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: VI

September, 2007

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In these hyper charged times where news comes in as fast as it becomes outdated, we need a source that can keep track of what matters to us.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, BRIC, 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.

Consumer Trends

01. Tweens Are The New Teens – Jul 29

Tweenagers are the Most Preferred Consumers of the Retailers

Tweenagers (Age Group 9 – 13 Years) have become the most preferred consumers of the retailers across the world. Being more advanced from their past counterparts, today’s tweens dress up the way they want, work out, are tech-savvy and have in-depth knowledge of relationships. According to Sociologist Mala Kapur Shankardass, children are exposed to the net, newspapers, movies and magazines and hence, have more awareness, and want to act like the elders. With children reportedly either spending or influencing Rs 25 lakh crore worth of purchases, they are now the centre of intense advertising pressure seeking to influence family spending.

Source: The Times of India

02. Lifestyle Lords Over Livelihood In Rural India's Spends – Jul 27

Lifestyle expenses of village youth are increasing

According to a survey conducted by MART Rural, a rural marketing consulting agency, rural expenditure is shifting to increasingly include lifestyle expenses over livelihood expenses. The demand for lifestyle-related products has increased among rural consumers and sales are being driven by women and youth. The driving factors behind this trend include growing awareness, the impact of affluent towns on nearby villages, and increased liquidity in the rural market.

Source: Financial Express

Emerging Trends: Digital

03. Consolidation Bug Bites Digital Media – Aug 08

Digital communications units consolidate

The global advertising industry is facing a consolidation wave. International marketing communications holding companies such as the Omnicom Group and Publicis Groupe are pooling their digital communications units under single banner, after consolidating their ad agency and media-buying networks across markets. These digital units create and buy ads for the Internet, mobile and gaming space, social networks, etc.. According to industry experts, consolidation will help media agencies obtain behavioural insights on how consumers use digital media and create new ways to interact with each other.

Source: Mint

04. Digital Advertising Has Tremendous Potential’ – Aug 04

Digital cinemas offer advertising opportunities

Digital cinema is being considered as a potential medium by advertisers for reaching the masses. According to Rajesh Mishra, CEO (Indian Operations), UFO Moviez, the medium is more effective than television and cheaper than Internet advertising, and has the potential to grow to account for 10% of the advertising revenue by 2010. According to Mishra, “Television is more intrusive, and people tend to switch channels, but the audience in a theatre is a captive one, they are more receptive”.

Source: The Hindu Business Line

Emerging Trends: Retail

05. Supermarkets Not Just Well-Off Shoppers` Stop - Jul 31

Moderate-income consumers also visit supermarkets

According to a research conducted on modern retail customers by a Delhi-based market research consultancy Market Pulse, it is not only the affluent who shop at supermarkets, but also those with moderate incomes. Market Pulse spoke to nearly 350 consumers in Delhi, Mumbai and Chennai, and found that half the respondents had monthly household incomes below Rs 20,000, while 26% earn less than Rs 10,000 a month. The most frequent purchases from modern format stores included commodities and personal care products, followed by fruits and vegetables, and home care products.

Source: Business Standard

06. Merchandising Retail Is Set For A Big Boom - Jul 28

Character merchandising is expanding rapidly

The Indian merchandising business is witnessing a boom; presently, the sector is worth Rs 300 crore and is expected to triple in the next two years. According to Paresh Chawla, president, Toys Association of India, “Character merchandising as a business is now booming and with about 1,500 standalone toy stores to be added in the retail sector over the next two years, this business will soon have a critical mass. It could drive the entire toy business on a high-growth path”. The growth in the retail sector is driving the sales of merchandise related to fictional characters such as Harry Potter and Superman, and trade sources estimate that Potter merchandising sales amount to a massive Rs 1 crore, the biggest of their kind in the country till date.

Source: Financial Express

07. Content Customisation Is The Key To Successful In-Store Branding, Say Industry Players – Jul 26

In-store advertising content being customised

With the advent of the retail boom, in-store advertising has evolved as a new medium for Indian advertisers. Realising the potential impact of content, advertisers are trying to target their audiences at the last ‘point of contact’. According to Deepak Jayaram, national director, Dialect/D mART (Micro-marketing Solutions), it is important for content to be customised, keeping in mind the varying needs of consumers. Ads need to be modified or customised to use the new digital media more effectively, so that they seamlessly integrate to reach the masses at large.

Source: Exchange4media

08. What`s In Store – Jul 31

Modern retail formats are popular

Market Pulse, a Delhi-based market research consultancy, conducted a study in Delhi, Mumbai and Chennai to understand consumers’ spending behaviour and attitude to modern retail. The study revealed that consumers prefer shopping in supermarkets or modern retail shop as these provide a wide range of products (cited as the biggest benefit by 25% of the respondents), and that strategically placed displays, packaging and smaller SKUs (stock keeping units) encourage trials. However, the study also states that the kirana stores, with a 94% share of the $320-billion organised retail trade in India, will not go out of vogue because they are usually in close proximity to consumers, and house cheaper, unbranded versions of most consumer products.

Source: Business-Standard

Emerging Trends: Others

09. Websites Search For The Future In Maps – Aug 22

Maps useful for procuring local information

With the increasing access to the Internet, online maps are moving into the consumer realm by becoming a useful tool for local information. Previously, they were primarily used by companies for tracking their distribution network or customer demographics. Portals are now looking for ways to integrate maps into their services and also as a means of attracting revenue through local advertising. In developed markets, maps are morphing into a Web 2.0 phenomenon, providing ‘layers’ of information to which users can contribute. An example is Wikimapia, combining Google Maps with a community that can edit landmarks and locations on a world map.

Source: Agencyfaqs

10. China Spends More On Ads, But Indians Trust Ads More: Forrester – Aug 20

Indians are more responsive to ads than Chinese

According to Forrester’s Asia Pacific Consumer Technology Adoption Study (APCTAS) Q3 2006 Survey on purchasing and consumption behaviour, Indian consumers’ attitudes toward advertising were significantly more positive than those of their Chinese counterparts. Approximately 61% of the surveyed Indians agree with the statement “Ads are a good way to learn about new products”. However, the survey indicated that the ad-saturated Chinese consumers are similar to US consumers in requiring more sophisticated forms of advertising for persuasion.

Source: Agencyfaqs

11. Ad Spends Rise on Proliferating Media (By 30 To 40 Percent When Compared To The Media Costs In 2005) – Aug 20

Media proliferation leads to 30-40% increase in ad spend

The increase in the usage of media channels such as television, print, the Internet, radio, and mobile phones for advertising has led to a 30-40% increase in ad spend, compared to that in 2005. Media fragmentation has resulted in advertisers investing towards increasing the frequency and number of ads aired.

Source: Tmcnet.com

12. What’s Eating Indian Advertising? – Jul 29

Advertising industry’s low contribution to GDP

The Indian advertising industry, which grew by 20% in 2006, is expected to continue growing at a double-digit rate in 2007. However, India is considered a highly under-advertised economy as advertising contributes to only 0.34% of GDP, whereas this figure stands at 1% globally. High attrition rates (30%), degeneration of client-agency relationships, non-agreement of standard practices, and lack of a unified body are some of the factors that have resulted in the low contribution to GDP by the advertising industry.

Source: Business Today

Emerging Trends: International

13. IBM: Opt-In Message Model Less Intrusive, More Relevant – Aug 23

Advertisers to become more creative while communicating messages

With consumers splitting their time among the Internet, TV, mobile phones and the print medium, ad and marketing gurus are looking for an alternative model; it is considered that an opt-in method will be less invasive and more relevant. According to Saul Berman, IBM Media & Entertainment Strategy and Change practice leader, the opt-in model would rely on dynamically inserting messages into the media content based on programming and consumer profile. IBM's survey also found that consumers were more reluctant to accept advertising in video on mobile devices, with 46% admitting they would watch ads before or after free content, followed by 25% who would not watch mobile advertisements or pay for mobile videos. In addition, 18% agreed to pay a few dollars per month for quality ad-free content.

Source: Media Post Publications

14. Seven Different Types Of News Readers Makes Niche Offerings Viable – Aug 15

Preference of news sources ranked

McKinsey, a management consulting firm, conducted an online survey that shows that respondents rely on a large number of brands – 12 to 16 a week across five different platforms. The reasons given for visiting a number of sources included "every news event has at least two sides", to "get all the facts", to "form my own opinion", or to “find specific types of content”, such as local news. The respondents also ranked these platforms according to the usefulness of the news. Television (45%) ranked first, followed by the Internet (26%), newspaper (18%), radio (10%), and magazines (1%). The preferences were based on convenience, comprehensiveness, or timeliness, rather than quality.

Source: Mediapost

15. JupiterResearch: Social Media Not Best For Brand Advocates – Aug 14

Behavioural and content targeting to attract brand advocates

According to a JupiterResearch report, ‘Brand Advocates: Creating Rewarding Relationships’, marketers can attract influential brand advocates better through online tactics such as product microsites or product previews than through social media such as user-generated content or blogs. "Behavioural and content targeting are likely to attract brand advocates, as more than half of the brand advocate segment is likely to pay attention to online ads that fit their interests or current activity”, said JupiterResearch President David Schatsky. Despite high online activity, the brand advocate segment is more traditional in its manner of research. The group is more likely to read a blog for information rather than create its own. Value for money and reliability are the most important factors for brand advocates while making a purchase.

Source: Media Post

16. Friends And Brands – Aug 13

Kids and young adults favour digital media communication

MTV and Nickelodeon, along with Microsoft Digital Advertising Solutions, conducted a global study named ‘The Circuits of Cool/Digital Playground’ to determine the ways in which kids and young adults interact with digital technology. The study surveyed 18,000 kids and young adults (ages 16-24) across 16 countries – UK, Germany, Holland, Italy, Sweden, Denmark, Poland, the US, Canada, Brazil, Mexico, China, India, Japan, Australia, and New Zealand. It revealed that friends and peers influence this category of consumers as much as marketers. The key findings state that kids and young people love the manner in which digital media enables them to communicate with each other and access entertainment. In addition, digital communication through mediums such as IM, e-mail, social networking sites, and mobile/sms are seen as complementary to, and not in competition with TV.

Source: Media Post

17. Media Usage Per Person Drops For First Time In A Decade – Aug 07

Media usage per person drops in 2006

According to a report by Veronis Suhler Stevenson (VSS), media usage per person in 2006 has declined 0.5% to 3,530 hours, though media usage on the institutional front, which includes conferences, trade shows and business-to-business publications, rose 3.2% to 260 hours per user. The decline is mainly attributed to changing consumer behaviour and advancements in digital technology. The report also projects that Internet advertising will replace newspaper as the largest ad medium in 2011 and will reach a figure of $62 billion in 2011. Total communication spending, which rose 6.8% to $885.2 billion, will continue to grow in the next five years, with spending in 2007 expected to reach $900 billion with a 6.4% growth rate. This figure is likely to reach $1.2 trillion in 2011.

Source: Adage

18. Online Trends: Rapid Growth For Video, Consumers In Asia Joining By The Millions – Aug 03

Online usage to grow globally

According to a comScore Network study, purchasing products online as well as streaming online videos have emerged as leading activities across the US and Europe in Q2’07. The top 10 websites (globally) are those of Google, Microsoft, Yahoo!, Time Warner (AOL), eBay, Wikipedia, Fox Interactive, Amazon (and subsidiaries), CNET, and Apple Inc. The research firm estimates that the number of global online visitors for the Q2’07 stood at approximately three-quarters of a billion. In this period, total online e-commerce in the US grew 19% to $47.5 billion; retail e-commerce experienced a slightly stronger gain of 23% to reach $27.2 billion. According to a June 2007 report by PricewaterhouseCoopers (PwC), within five years in the UK, virtually everyone under the age of 55 would have used the Internet to buy goods, accounting for a retail share of approximately $78 billion; however, online retail will only represent nearly 10% of the total market value.

Source: Media post

19. Peer Reviews Significant To Shoppers In Consumer Brand Trust – Jul 31

Review and ratings considered vital for making a product purchase

According to a current survey by Bazaarvoice and Vizu Corporation, three out of four shoppers say that it is important to read customer reviews before making a purchase, and the ratio of those preferring peer reviews to expert reviews is 6:1. The survey further reveals that 44% of US shoppers consider ratings and reviews to be the most useful feature of e-commerce sites, followed by product comparison (15%), product navigation (12%), and privacy information (11%). In the UK, over 50% of online shoppers considered ratings and reviews by UK consumers important. Also, when making a purchase, over one-third of UK shoppers consider the 'privacy and security information’ feature of a site important for rating. According to Sam Decker, chief marketing officer at Bazaarvoice, research shows that UK consumers actively seek reviews, and the dependence on customer-created content will increase as UK retailers adopt this strategy.

Source: Media post

BRIC Zone - China

20. China's Retail Sales Up 16.4 Pct In Jul – Aug 20

China retail sales grew by 16.4% in July

According to National Bureau of Statistics (NBS), Chinese retail sales in July 2007 rose 16.4% year-on-year to reach 699.8 billion yuan ($92 billion). While the volume of retail sales by the housing and catering sectors increased by 18% to 92.3 billion yuan ($12 billion), those of the wholesale and retail sectors were up 16.5% to 592.4 billion yuan ($77.9 billion).

Source: Xinhua News Agency

21. Mobile Advertising Market Grows – Aug 13

China’s mobile advertising to grow

According to China-based research house Marbridge Consulting, the mobile advertising market in China reached $65 million in 2006 and is expected to grow by 55% to $142 million in 2008. Factors such as the maturing of the market and rapid growth of technology are driving companies to spend their marketing budgets on mobile phone advertising, and mobile advertising is no longer considered only a supplement to traditional marketing campaigns. However, according to Mark Natkin, managing director, Marbridge, China's mobile advertising market is in the early stage of development. In addition, cell phones are also not likely to become a major channel for companies' marketing campaigns until China sets up its 3G network, which will reduce the downloading time for a WAP page from five seconds to four-tenths of a second. Del

Source: Industry Updates

22. Rise Projected For E-Payments – Jul 27

Internet payment expected to grow

According to a report by Euromonitor, Internet payments in China are increasing. The country had approximately 40 Internet payment portals by the end of 2006, and the transaction value of online payment is forecasted to rise to 107.2 billion Yuan in 2007 from 64.9 billion Yuan in 2006. Credit cards are the preferred means of online payment, while pre-paid cards are expected to emerge as another possible payment tool. Mobile payment, though currently low, is poised to grow.

Source: Chinadaily.com.cn

23. How Mobile Phone Retailers Can Beef Up Their Sales – Jul 26

Strategies for China’s mobile phone retailers

With increased number of mobile retail chains, retailers are finding it difficult to generate significant profit margins and clear stocks. To solve these problems, Chinese retailers have been advised to follow marketing strategies that include conducting branding exercises for their products, communicating with consumers, offering specialised services, following a detailed advertising plan, and extending special promotional offers.

Source: Chinadaily.com.cn

BRIC Zone - Brazil

24. Sales Up 9.8% In January-July – Aug 20

Brazilian retail commerce sales rise 9.8%

The sales volume of the retail commerce sector during the first seven months of 2007 increased by 9.8% compared to those in the same period in 2006. This increase was a result of a 12.5% rise in the sales of specialized products (electric-electronic home appliances, vehicles and construction materials) during the January-July 2007 period over those in January-July 2006.

Source: Gazeta Mercantil News (Real Time)

25. Cinemas Advertising On The Up – Aug 08

Cinema advertising contributed 0.6% to total advertising expenditure

According to a market survey report by Ibope, cinema advertising contributed to 0.6% of the total advertising investment over January-June 2007. The survey sampled 565 cinemas in the main capital cities, attended by 14% of Brazilians.

Source: Valor Economico

26. Brazil Pay-TV Sector 2007 Growth Seen At 10 Pct Y/Y – Aug 03

Brazil's pay-TV users increased by 12% in H1’07

According to the projections of local pay-TV association ABTA, Brazil's pay-TV sector is expected to grow by 10% year-on-year to reach six million subscribers in 2007. In H1’07, Brazil's pay-TV users increased by 12% year-on-year, ABTA added. This is attributed to the fact that pay-TV services in Brazil are no longer exclusive to the wealthy class but are becoming increasingly popular with investments by companies and the reduction of taxes. The leaders in Brazil's pay-TV market, such as Net and Sky, are employing different strategies to grow both in terms of client base and revenue in 2007.

Source: Latin America News Digest

BRIC Zone - Russia

27. Russia Boosts Retail Sales – Aug 02

Retail sales in Russia on the upswing

According to the Russian Federal State Statistic Service (Rosstat), retail sales in Russia reached RUR855.9 billion in July 2007, with the mass of commodities 14.7% higher than those in the same period in 2006.

Source: RosBusinessConsultings

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