the trend of outdoor broadcasting is quite popular. But here in India, the trend is just catching on.

 

Radio Mirchi, one of the first private FM stations in the country, adopted the concept of outdoor broadcasting in 2001, but these were just one-off initiatives. Outdoor broadcasting has now become an integral part of the programming of practically every radio station in the country. Recently, during the Delhi University admissions, Radio Mirchi took Volvo buses around the campuses, counseling students and addressing their doubts and queries. Radio One’s College Radio show has been hosted from the city’s college campuses for some time now by its popular RJ, Rahul.

 

Outdoor broadcasting increases brand recall, which is certainly a deciding factor for radio stations in these days of clutter and identical content. Besides, FM radio jockeys are semi celebrities and such initiatives provide them an opportunity to interact with the listeners and further boost their popularity.

 

Tapas Sen, chief programming officer, Radio Mirchi believes that outdoor broadcasting has more to do with connecting listeners to the brand or radio station than with the RJ. But the popularity element can't be ruled out completely. RJs have a large fan following and often play a crucial role in building loyalty for the radio station among listeners.

 

A senior programming executive for a radio station says, “There are certain shows on radio in which the listener has intimate discussions with the radio jockey on personal issues. Such interactions help increase the trust factor with radio jockeys.”

 

The initiatives seem to be working for the radio stations, but the fact is that increasing brand recall and trust in RJs is just a by-product; more importantly, the radio stations are making serious money from these initiatives.

 

Radio Mirchi's programme, Brand on Streets (BOS), has the RJs going out to malls and residential societies in Mumbai and Delhi for breakfast meets. These breakfasts are sponsored by FMCG brands, which is a great opportunity for brand activation.

 

At times, special programmes are planned for advertisers. Fever 104 tied up with Nepal Tourism and the station's RJ, Lokesh, went to Nepal for live broadcast of its morning show, Balle Balle in Nepal. Lokesh visited Kathmandu, Bhakatpur and Gokarma, flew over Mount Everest and participated in adventure sports such as bungee jumping and rappelling up a mountain through a waterfall. He interviewed people on the streets of Nepal and even attended a Nepali wedding.

 

Gowri Satyamoorthy Kapre, national head, marketing and promotions, Fever 104, defines the Nepal initiative as an endeavor to create engaging content. Kapre says Fever is looking forward to more such opportunities to interact with listeners in an innovative manner. Such initiatives seem to work wonders for the advertisers, too. For instance, Radio City had done some brand activations in Garuda Mall in Bengaluru and City Centre Mall in Hyderabad.

 

Entire studios were set up for a month, which allowed listeners to experience how a radio station functions. Listeners were also allowed on air with the RJs. As a result, both malls saw a major increase in footfalls. Recently, Cadbury launched a new version of its popular brand, Eclairs, with the tagline 'Slow, Slow Mazze Lo'. Radio City did a spoof of the TV reality show, Indian Idol (Slow Mix Idol), to promote the brand. In the spoof, the RJs went out on the streets and made people sing songs slowly, but perfectly.

 

Such initiatives are being extended across categories and movie marketing is one of them. Radio One recently did a promotion for the soon to be released movie, Ugly Aur Pagli, in Mumbai. It chose 60 listeners from a contest to meet the film’s stars, Mallika Sherawat and Ranvir Shorey.

 

Raj Gopal Iyer, station head, West, Radio One, says, “OB is an experiential platform for both the stations and the listeners. It is also an experiential platform for brands to reach out to a wider audience.” Iyer feels that radio, which was an aloof medium, is getting “two-way” now. Radio executives feel that such initiatives allow them to score over their richer cousin, television. “Radio is a local medium and, with such initiatives, one can turn this quality in its favor,” says Iyer.

 

Television has a national reach, so local events are not featured too often on it. But radio, which is a local medium, talks to listeners in the local lingo and they can relate to it easily. And that is what radio seems to be cashing in on.

 

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