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Volume: XVII

August, 2008

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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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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.

 

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