Page 1

The Face of Marketing

Volume VII ● Issue 3 ● January 2010

Rs 45

7th

Annual Survey

INDIA’S MOST RESPECTED MEDIA STUDY

Pitch-Madison Media

Advertising

OUTLOOK 2010

The Recovery March How did Print, TV, Radio, Outdoor and Internet perform in 2009? And what’s the outlook for 2010? Details inside.


Pitch-Madison Media REVIEW 2009

Advertising

OUTLOOK 2009

The New NORMAL

By SAM BALSARA & AMIT AGNIHOTRI

T

he year 2009 will go down in the annals of Indian media and advertising industry as the one that has set the ‘New Normal’. To quote McKinsey’s worldwide managing director, Ian Davis, who propagated this term first in March 2009, “Now, the business landscape has changed fundamentally; tomorrow’s environment will be different, but no less rich in possibilities for those who are prepared.” Indeed, the year gone by has reset the entire Indian media industry, as our 7th edition of Pitch-Madison Media Advertising Outlook 2010 notes. This even as the Indian economy showed its resilient character (growing much faster than the world). Thankfully, our study is bullish on 2010, which may end up in just about wiping out our losses of 2009. According to the 7th edition of PitchMadison Media Advertising Outlook

Amit Agnihotri

12 I Pitch I January 2010

The first nine months clearly had the industry sweating. However, there is only acceleration ahead. 2010, Indian media and advertising industry clocked a total size of Rs 18,670 crore. Compared with 2008, where the industry size was pegged at Rs 20,717, this is a dramatic drop of full 10 percentage points. The fall is even

Sam Balsara

more dramatic when we consider the fact that industry grew by an average rate of 15-18 per cent over the five year period – 2004 to 2008. None could have anticipated this sharp a fall. The first nine months of the calendar year (January to September 2009), had the industry sweating. Buoyed by the festive spirits, the ad industry recovered only towards the end of the year. Most large media houses have reported that revenues picked up in the months of October-December 2009. Let’s start with a look at some specific trends of 2009. You’ll find a much more detailed analysis in pages ahead. Country cousins beat metro markets The biggest media trend of 2009 was perhaps the resilience, and even growth, of the great Indian regional media market. The trend was visible in both print & TV media that together count for 87 per cent of ad mart. Given that metro consumers were more ‘leveraged’, and more attuned to credit driven purchases, it’s the purchasing power and sentiments in big metros that got hit the most, as the stock market came down crashing, and jobs came under pressure. In contrast, smaller cities, towns and semi-urban markets, which always lived within their means, continued their spending. This meant sectors like auto, telecom, education, FMCG, wooed these audiences hard. Regional press and TV


Pitch-Madison Media

Advertising

OUTLOOK

REVIEW 2009

The FORGETTABLE Year

gained from the market reality. Metro markets, and metro-centric media, suffered from the negative showing of The year 2009 was a watershed year for TV as it overthrew some of the core product categories like print as the leader, to emerge as the highest grosser. real estate, banking, travel and tourism Rs 103 Cr Rs 1,135 Cr TV Rs 453 Cr and appointment advertising. Rs 681 Cr 1% Print Uday Shankar, CEO, Star Network, 6% 2% 4% puts it well when he says, “The twoRadio 45% three year trend of brands penetrating Rs 8,492 Cr 42% Cinema deeper into the rural markets strengthRs 7,806 Cr ened further in 2009. National and Outdoor regional television, which is often the Internet only means to reach these consumers, is beginning to reap rich dividends.” five per cent. when he says, “The rapid growth in Print’s Plight Automobile, public sector banks, gov- C&S penetration and significant Print media was the worst hit in 2009. ernment and quasi-government adver- improvement in the quality of content The medium lost, hold your breath, a tising, and education were the largest has made television the most important massive Rs 2,000 crore of ad revenues! contributors to the ad revenue pie. vehicle in terms of reach and engageThis meant that print media in 2009 de- Given the strong local connect; the mar- ment...10 times cheaper than print.” Riding the double whammy of better grew by a massive 21 per cent, when keter saw the language media as the preferred means to reach pockets of regional content, and more ad money compared with 2008. coming in, regional TV is the flavour of Fighting to retain their market share, semi-urban and rural growth. 2009. Read more in the Television all leading print titles dropped their admedia review inside. rates, opened up to ‘innovation’ like TV Ticks never before. Some smart players Television, the faithful and cost-effiincreased their cover prices, and the cient media for the FMCG sector, man- Internet Evolves focus was solely on managing bottom aged to survive the tsunami that 2009 Although on a much smaller base, the lines with cost cuts and improving effi- was. Television media registered a total ad revenue for the internet media grew ciencies. The sector saw a slew of cost ad revenue of Rs 8,492, a two per cent rapidly in 2009. Against the total revreduction measures like reduction in no growth over 2008. Loss of press was enue of Rs 363 crore in 2008, it grew to of pages, salary freeze/cuts, launches television’s gain – it became the largest Rs 453 crore in 2009. Several reasons getting deferred and so on. media platform at 45.5 percent share of like higher measurability and growth in Concurs N Murali, Managing total ad pie, ahead of 42 per cent share the usage, as documented in our review Director, The Hindu, “Print media has registered by press. of internet media, account for this been forced to succumb to the presClearly, FMCG sector which con- growth. Radio at Rs 681 crore in 2009 sures of a buyer’s market leading to tributes to over 45 per cent of TV ad pie, just about managed to retain its ad rampant discounting across the board rescued the broadcasters. And there size. Outdoor and cinema continue to and consequent reduction in the net was a lot happening on the program- disappoint media watchers. With urban realisation.” ming side, which kept the audience bias and reduced consumption power Regional players fared better than glued in. of the metro markets, advertisers the metro English focussed newspaT20, IPL, land-slide elections and slashed the budget of these markets pers. Most leading language players innovative reality shows boosted the harder than any other media. managed to avoid ad-losses, and some audience appetite. Read on for a more detailed review of even registered a modest gain of fourUday Shankar of Star sums it well 2009 in pages ahead. ■ 14 I Pitch I January 2010


Pitch-Madison Media

Advertising

OUTLOOK

REVIEW PRINT

Thinned OUT The print media thinned down both in the number of pages and its share in the overall advertising pie. By DEEPTI AGGARWAL

A

nnus horibilus, the Latin phrase, which means a horrible year, sums up the year 2009 for the kind of returns it yield for the print medium in India. The medium that has till now reigned the ad pie and every media planner’s mindscape and the wallet share of brands in the country failed to hold its fort. The slowdown that the Indian economy faced and the reflex action that the marketers exhibited has hurt the print medium’s share in the overall ad pie bringing it down to 41.8 per cent from 47.4 in 2008. The medium fell flat from a growth of 16 per cent in 2008 to a de growth of 21 per cent. That means a dismal ad billing of Rs 7,806 crore in 2009, down from Rs 9,825 crore in 2008. The good news, however, has been that not much titles shut

Rs 5,700 Cr 2005

15 * *Growth (%)

Powered by

16 I Pitch I January 2010

shop. In fact the language press kept up its tempo of geographical expansion through new editions. Benoy Roychoudhary, Executive Director, HT Media says, “The year 2009 was a mixed bag for the Indian print media industry. While the newsprint prices eased, helping us on the cost side, the advertising volumes saw a sharp reduction in the first half of the year.” The ‘New Normal’ The print industry in the country got acquainted with the

Rs 7,000 Cr 2006

23*

new normal in terms of the fall in advertising revenues that most of the publications pocketed earlier. N Murali, Managing Director, The Hindu says, “One thing the industry needs to get used to is a 'new normal', which means the fall in growth of advertisement revenue to a flat growth or even negative growth in 2009, leading to a moderate growth in 2010 to say around 10 to 12 per cent.” Explaining the setting mood fur-

ther, Murali remarks, “The advertisement revenues of 20072008 will not be reached quickly,

Rs 8,470 Cr 2007

21*

if at all. Also the low base effect has to be factored in. In the past twelve months, the average advertisement revenues would have fallen by 15 to 20 per cent. Only, the months of November and December, in 2009 showed some growth for the first time in 12 months.” Sharing the sentiment is Sanjeev Kotnala, Vice President – Marcomm, Dainik Bhaskar, “The days of unhindered growth are definitely over.” In a bid to control costs, the newspapers were seen cutting down on the pages being printed. Apart from other internal cost-engineering like “correcting the staff size and temporary deduction of salaries”, external factors too helped ease the pressure off the shoulders of publishing houses. As Basant Rathore, Vice President, Strategic and Brand Development Dainik Jagran says, “Increasing effi-


ciencies across all levels in the industry is a clear theme that emerged in 2009.” HT Media’s Roychoudhury also feels that the slowdown on ad revenues has led the print medium to focus on the

Rs 9,825 Cr 2008

16*

cost side of the business as well. There is a significant focus on improving business efficiencies across the value chain as well as on looking towards rationalisation of expansion plans. One of the biggest reliefs was the softening of the newsprint prices towards the middle of the year. The imported newsprint prices, which hovered around $1,000 per tonne in fall 2008, were down by more than 50 per cent to $460 per tonne in July 2009. Pricing power Another highlight of the year, particularly for magazines, was that the

*

press saw the revival of pricing power in terms of hiked cover prices. Talking about the pricing power Maheshwar Peri, President and Publisher, Outlook Group, says, “The fact that we realised that the reader needs to pay for what he chooses to read helped us in improving the revenues.” Sharing the numbers that the group witnessed, Peri adds, “The entire group added as much as 12 to 15 per cent additional revenue from circulation. Outlook magazine alone saw an increase of 21 per cent in terms of circulation revenue.” HT Media’s Roychoudhury also agrees to this as he says, “Newspapers were able to increase

While language press remained stable in 2009, English press made the entire press cookie crumble. Rs 7,806 Cr 2009

-21*

their cover prices in 2009 without any impact on readership base. This shows the inherent strength of the medium as a product and the value that readers attach to newspapers. So, on that front, print media did prove its pricing power in 2009.” Dainik Bhaskar’s Kotnala feels that with the cover prices being hiked, “the newspaper will see a cyclical return to being an involvedpurchase rather than being a scheme-driven push-product. There is increasing acknowledgement in the market that there is a price to be

Powered by

January 2010 I Pitch I 17


Pitch-Madison Media

Advertising

OUTLOOK REVIEW PRINT

The BIGGIES

Riding on the earnings of Mumbai, Maharashtra commands a sizeable share in the pie. % share and the top three biggest earners in the state

MAHARASHTRA

21.03 2007

23.39 2008

23.15 2009

DELHI

5.35 2007

5.61 2008

6.94 2009

ANDHRA PRADESH

1. Dainik Jagran 2. The Times Of India 3. Hindustan

W.BENGAL

8.29 2007

6.94 2008

6.49 2009

7.42 2007

5.83 2008

6.04 2009

KARNATAKA

4.91 2007

3.73 2008

3.77 2009

1. Divya Bhaskar 2. The Times Of India 3. Gujarat Samachar

8.28 2007

7.12 2008

6.74 2009

5.98 2007

6.76 2008

6.43 2009

1. The Times Of India 2. Vijay Karnataka 3. Deccan Herald

RAJASTHAN

3.74 2007

3.50 2008

4.78 2009

1. Dainik Bhaskar 2. Rajasthan Patrika 3. Dainik Navajyoti

1. The Hindu 2. The Times Of India 3. Daily Thanthi

GUJRAT

15.66 2009

1. Deccan Chronicle 2. The Times Of India 3. Eenadu

1. Ananda Bazar Patrika 2. The Telegraph 3. The Times Of India

TAMIL NADU

16.01 2008

1. The Times Of India 2. Hindustan Times 3. The Economic Times

1. The Times Of India 2. Mumbai Mirror 3. The Economic Times

UTTAR PRADESH

11.11 2007

KERALA

3.35 2007

2.42 2008

2.48 2009

1. Malayala Manorama 2. Vanitha 3. Mathrubhumi


MagazinesVS Newspapers Magazines kept drifting in ad revenue year-on-year 4.6% Magazines 95.4%

Newspapers 2009

% share

Year Magazines Newspapers 2004 9.9 90.1 2005 10.2 89.8 2006 9.6 90.4 2007 7.5 92.5 2008 5.7 94.3

Deep POCKETS While Pantaloons has retained the No 1 spot, Videocon Industries has leaped the maximum in the big spender race. Advertisers Pantaloons Retail India LG Electronics India Tata Motors State Bank of India Planman Consultant India Samsung India Electronics General Motors India Hindustan Unilever Bharat Sanchar Nigam Congress Videocon Industries Nokia Corporation Dell Computer Corporation Ministry of Health & Family Welfare Hero Honda Motors

Rank ’08 Rank ’09 1 3 6 2 4 5 7 13 17 9 45 55

1 2 3 4 5 6 7 8 9 10 11 12

8 22 20

13 14 15

paid for content. And that is good news.” With a distorted pricing structure, there is a clear danger of the print media advertisement rates being rendered uncompetitive. According to Murali of The Hindu, in a situation when periodic increases in advertisement rates will not hold and discounting in the market is rampant and has spun out of control, the correction in the cover prices is the best thing to happen to the industry. No marketer support The sheer fact that the medium registered a de-growth makes it evident that marketers had lost interest in the print medium. This was despite heavy discounting in rate cards and readership surveys showing an improvement in numbers. Roychoudhaury says, “Advertising yields were under pressure as advertisers looked towards value-led deals. The year 2009 also saw a rationalisation of some unrealistic card rates. For the first time, we saw a leading publication reduce its rates across products and packages.” However, marketers have a different take. Pradeep Shrivastava, Chief Marketing Officer, Idea Cellular says, “Print media continued to be less affordable despite its quality reach.”


Pitch-Madison Media

Advertising

OUTLOOK REVIEW PRINT Mind your LANGUAGE Even though Hindi press has eaten into English ad share, the latter still remains the leader in the pie. 2% 4%

English

4% 5% 5%

6%

Tamil 35% 33%

6% 7%

Hindi

5% 4% 2%

Marathi Malayalam Telugu

7%

Gujarati 9%

Kannada

9%

Rest 27% 30%

The year saw a rationalisation of some unrealistic card rates across publications coupled with discounts. Shashank Shrivastava, Chief General Manager – Marketing, Maruti Suzuki also shares the sentiment. “The print media is getting irrationally expensive.” In spite of the fact that automobiles emerged as the second largest spender on print media, Maruti Suzuki spent just a quarter of its advertising budget on the medium

bringing the allocation down from the previous year’s 48 per cent. The category that emerged as the largest spender on the medium was education, which contributed to the tune of 17.3 per cent to the total print revenue. Amar Ujala’s Mutreja says, “Education was one of the largest

contributors to the ad revenue pie. This has happened because we saw a paradigm shift in the way education clients segmented their TG. The use of regional media by education clients has been seen as a cost effective way to reach the target group.” Automobiles, on its turn contributed 7.8 per cent of the overall revenues overtaking its last annual figure of 6.8 per cent. Following these two top spenders are categories like banking and financial services, real estate and home improvement, telecom, internet and DTH. Public sector banks, government and quasi-government advertising also added significantly to the pie. Trying out a new dish While the revenues from advertising were on a downslide, the newspaper publishers in the country did channalise their energies in creating better products and focussing on innovations in the print eco-system. Jwalant Swaroop, Director, Advertising and Business Development, Lokmat Group says, “Despite the declining advertising bills most print companies continued to invest in enhancing their geography and building readership. Most print media companies brought out new products or improved the current offerings by


The SPENDTHRIFTS Categories Alcoholic Beverages Automobile BFSI Clothing, Fashion, Jewellery Corporate Education FMCG (Homecare) FMCG (Impulse) FMCG (Personal Care) House Hold Durables Media Real Estate & Home Improvement Retail Telecom, Internet, DTH Travel & Tourism Others

adding new supplements.” According to Rahul Kansal, Chief Marketing Officer, Times of India Group, “The print industry in India has realised that there is need to offer the consumer more than what has existed so far. Also I see these steps as strong reasons to keep the print medium relevant to media planners.” The Lokmat group relaunched supplements like Oxygen and Me 4 You in its Marathi daily Lokmat, and Hindi daily Lokmat Samachar. These sup-

2006 (%) 0.7 9.1 10.6 6.7 4.1 15.7 2.6 0.6 3.4 6.2 1.8 7.7 4.9 4.6 4.2 17.2 100.0

2007 (%) 0.4 8.6 7.8 5.9 4.1 16.5 2.4 0.4 3.8 6.1 2.4 7.1 5.9 7.3 4.2 17.1 100.0

2008 (%) 0.3 6.8 8.3 5.1 3.6 17.1 1.9 0.3 3.6 6.5 1.9 6.4 5.5 6.2 4.3 22.2 100.0

2009 (%) 0.3 7.8 7.9 5.5 3.0 17.3 2.5 0.6 4.1 5.3 2.2 6.5 5.8 5.4 3.5 22.5 100.0

Despite rationalisation and discounting of rate cards, marketers found print to be expensive. plements are specifically targeted at the youth. Indore (Madhya Pradesh) based Nai Dunia group came up with Sunday Nai Dunia in 10 cities. It also launched a new supplement, Yuva, in Indore. Dainik Jagran launched its national edition or Rashtriya Sanskaran, as the group likes to call it, from Delhi, alongside, expanding

the reach of its weekly, City Plus. HT Media’s Hindi daily, Hindustan went to two new cities - Allahabad and Bareilly. Meanwhile, Rajasthan based Patrika, which had started its expansion spree into Madhya Pradesh in 2008, went to Jabalpur too in the state last year. Sunil Mutreja, President –


Pitch-Madison Media

Advertising

OUTLOOK

REVIEW PRINT

INDUSTRY SPEAK

N Murali MD, The Hindu “A key take away is the need to effect correction in the distorted pricing structure that had led to dependence on ad revenues.”

Benoy Roychowdhury Executive Director, HT Media

Sunil Mutreja President Marketing, Amar Ujala

“2009 was a mixed bag for print. While low newsprint prices helped on cost side, ad volumes saw sharp reduction.”

“Innovative products are an answer to the latent need of readers and advertisers alike.”

Marketing, Amar Ujala feels that innovative products are “an answer to the latent need of readers and advertisers alike.” The group launched a new title, AU Compact priced at Re 1 focussed on catering to upmarket readers. “Compact is a product that came into being as an acknowledgement of the latent demand of the reader who is looking for news at a lower price point. Also, the innovation being targeted at the youth, helps the advertisers pin-point the reach of their message to the

relevant target group.” In terms of innovation, English dailies too weren’t far behind. The Times of India launched Crest (a weekly), which in the group’s words, is “a journal that allows us the luxury of the 2,000-word piece that’s as rich in style as in substance. One that is serious and stimulating, but quirky and enjoyable too.” Crest is being published from New Delhi, Mumbai and Pune, and has no localised content. DNA too launched The Mag, a magazine distributed along with

Newspapers channalised their energies in creating better products and focussing on innovations.

DNA on Sunday. Even in the magazine space some foreign titles made their debut in the Indian market. These include CFO, Harper Bazaar and Forbes. Indian titles like Open from the RPG group and Career 360 from Pathfinder Group saw the light of day. Where’s my news? The fact that the slowdown limited itself to the metros and the Indian hinterland largely remained unaffected, was also a big relief to the industry. Rural and semi-urban markets proved to be the silver lining for the print media with publishers narrowly focussing on content localisa-


Basant Rathore VP, Strategic & Brand Development, Dainik Jagran

Maheshwer Peri President & Publisher, Outlook Group

“Increasing efficiencies across all levels in the industry is a clear theme that emerged in 2009.’’

“The fact that we realised that the reader needs to pay for what he chooses to read, helped in improving the revenues.”

tion and that is largely seen as a reason why language players had a decent share in business. M V Shreyams Kumar, COO, Matrubhumi group says, “There was a strong tendency towards localisation, with editions getting even more narrowly defined, geographically. More and more, even mainline dailies seem to be adopting, unwittingly, the 'county newspaper' concept.” Also the fact that macro economies of these markets were largely insulated encouraged advertisers to focus their spendings on mediums catering to these audiences. Increased advertising from local advertisers enhanced business in

Jwalant Swaroop Director - Ad Sales, Lokmat “Despite the declining advertising bills most print companies continued to invest in enhancing their geography and building readership.”

Increased advertising from local advertisers enhanced business in semi-urban and rural markets. these markets. Anant Nath, Director, Delhi Press feels that the fact that rural markets did not feel economic pressures did help print get some additional advertising monies from advertisers in these markets. Nath explains, “Because of the fact that rural economies were still buoyant, the advertisers from smaller markets were ready to experiment. This trend helped the print media to a certain extent in an otherwise quiet year.”

Is the worst over? The year overall proved catastrophic for the print medium with declining advertiser confidence and eroding revenues. If quarterly results of some media companies are to go by, the last quarter has brought in some hope for the medium. The PitchMadison Media Advertising Outlook study too predicts a better year for the medium. To know more, turn to the Outlook section. ■ —deepti@pitchonnet.com


Pitch-Madison Media

Advertising

OUTLOOK REVIEW TELEVISION

The new

LEADER

Though the growth of TV has only been 2 per cent, it shows the importance and reach of the medium in a difficult environment. By SHILPI GANGULY

I

n a year which has seen decelerating growth in all media platforms, television, besides internet was able to absorb the shock of the slowdown. According to the Pitch-Madison Media Advertising Outlook, TV has grown by two per cent in 2009 over the previous year. Paltry though the figure is, in a general environment of gloom and negative sentiments, is an achievement of sorts. In an ad pie worth Rs 18,670 crore, television commands the highest share of Rs 8,492 crore, a gain of Rs 173 crore. At 45.5 per cent, a gain of 5.3 percentage points in the ad pie since 2008, TV emerged as the largest player amongst mediums, which till now was led by print. Print fell from 47.4 per cent in 2008 to 41.8 per cent in 2009. Most experts had surmised that 2009 would be a flat year for the television industry. Yet, slowdown or not, there was no dearth of activity

Powered by

28 I Pitch I January 2010

in and around this medium in the past year. TV viewership increased as time spent on TV also went up from 135 minutes per day to 143 minutes per day on weekdays and from 154 minutes per day to 157 minutes per day on weekends (Jan-Aug’08 vs Jan-Aug’09), as per TAM data. The last year saw new programme formats and new channels fiercely competing for eyeballs, both at the national and regional levels. Some are specialised for catering to the needs of up-scale urban audiences, for example NDTV Lumiere and World Movies, while others focus on niche Indian masses, such as Star Jalsha. The general entertainment genre has been an area of hyper activity. Colors, the GEC from Viacom 18 came into its own, upstaging Star Plus from its long held numero uno position. Post the death of old saasbahu sagas, the top three general entertainment channels (GECs) – Colors, Star Plus and Zee TV, have been battling for eyeballs on a week to week basis and no clear number one is in sight yet. The onerous task of increasing viewership was taken on by the GECs with renewed vigour. Audience


RESILIENT Mood While most other media platforms dipped steeply in 2009, TV managed to absorb the shock of slowdown. Year 2005 2006 2007 2008 2009

Earnings (Rs crore) 5,003 6,000 7,110 8,319 8,492

Growth (%) 15 20 19 17 2

fatigue and constant desire for new content kept the channels on their toes with increasing number of high profile reality shows. Rakhi Ka Swayamwar and Sach ka Samna, for instance, were highly popular during the weeks they were aired. In fact, interestingly, the No 1 and No 10 channels were both ready to take risks in the year of slowdown. Growing number of brands created a lot of clutter in the market and brands needed to go beyond the ‘30

Despite the economic gloom, hyper competition within the industry spelt good news for advertising.

seconder’ and engage the audience through more innovative fixed commercial time. Innovative advertising became a trend that seems to stay here. According to AdEx data, overall

Powered by

January 2010 I Pitch I 29


Pitch-Madison Media

Advertising

OUTLOOK

REVIEW TELEVISION

secondages on TV grew at 30 per cent over 2008 in the January-December period. Though heavy discounting was the order of the day, increased ad volumes compensated for lower rates. "There has been pressure on media platforms to reduce rates and the dominant market leaders have managed to hold on to their rates," says G Krishnan, Chief Executive Officer, TV Today. The news genre, according to him, would have witnessed a 4-5 per cent growth in advertising. Categories like real-estate and retail curtailed ad-spend significantly. From 3.3 per cent share in 2008, real estate advertising dropped to 2.8 per cent in 2009. However, FMCG, telecom, and automobile sectors increased spending significantly in the light of intense competition. FMCG and automobile, put together account for more than 62 per cent of advertising on television, where as, it was around 54 per cent in 2008. The banking industry, which cut down spends significantly in the beginning of the year, increased its ad-spends towards the end of 2009. Its share of advertising in the total TV ad pie was 5.7 per cent in 2009. Breaking it down The rapid growth in C&S (cable &

The HSM scenario Regional cable still rules the roost among established players like Colors and Star Channel Share Channel

JAN

NOV

Colors

8

10

Cable Regional

9

7

Star Plus

9

7

Zee TV

6

7

MAX

4

4

Zee Cinema

5

4

Sony Entertainment TV

3

6

NDTV Imagine

2

3

Star Gold

3

3

3

2

Zee Marathi

TG: C&S, 4+ (Jan 2009 & Nov 2009); Source: TAM

satellite) penetration and significant improvement in the quality of content too made television the most important vehicle in terms of reach and engagement. Regional channels were not far behind in reaping the benefits of this trend. It was, in fact, quite a good year for regional channels, overall. As national brands penetrated deeper into rural markets, regional TV became increasingly important as the cost-effective reach vehicle. Regional TV gave brands the ability to do localised and targeted market-

ing. “The 2-3 year trend of brands penetrating deeper into the rural markets strengthened further in 2009. National and regional television, which is often the only means to reach these consumers, is beginning to reap rich dividends. This will further shift advertising spends from other media vehicles to television,� says Uday Shankar, Chief Executive Officer, Star India. The regional channels of Star in West Bengal and Maharashtra, Star Jalsha and Star Pravah, respectively,


REGIONAL Seesaw

did very well in terms of increasing viewership. According to Shankar, these markets have only 20 per cent local advertising today, but with economic growth and affordable prices of regional media, penetration of local advertising will increase over time to the level of Southern channels where nearly 50 per cent of the advertising is local. “For regional news channels, the dependency on regional advertising will increase; and in two years time, 60 per cent will come from regional and 40 per cent from corporate,” says Amit Tripathi, Executive Vice President – Revenue, Zee News. Vijay TV, part of the Star network, has enjoyed approximately 20 per cent year-on-year brand ad revenue growth, says K Sriram, General Manager, Vijay TV. “Though the year saw a slow start, it picked up momentum and is all set

for a growth. There has been no impact of the slowdown on ad revenues,” he adds. One of the biggest advertisers on regional television were retail marketers. Retail investment is pegged to be around 40 per cent, says Sriram. Though the regional market did well from the perspective of ad revenues, in terms of viewership it still has to grapple with the problem of high fragmentation due to the launch of new channels and programme formats. Like in the national market, the fight for eyeballs has intensified in these markets too, often with news channels eating into the share of GECs. Besides Hindi GECs, the biggest gainer in 2009 was the “regional news category, as Telugu, Marathi, Kannada and Bengali news channels smartened their acts and the drive for localised news created stickiness for those languages,” according to Sunil Lulla, Managing Director and Chief Executive Officer, Times Television Group. The key point to note in the south is that the Sun Network and ETV Network GECs have taken the maximum hit in terms of absolute TVR, indicating problems with stickiness, unlike the players in the Hindi GEC space, where there has been a shift in shares while the viewership is on the rise. But the concerned players do not agree. K Subramanyam, Vice President — Marketing, ETV Network, admits that in South India, the reach has gone down by a percent or so, but recovery is imminent. In his opinion, erosion in time spent has happened mainly due to fragmentation of viewership owing to the proliferation of news channels, especially in Andhra Pradesh, which

Regional channels saw some swing in shares

West Bengal

Channel Share Channel JAN NOV Star Jalsha 7 17 Zee Bangla 12 8 Cable Regional 11 8 ETV Bangla 10 7 Zee TV 6 5

Karnataka Channel JAN NOV Udaya TV 15 12 Udaya Movies 9 6 ETV Kannada 6 6 Sun TV 7 6 Suvarna 4 6

Kerala Channel JAN NOV Asianet 26 28 Surya TV 18 17 Asianet Plus 5 7 Cable Regional 6 7 Kiran TV 6 5

Tamil Nadu Channel JAN NOV Sun TV 35 35 KTV 13 11 Kalaignar TV 9 6 Cable Regional 7 6 Adithya TV 0 5

Andhra Pradesh Channel Gemini TV Maa Telugu Teja TV Zee Telugu ETV Telugu

JAN NOV 19 15 9 10 9 11 8 9 9 10

TG: C&S, 4+ (Jan 2009 & Nov 2009); Source: TAM

January 2010 I Pitch I 31


Pitch-Madison Media

Advertising

OUTLOOK

REVIEW TELEVISION

INDUSTRY SPEAK

Uday Shankar CEO, Star India

Amit Tripathi EVP – Revenue, Zee News

K Subramanyam VP - Marketing, ETV

“National and regional TV is beginning to reap rich dividends from rural markets. This will further shift advertising spends from other vehicles to TV.”

“For regional news channels, 60 per cent advertising will come from regional and 40 per cent from corporate, in two years time.”

“Channels might grow, but viewership remains confined to the top few. Innovative content is the key for added sampling and retention.”

Increased penetration will require development of regional clients and new advertisers to use TV medium. have been actively sampled. The news channels aired important events in the first quarter like General Elections, IPL etc. “The number of channels might grow, but viewership remains confined to the top few — or if the new channel is extraordinarily sampled. Fragmentation is a reality, but is not alarming till GECs continue innovative

programming. Innovative content is the key for added sampling and retention,” says Subramanyam confidently. Industry players like Shankar envision the future to be “in smaller India where TV consumption and the advertising pool are set to explode.” However, it also is a reality that increased penetration will increase the need for channels to cultivate and

invest resources in developing regional clients, small clients and new advertisers to use the medium. Buoyant sentiment Television stood to gain last year because in the uncertain environment that was prevailing, advertisers might have diverted spending from print into the more quantified, dynamically measured world of TV advertising. An example of this trend is that of Maruti Suzuki, India’s largest car manufacturer. “In 2008-09 our media spends were about 48 per cent print,


Rohit Sarma ED - Ad Sales, Turner

G Krishnan CEO, TV Today

K Sriram GM, Vijay TV

“Investing heavily on the online platform, Turner has spent 2009 bringing new content and services to users in India such as Game Creator and Toon Creator.”

“There has been pressure on media platforms to reduce rates and the dominant market leaders have managed to hold on to their rates.“

“Digitalisation provides the entry of premium brands into the dominant GEC space, that were otherwise hesitant or stuck to niche offerings.“

41 per cent TV, 9 per cent radio and 2 per cent digital. This mix changed to 69 per cent TV, 25 per cent print, 2 per cent radio and 3 per cent digital in 2009-10,” says Shashank Srivastava, Chief General Manager, Sales and Marketing, Maruti Suzuki. The auto major which saw a slew of launches in recent times, including Ritz, Estilo, New Grand Vitara, Eeco and the SX4, increased its marketing budget to Rs 250 crores in 2009-10, over Rs 200 crores in 2008-09. “The brand building is done partly in print but largely on television. This explains the shift to tel-

evision this year,” adds Srivastava. However, there are players like Canon India, who did not spend anything on TV in 2009. Of the Rs 80 crore total spends, Canon spent Rs 50 crore on BTL activities. On ATL, the company did not have any budget for electronic media. “Our media mix was primarily print, outdoor and we also increased our focus and spend on the online medium. We also experimented with the digital medium and with good results,” says Alok Bharadwaj, Senior Vice President, Canon India. However, in 2010, the company

hopes to spend a considerable amount of their spends on TV. “We are creating a new television commercial and hence our electronic spends will definitely increase,” adds Bharadwaj. Mapping the digits In times when “value for money” has replaced the catch word “innovation”, where marketers and media owners are on a constant look-out for greater bang for the buck, nobody can ignore the opportunities that the digital medium like the DTH or internet throw up. Players like Turner International


Pitch-Madison Media

Advertising

OUTLOOK REVIEW TELEVISION The SPENDTHRIFTS Categories

FMCG remains the leader amongst spenders on TV, followed by telecom and auto. 2006 (%)

2007 (%)

2008 (%)

2009 (%)

Alcoholic Beverages

0.7

1.1

0.8

0.4

Automobile

6.8

6.7

5.6

6.7

BFSI

6.2

6.9

7.7

5.7

Clothing, Fashion, Jewellery

4.9

4.4

3.2

2.8

Corporate

2.8

3.2

3.6

2.5

Education

1.0

1.2

1.5

1.5

FMCG (Homecare)

32.7

26.5

26.8

30.7

FMCG (Impulse)

8.0

8.3

8.2

9.9

FMCG (Personal Care)

14.8

14.0

13.7

15.0

House hold durables

5.2

6.2

5.3

4.7

Media

0.3

0.4

0.2

0.1

Real Estate & Home Improvement

3.7

3.5

3.3

2.8

Retail

0.9

1.1

1.1

0.6

Telecom, Internet, DTH

6.2

10.5

13.9

11.8

Travel & Tourism

1.4

1.3

0.8

0.9

Others

4.5

4.5

4.2

3.9

100.0

100.0

100.0

100.0

and CNN, who are heavy on the internet too, vouch for the platform’s last mile trackabilty. “Turner has been making larger investments in the online platform since 2007. Cartoon Network launched a new community platform in 2008, and has spent 2009 bringing new content and services such as Game

Digital access is restricted to the higher end of the viewing spectrum, though it brings measurability. Creator and Toon Creator, in the India market ,” says Rohit Sarma, Executive Director — Network Ad Sales, Turner International. In 2010, Turner plans to open up

new consumer fee revenue stream through multiplayer online games such as ‘Toon Football’ on www.cartoonnetworkindia.com, as well as a Cartoon Network online store. The


mix of engaging content on TV and internet seems to have paid off well for the channel, as Turner’s entertainment brands have seen a robust growth of over 14 per cent for advertising sales revenue in India, according to the company. The CNN brand (CNN.com; CNN.com International and CNN Money) is available to two billion people via 18 platforms — TV, internet and mobile services. “Dot com is definitely a very lucrative and strong advertising revenue proposition for CNN in the region,” affirms Sonali Chatterjee, Sales Director, India and South Asia, CNN International. However, business managers like Shankar and G Krishnan, are still cautious about the medium, be it internet or DTH. “Opportunities on the digital platform are limited, as long as it is considered a tertiary stream and not an independent business like print or radio,” says Shankar. Similarly, Krishnan too says that the platform “first needs to attract critical volume” to make good of the opportunities being thrown up. The digital access is however, still restricted to the higher end of the viewing spectrum, though it does bring in measurability within that section. “It also provides the entry of premium brands into the dominant GEC space, that were otherwise hesi-

Deep POCKETS HUL, not surprisingly, is the top advertiser on TV. Top TV Advertisers

Rank

Hindustan Unilever

1

Reckitt Benckiser India

2

Procter & Gamble

3

Coca Cola India

4

ITC

5

Bharti Airtel

6

Cadburys India

7

L’Oreal India

8

Colgate Palmolive India

9

Ponds India

10

Smithkline Beecham

11

Johnson & Johnson

12

PepsiCo

13

Vodafone Essar

14

Bharat Sanchar Nigam

15

Tata Teleservices

16

Marico Industries

17

Hero Honda Motors

18

Brooke Bond Lipton India

19

Nestle India

20

tant or stuck to niche offerings,” points out Sriram. Experts believe that the media fraternity should start working closely

with the DTH players to customise non FCT (fixed commercial time) solutions for their clients, as with greater technology coming in ad avoidance in the digital place is not a distant reality. The way forward The single largest trend in 2009, in Krishnan’s opinion, has been consolidation. “Networks had started expanding mindlessly by launching expensive programmes and new channels. The slowdown has given an opportunity to all the players to review their business plans,” he says. Overall, TV will continue to grow and so will revenue; there will be no dearth of opportunity for the medium. However, industry players point to one opportunity that channel/network owners have been trying to exploit but haven’t been successful so far. There is a need to move to a currency that helps in growing revenues in line with audience growth. Looking at the penetration rise, the way forward, according to industry players, should be to start looking at CPT rather than CPRP as that would be the real reflection of the volume increase while ratings might (or in most cases might not) reflect that real increase being just a percentage of the universe. ■ —shilpi@pitchonnet.com


Pitch-Madison Media

Advertising

OUTLOOK REVIEW RADIO

Skipping a BEAT The audio medium whose arrival has been hailed in past as the rise of the next ‘big’ medium, got a jolt with a flat growth amidst other things. By DEEPTI AGGARWAL

T

he radio medium did not play a happy song in 2009. Pegged to be a lukewarm year for the audio medium, the year turned out to be much quieter than expected. The medium earned a total advertising revenue of Rs 681 crore in 2009, up from Rs 662 crore in 2008. Of the total ad pie Rs 18,670 for 2009, radio managed to hold on to its ground in terms of its share. Staying at number four on the list of players commanding the advertising revenue, radio pocketed 3.6 per cent of the total ad revenue. However, the diminished growth rate that the medium registered, displayed that radio even while being a measurable medium to a certain extent wasn’t unaffected by the weak economic sentiments. The medium, which was expected to grow at eight per cent in 2009, was able to achieve only a three per cent annual growth. That is a poor performance, considering that in 2008, the medium clocked a 38 per cent growth. One big reason that saved the day for radio, players feel, is that the medium proved to be a good choice for marketers looking for a better return on marketing investment as it offered a far better reach because of

48 I Pitch I January 2010

its localised programming and reach. The fact that radio allows for far better reach and localisation helped it maintain the growth rate though at a miniscule level. Tarun Katial, CEO, Big FM says, “The year can be marked for its constant innovation and consolidation. Though in 2009, the economic slowdown de-accelerated the growth of the entire media industry, radio emerged to be the least affected by this slowdown, making it a key medium for the advertising fraternity.” Another reason that experts feel worked well in favour of the medium, is that radio moved on from being a

Marginal GAINS The audio medium could not help getting caught in the economic whirlwind. Year

Earning (Rs crore)

2005 2006 2007 2008 2009

200 285 480 662 681

Radio proved a good choice for marketers looking for a better RoI as it offered localisation and reach. vanilla medium selling ad spots to a medium providing media solutions to clients through tailor-made advertising and branding solutions. The fledgling radio industry in India is on the verge of yet another surge of expansion, thanks to the third round of licensing on the anvil. It will be adding 700 frequencies across 237 cities, to the existing over 250 stations across 90 cities. A glance at how the industry fared

in 2009 shows that the radio industry lacked any major developments in the past year, with the only exceptions being Red FM and Big FM. Red widened its network through consolidation with as many as 50 stations under its belt. Big too expanded its network through agreements with Radio Dhamaal and Rangila FM; and an exclusive content tie-up with BBC Worldwide. While significant issues like open-


Pitch-Madison Media

Advertising

OUTLOOK

REVIEW RADIO

The DOWNSLIDE There was a sudden diminuendo in the growth rate of radio, which was performing well till 2007. Growth (%) 68

43 38 33

3

2005

2006

2007

ing up of more content options on the radio and allowing content other than music to be aired on radio still remained unresolved; music royalty was another major issue that hogged the limelight. Engagement with audiences was also one of the themes that brightened the year for the medium. From fan clubs on the internet and cities to ‘Facebook on radio’ to outdoor meets to social causes, radio stations have

50 I Pitch I January 2010

2008

2009

gone out of their way to interact and engage their audiences. Social media or social networking sites too were seen experimenting with ways to engage with the radio audiences. This all will see real growth and traction, once, online streaming of stations is allowed.

Democratisation The fact that 2009 was an election year proved to be a blessing for the medium is a unanimous statement from all the players. Apart, the medium proved itself to be a cost effective and versatile medium with new sponsorship models, better integrations, better reach and brand loyalty. The year 2009, witnessed newer categories of advertisers experimenting with the medium for the first time. S Keerthivasan, Business Head, Fever FM, says, “General elections boosted the ad spends on radio, wherein, radio played a key part in the campaigns of political parties. Some players from new categories like airlines also spent a great deal in the last fiscal.” Education, FMCG, television, automobiles, agriculture, real estate, consumer durables, retail and government sectors were some other categories that favoured the medium. Localisation saves the day Marketers analysed the ROI and high reach of radio when their budgets were curtailed, resulting in a number of first time advertisers coming in, not just from the metros, but also from the tier II and III cities. Prashant Panday, CEO, Radio Mirchi, feels that while it is true that 2009 did not spell a great relief for radio in terms of hardcore numbers, but the fact that marketers – because

The year 2009 witnessed newer categories of advertiser experimenting with radio for the first time.


BENGALURU Bosses Big FM trumped overall leader Radio Mirchi in the Bengaluru market followed by FM Rainbow Station Big FM Radio Mirchi AIR FM Rainbow Radio One Radio City Fever FM S FM AIR -Vividh Bharati Radio Indigo Gyan Vani Akashavani Others

Wk 1-13 Wk 45-48 23.74 19.27 18.58 17.90 11.39 10.62 9.57 8.30 8.96 12.20 8.31 15.13 9.27 8.27 4.35 4.87 3.37 2.02 1.16 0.55 1.3 0.45 0 0.00

Radio moved on from being a vanilla medium selling ad spots to a medium providing media solutions.

DELHI Dons Radio Mirchi from the ToI group retains its clout in its oldest market Delhi follwed by HT Media’s Fever FM. Station Radio Mirchi Fever FM AIR Gold Radio City Red FM Big FM Radio One Meow AIR FM Rainbow Hit 95 FM Vividh Bharati Akashavani Others

Wk 1-13 Wk 45-48 26.84 24.45 12.75 18.85 14.76 16.47 9.54 7.80 9.14 9.40 6.55 6.95 7.54 6.90 4.04 2.77 3.46 1.87 3.32 2.47 1.76 1.62 0.27 0.4 0.03 0.00

of forced ROI pressures – tried the medium and got the bang for the buck is a positive sign to be taken from the year. Highlighting the fact that listernership showed positive signs, Panday says, “In spite of all its troubles, the radio industry has retained its grip on huge audiences. This helps media planners and advertisers – who want to be sure of where their money is going. It also indicates a maturing radio industry in India.” Anuj Singh, Head – Marketing, Red FM touches upon radio’s USP in these tough times, “Radio is one of the few mass media, which appeals to direct marketers. Since radio is all about a personal connect with local appeal, advertisers have been able to use this medium to add the missing X factor in their campaigns, i.e. a believable and real consumer connect.” Apart from this, expansion of different radio brands in Tier-II cities and towns also helped the medium gain some pace. Panday explains, “It’s a fact that a lot of India’s economic growth is now happening in the smaller towns – and going forward, this will be the key theme of radio in the smaller markets. Further, in most small markets, radio is relatively new – hence, the growth rates have been higher as it’s still in its early cycle of growth.” Big FM’s Katial shares Panday’s sentiments. “Recession and economic meltdown opened the Pandora’s box for spenders, wherein, radio emerged as the best solution provider, with excellent ROI and mass reach. This led to many Tier-II and Tier-III cities and advertisers

January 2010 I Pitch I 51


Pitch-Madison Media

Advertising

OUTLOOK REVIEW RADIO opening up to radio as an advertising medium,” he says.

KOLKATA Kings The usual suspects Radio Mirchi and Big FM are the top two contenders in Kolkata market. Station Radio Mirchi Big FM Friends FM Aamar FM Red FM

Wk 1-13 Wk 45-48 19.11 19.9 16.71 16.72 12.67 14.05 9.15 10.47 8.03 7.55

Radio One Fever FM Meow AIR FM Rainbow AIR Gold Akashavani Power FM Vividh Bharati Others

7.8 7.9 6.3 4.44 3.27 2.09 1.53 0.91 0

5.9 7.55 5.75 3.77 3.67 2.67 1.27 0.67 0.00

From fan clubs to outdoor meets, engagement with audiences was one of the themes of 2009 for radio.

MUMBAI Masters Mumbai places Radio Mirchi at helm in listernership sweepstakes with the refurbished Red FM following. Station Radio Mirchi Red FM Fever FM Big FM AIR Gold Radio City Radio One AIR FM Rainbow Meow Akashavani Vividh Bharati Others 52 I Pitch I January 2010

Wk 1-13 Wk 45-48 14.84 17.90 16.83 14 9.9 11.65 14.9 11.67 11.22 12.95 14.13 13.1 7 6.17 4.25 5.27 2.68 1.62 2.27 2.05 1.92 3.57 0 0.00

Heavy discounting Heavy discounting being the flavour of the year, radio too couldn’t save itself from the discount onslaught and saw market leaders offering airtime at throwaway prices. According to Vineet Singh Hukmani, CEO, Radio One, what hurt the industry most was the fact that at the beginning of the year, market leaders went for huge discounts leaving no other options for the smaller players but to follow suit. “The spots were offered for extremely low prices, which is now resulting in lower advertising revenues despite the fact that ad volume showed a healthy growth.” says Hukmani. Anuj Singh, Head – Marketing, Red FM agrees that discounts did a lot of damage. “The highlight last year was that growth in advertising volumes was not matched by growth in revenues because of rampant discounting.” However, Singh maintains that the hit to the radio industry was possibly lesser than other mediums. Mirchi’s Panday too agrees on this. “There’s been an erosion of pricing by 20-22 per cent for Mirchi. I think it’s been steeper for most other players,” Panday says. Keerthivasan of Fever FM feels that the radio as a medium did do well but as the entire industry was in a discounting mood, efficient pricing was the key competitive edge that radio had to leverage while converting new advertisers. “The trend during the recession period was that the radio industry helped the advertisers by reducing ad pricing and offering


Pitch-Madison Media

Advertising

OUTLOOK REVIEW RADIO

Radio ACTIVE Activations or on-ground connect helped the radio brands to factor in added advertising revenue.

T

o sell as a better medium, radio players moved on from selling spots and content integration solutions to media solution. Creative ideation and innovations beyond selling spots, is what radio players call it. Radio players have worked towards reaching out to advertisers and demonstrating advantages of radio as an advertising medium. Prashant Panday, CEO, Radio Mirchi, says, “Creative ideation is a strong theme that has been around for some time, it only became stronger, during the downturn.” Explaining the trend further, he says, “A larger focus on the creative part of selling has been the key. Activations became huge – as advertisers moved their monies away from businesses like TV, towards a more touchand-feel experience.” Mirchi has a dedicated arm to handle the on-ground connect for its clients under the Mirchi Activations banner. Affirming Panday’s observation is Tarun Katial, his counterpart at Big FM. Katial also feels that radio evolved from being an audio medium to a solutions provider. “One of the biggest propositions which radio offers is its localised connect and riding this value addition, many spenders including those from semi-urban and rural markets have reaped great benefits,” says Katial. Big FM also launched its business vertical ‘BIG Rural’ to offer holistic solutions in rural marketing and activations space. Radio One’s Vineet Singh Hukmani also says that the reason Radio One managed an eight per cent growth in the markets that the station operates in, is because of the fact that the brand focussed on the innovations and positioned itself as an innovator in these markets. “We are positioned as metro innovators for our clients and I feel this was one of the biggest reason why we were able to go against the flow and garner eight per cent growth,” says Hukmani. However, the players do accept the fact that deceleration of the economy did affect radio’s fortune as advertising revenues were negatively impacted. The fact that discounting was an accepted practice across media platforms in 2009, it did affect radio as well. But what spelt good news for radio operators is the fact that the ad volumes on radio went up. ■

54 I Pitch I January 2010

Prashant Panday CEO, Radio Mirchi “In spite of all its troubles, the radio industry retained its grip on audiences. This indicates a maturing radio industry in India.”

more value additions,” he says. Staying afloat But the players are taking a heart out of the fact that radio managed to stay afloat in terms of holding onto its audiences and also by getting more advertisers on board. Harrish M Bhatia, COO, My FM, shares, “Radio witnessed a healthy growth rate in terms of numbers as well as taste of listeners. We managed to avoid the negative impact of slowdown by focusing our energies into marketing the benefits of radio as a flexible and cost-effective medium for the advertisers.” Panday also feels that the sheer fact that radio held onto listernership has been one of the key take-


INDUSTRY SPEAK

Tarun Katial CEO, Big 92.7 FM

Anuj Singh Marketing Head, Red FM

“Recession and weconomic meltdown opened the Pandora's box for spenders, wherein, radio emerged as a solution provider, with excellent ROI.”

“The highlight last year was that growth in advertising volumes was not matched by growth in revenues because of rampant discounting.”

aways for the radio medium in 2009. “Good news is that volumes have surged. Why would volumes surge if advertisers did not get results from radio? So that’s really good. Going forward, these high volumes of 2009 will stay and pricing will improve, improving the revenues of radio again.” Panday opines.

Vineet S Hukmani CEO, Radio One “The spots were offered for lower prices, which is now resulting in lower revenues despite healthy growth in advertising volumes.”

Heavy discounting being the flavour of the year, radio too couldn’t save itself from the discount onslaught. As radio enters a crucial phase in 2010, with the industry trying to resurrect and expand on the one hand, and grappling with functional issues on another, it would be inter-

esting to see how content differentiation and increased competition facilitates growth of the medium in coming times. ■ —deepti@pitchonnet.com


Pitch-Madison Media

Advertising

OUTLOOK

REVIEW INTERNET

Happily CLICKING away Internet was the fastest growing advertising medium for the second consecutive year, with more number of SMEs also coming on board. By ASHISH JHA

T

he virtual world has braved sistently and with conviction,” he says. experimental advertisers adopted the As a result the major players web for more continuous and consisthe real world downturn blows in the smartest way. strengthened their market position tent campaigns. “Different companies While other mediums either and the leaders got stronger as more utilised the medium cautiously crawled or took a step back, money came to the medium. Sanjeev and judiciously, and put all through the year 2009, internet Bikhchandani, CEO, Naukri.com, says, emerged as the fastest growing adver- “The slowdown separated the men tising medium for the second consecu- from the boys. Those who created real tive year with its evolving character value for the customers beat the others Rs 250 Cr luring more and more players and by a mile,” he elaborates. 2007 users to the domain. Parminder Singh, Business Head, More engagement Google India, sums the mood aptly. With new formats evolving “Creativity with efficiency kept the for internet advertising, internet thriving in 2009,” he says. Rs 165 Cr That advertisers reiterated their * * 2006 confidence on the online medium is evident from the fact that internet advertising grew by 25 per cent. According to the Pitch-Madison Media Advertising Outlook 2010, internet clocked a total revenue of Rs 453 more money into internet as the Rs 110 Cr * crore in the ad pie medium gave them an opportunity to 2005 worth Rs 18,670 crore in map themselves in the market as 2009. That is an well. The advertisers are picking up increase of Rs 90 crore quality model of internet ads rather *Growth (%) over the previous year. The than the quantity model,” says Vij, share has grown by 0.7 percentage adding, “They are differing from ‘cost points in the ad pie. increasing number of advertises per impression’ or ‘click through According to Manish Vij, Co-founder, exuded confidence in the medium. rate’ models. They are picking a ‘cost Quasar Media, the medium consolidat- Advertisers focused more on return- per engagement’ model which means ed on its edge over other mediums in on-investment (RoI) and opted for the advertising impressions are free and the year 2009. “Those who experiment- medium because of its better measur- advertisers pay only when a user ed on the medium earlier, invested con- ability. That also meant that many engages with their ad unit.”

52 *

50

57

60 I Pitch I January 2010


Rs 453 Cr 2009

Rs 363 Cr 2008

25 *

45 * Many experimental advertisers adopted the online medium for more continuous and consistent campaigns.

ONLINE ads for different categories Active internet users who have clicked on online advertisements (Base: 18 lakh) Online advertisement for different product categories

Per cent

Mobile Phone/Instruments

58

Loans by Banks/Financial

50

Entertainment Sites

42

Job Sites

40

Investment options like Mutual Funds

39

Education/Training related

37

Computer/Laptop/Printer/Scanner

38

Tickets

35

Personal Products

28

Insurance

28

Hotels & Holiday Tours/Packages

25

Automobile

23

Matrimonial

20

The range of engagement varied as the user got to interact with an ad in a number of ways, including playing a game, participating in a poll, rolling over an ad unit for a specified amount of time or taking a product tour. While almost all the advertisement categories saw an increased interest online, categories like FMCG, automobiles, telecom, education and financial services significantly increased their ad spend online and led the overall growth. Gen-X spurs V factor The growth online was led by Gen-X, which also happens to be the target audience for most marketers. According to comScore, youth in the age group of 15-24 are the heaviest users of internet. While the increasing number of young users boosted the ad-prospect on the medium, the evolving character of online advertisement also brought a significant change in the internet ad patterns, for example, video advertisements. “Use of video on internet has picked up this year. It has also integrated the utility of the internet. People have stated using online video heavily for their comprehensive knowledge. In a similar fashion, advertisers are picking up video advertisement as an important tool. Consequently ads in the form of banners carrying video contents are becoming more popular,� says Vij. Recognising the edge internet has over mediums, in terms of reach, measurability and cost, new players like small and medium enterprises (SMEs) too have come on board.

January 2010 I Pitch I 61


Pitch-Madison Media

Advertising

OUTLOOK REVIEW INTERNET INDUSTRY SPEAK

Parminder Singh Business Head, Google India

Manish Vij Co-founder, Quasar Media

Sanjeev Bikhchandani CEO, Naukri.com

“Growth of telecom has boosted the prospects of mobile internet network. 3G smartphones will allow close-to-normal webbrowsing experience.”

“Advertisers are moving towards a ‘cost per engagement’ model where they pay only when a user engages with their advertising unit.”

“The slowdown separated the men from the boys. Those who created real value for the customers beat the others by a mile.”

“Increasing number of SMEs took to the digital way of operating their business. The fashion to keep business alive for 24X7 on internet caught their attention,” says Singh, adding, “The measurability factor helps them get an opportunity to find their voice on the medium and get assessed.”

given yet another boost to the prospect of on-line advertising, especially in the rural areas where bringing adequate infrastructure for the broadband connections still looms large. The mobile internet looks to be an easier way to explore and engage the rural market. According to a study released by IAMAI (Internet and Mobile Association of India) and IMRB (Indian Marketers Research Bureau),

there are close to 12.7 crore mobile subscribers who have internet ready mobile devices. That is effectively 27 per cent of the total subscriber base of 47 crore. “The immense growth in the telecom sector has boosted the growth prospects of mobile internet network in the country, especially in the rural market. 3G smartphones with large screens, such as the iPhone, BlackBerry and others will

The mobile way The telecom revolution in India has


further allow mobile users a close-tonormal web-browsing experience,” says Singh. But some industry players say that the mobile internet is yet to play any major role in the growth of internet advertising as the base of active users is still very low. “The mobile internet will take another couple of years to benefit the ad industry as the low active user base does not encourage much advertising,” says Vij, indicating to the study finding which puts the active user base at around 20 lakh only. The study states that, of the 12.7 crore subscribers who have internet ready mobile devices, less than 10 per cent accessed internet over their mobile at least once in the last one year, and that there are only about 20 lakh users accessing internet through their mobile phones on an active basis; which means they use internet on their mobile phones at least once a month. Let’s play Online gaming too is giving a major boost to the advertisers to engage with the youth online. The IAMAI-IMRB report suggests that the internet is the driving force for the gaming market in India. According to a recent market report, the gamers are said to consti-

TOP online portals Audience: All Persons, 15+ at India Home / Work in November 2009 Total Unique % Reach Visitors (000) Total internet : Total Audience

36,535

100.0

Google Sites

31,166

85.3

Yahoo! Sites

26,236

71.8

Microsoft Sites

13,856

37.9

Facebook.com

11,243

30.8

Rediff.com

9,917

27.1

Wikimedia Foundation Sites

9,437

25.8

Times Internet

7,169

19.6

Ask Network

7,053

19.3

Network 18

7,024

19.2

Indian Railways

6,466

17.7 * Source: comScore

tute over 40 per cent of the total active internet users in India, which is a whopping 89 per cent increase since 2007. “Online gaming is evolving and advertisers are out to utilise the option as a good medium for brand promotion. The increasingly available free gaming content has also added more users and helped the advertisers to explore the platform in a more effective manner,” says Vij. Besides, internet portals introduced

products with cross-tie ups with mobile platforms to broaden their base and cash in on the fastest growing mobile subscriber market in the world. Rediff.com services such as latest news updates available on the mobile handsets and partnership between Vodafone and Shaadi.com for mobile matrimony on Vodafone enabled mobile phones are a few examples. ■ —ashish@pitchonnet.com


Pitch-Madison Media

Advertising

OUTLOOK

REVIEW OUTDOOR

The CLEAN slates The Outdoor advertising industry could not withstand the slowdown storm and got gulped in a 20 per cent de-growth. By SHILPI GANGULY

T

he third largest traditional media format, with 6.1 per cent share in the national ad pie of Rs 18,670, the outdoor industry has met the projections made in the mid-term review of the Pitch-Madison Media Advertising Outlook. However, as compared to 2008 when the ad revenue for the outdoor industry stood at Rs 1,419, the industry has had a negative growth of 20 per cent, falling to Rs 1,135 crore. The last quarter of the year 2008 saw the beginning of the economic slowdown, which continued well into the first half of 2009. This reflects in our data, which shows that in H1 of 2009, the outdoor industry saw as much as 30 per cent decline at Rs 477 crore (as compare to H1 2008). With only 11 per cent decline at Rs 658 crore in H2, the industry was on the recovery path. Sunder Hemrajani, Managing Director, Times OOH, points out, “Advertisers were very cautious during the first half of 2009, especially in the January-March quarter. All of them were looking to conserve funds.” According to him, heavy discounting was the order of the day, while fierce

negotiations were adopted for all campaigns. “Billboards and bus queue shelters (BQS) went for as much as 50 per cent and 20-25 per cent discount respectively,” he adds. Perhaps, as Rabe Iyer, Business Head, Allied Businesses, BIG 92.7 FM, suggests, lack of proper accountability and measurement resulted in this

Except mid-size hoardings, both large format hoardings and lamp-post kiosks took a hit last year. 66 I Pitch I January 2010

medium being one of the worst hit amidst the slowdown. “One of the key takeaways from 2009 has been revaluation of properties and rationalisation of tender bids,” he says. Indrajit Sen, President – Projects, Laqshya Media, on his turn says that overall revenues went down by about 30 per cent to about 2007 levels, which he estimates to be around Rs 1,400 crore. (The Pitch-Madison Media Ad Outlook 2008 indicates the same to be


Pitch-Madison Media

Advertising

OUTLOOK REVIEW OUTDOOR Rs 1,275 crore though.) With the exception of mid-size hoardings, which did fairly well, large size hoardings in 2009 largely went vacant. According to Noomi Mehta, Managing Director, Selvel Vantage Group, the smallest format, lamp-post kiosks too did badly, due to the large numbers required to make an impact. “Across the industry, sales dipped between 40 per cent and 20 per cent ,” he says. That exit costs for the industry players are high, did not help matters. Also since the license fee is fixed, beyond a point, it was not possible for an outdoor agency to cut costs. Therefore, it was all the more important that overall valuation of properties must be reasonable. Industry players suggest that as banks charge around 12 to 13 per cent interest on loans for biddings, the returns obviously should be higher at around 18 to 20 per cent. However, all are not unhappy. Erosion in pricing may have acted as an advantage to some. Ishan Raina, CEO, OOH Media, says, “Erosion in pricing has resulted in leaders in each category getting stronger at the cost of weaker and smaller player. Clients have got excellent value from all media in 2009.” Apart from that there have not been any major movements in the outdoor industry last year. According to Sen, no new formats and no major new contracts or tenders saw the light of the day. “Nothing especially new has been seen in any of the top 10 cities,” he says. Mumbai and Delhi street furniture contracts remained on paper only and the tenders that could have made the difference – Delhi domestic air-

68 I Pitch I January 2010

Facing rough

WEATHER Outdoor lost heavily in the race for ad revenues. Year Earnings* 2005 870 2006 1,000 2007 1,275 2008 1,419 2009 1,135

Growth 9% 15% 28% 11% -20%

risk inventories like Haryana Roadways (HR), DMRC (Delhi Metro Rail Corporation) Line-2 structures, cantilevers and gantries in Hyderabad and the Mumbai street furniture project. For Sen, recovery from sub-40 per cent occupancy levels to near-75 per cent occupancy – without any closures, bankruptcies, distress sales, proves the resilience of Indian ad industry and economy. The year 2009 also saw acceptance of digital OOH. As companies felt the

*Rs Crore

Indian Outdoor Survey is the first step to bring credibility to the outdoor medium. port’s Terminal 3 and Mumbai’s Terminal 1C – didn’t move beyond the evaluation stages. The gloom fades gradually The turning point, for the outdoor industry, according to Hemrajani, was the period of general elections in April and May 2009, after which the situation began to look up. According to estimates, the general elections pumped approximately Rs 350 crore into the ad industry, which came as a welcome relief after a dry first quarter. The industry’s perspective on a tough-to-handle year has been one of caution and measured optimism. Optimisation of spends was the priority on the minds of business managers. Efficient and cost effective use of smaller formats like BQS and transit media saw wider acceptance with advertisers, mainly because of their reach and frequency. Players like Big Street, focussed on investing in low-

pinch of spending on advertising on traditional mediums, they began experimenting with newer mediums. They explored digital OOH and found it an effective medium giving returns on investment. According to Raina, the sector (digital OOH) grew between 30 and 35 per cent in 2009. He hopes for revenues to double in 2010. “Currently, the growth is centred largely to Tier-I cities, with metros accounting for more than 75 per cent of the total digital OOH market,” he adds. In the opinion of Rajan Mehta, Founder and CEO, LiveMedia, digital OOH can boast of significant differentiators. Firstly, it provides captive audience network, especially where people are sitting and spending leisure time. Secondly, digital OOH can engage with consumers through its content. Currently, LiveMedia has 16 branded programmes, which follow a theme; and content such as ‘arrange the words’ is designed to involve


Pitch-Madison Media

Advertising

OUTLOOK REVIEW OUTDOOR groups of people. Both Raina and Mehta of LiveMedia emphasise that the slowdown has led to introspection among clients, who are now more open to experimenting with newer mediums. “Through digital OOH, advertisers are able to reach their target audience at lower budgets,” says Rajan Mehta. Telecom keeps outdoor buoyant Different media owners, Pitch spoke to, reiterated that the telecom sector has been one of the top spenders in the medium, commanding a large chunk of the Rs 1,135 crore outdoor ad pie. Besides telecom, some other large spenders have been media and entertainment, automobiles, BFSI (mainly Banking and Mutual Funds), retail and real estate. FMCG also caught up fast with the traditional spenders on outdoors. “As per our internal tracking estimates, about 40 per cent of the outdoor advertising came from telecom brands. BFSI and entertainment contributed to around 15 per cent, while FMCG hovered around five per cent, followed by automobile advertising,” says Iyer. Brands such as Vodafone, Airtel, Aircel, Loop Mobile, MTS and Tata DoCoMo launched pan-India outdoor campaigns on a large scale. In a year of slowdown, grabbing the ‘mindshare’ of consumers became even more important than grabbing attention or wallet-share. Various innovations were tried out for this purpose. One of the most memorable example is that of the Aircel lifeboat. Aircel stuck an empty raft on a billboard near Milan Subway in Mumbai, an area notorious for flooding during the

70 I Pitch I January 2010

monsoon. The board simply read “In case of emergency, cut rope.” Sure enough, the area flooded during the monsoon and people were seen using the raft on July 13 and 14. Besides generating goodwill among people, the raft innovation had the media buzzing. “As a marketing focussed operator, we create opportunities to engage with consumers in a relevant manner, either through the message or the medium. In some cases, the medium becomes the mes-

“With greater measurability attempted by OOH, the medium will gain more transparency and interest,” he says. Conclusion “The launch of India Outdoor Survey (IOS) is the first step to bring credibility to the medium. There will be more acceptability of OOH as a mainline medium,” says Iyer. IOS, the audience measurement system for outdoor media in India, was launched by Media Research User's

Advertisers are getting innovative to grab the mindshare of consumers; eg, the Aircel lifeboat. sage,” says Rahul Saighal, Chief Marketing Officer, Aircel. Another, much talked about outdoor innovation is that of Idea’s launch of Blackberry services in Mohali, Punjab. To announce the launch, Idea converted a pole into a seven-foot, built-toscale rotating Blackberry device, displaying the words “Work in progress” on the screen. Pradeep Shrivastava, Chief Marketing Officer, Idea Cellular, however points out the need for greater measurability in the medium.

Council (MRUC). It comes as a planning software that provides details on 4,500 outdoor sites in 1,000 road stretches in Mumbai. With an attempt to bring credibility to the outdoor medium like its counterparts and with marketers beginning to open their purse-strings a bit, things are looking positive for the industry. It may have been washed out in 2009, but the industry hopes for a vibrant come back. ■ —shilpi@pitchonnet.com


Pitch-Madison Media

Advertising

OUTLOOK

REVIEW CINEMA

WRECKED! The year was quite a wreck for the tinsel town, as audiences rejected movies and advertisers, the medium.

By ASHISH JHA

T

he year 2009 for Indian Cinema concludes with the troubled Bollywood taking cues from the latest blockbuster ‘3 Idiots’ and humming “All is well” as advertising on the medium dipped to a dismal low. “The year 2009 was not a good one for the Bollywood as the industry produced mostly low-quality films which struggled to recover even their production cost,” says renowned film critic Rajeev Masand. Though a couple of hits in the form of ‘3 Idiots’ and ‘Paa’ towards the fag end of the year did bring a sigh of relief to the industry, the audience, throughout the year, kept rejecting

72 I Pitch I January 2010

the big starrer and heavy budget movies one by one, hence making the advertising market on the medium too fare badly. The same reflects in the Pitch-Madison Media Advertising Outlook 2010 as well. The ad-spend on the medium registered a negative growth of 20.15 per cent and dipped to a level lower than that of the year 2007 when it garnered a handsome Rs 104.5 crore. Even as the economy was on the recovery path, advertisers exhibited low confidence in cinema advertising. The medium continued to hold its ad pie share of 0.6 per cent vis-à-vis year 2008, but the total ad revenue on cinema shrunk by Rs 26 crore, as it

could garner only Rs 103 crore against a projected Rs 116 crore in the mid-term review of our Pitch-Madison Media Advertising Outlook 2009. “This was a bad year for the industry. The production cost increased but the low in the market continued for the first three quarters of the year,” says Ramesh Taurani, film producer and owner of production house, Tips. Though FMCG remained one of the top advertising categories on the different mediums overall, its spend on cinema remained low. Also, hard negotiations during slowdown drove down rates and hence revenues. “The economic slowdown made


A lackluster year While movies like Kaminey, Love Aaj Kal, New York, Wanted, Wake up Sid, Ajab Prem ki Gajab Kahani, Luck By Chance, Dev D and Rocket Singh – Salesman of the Year, did manage to do average business, most of the films with big stars and from renowned banners failed to attract

All Is NOT Well 2009: A dismal year for cinema as ad revenue fell steeply Year

advertisers focus on the more visible mediums like print and TV,” says Bobby Pawar, Chief Creative Officer, Mudra Group. “In-film advertising was also hit as overall budgets for cinema advertising came down. Advertisers did not find the medium too useful,” he adds. Also, the two month-long conflict between film producers and multiplex owners in mid-2009, only added to the worries of the tinsel town, which was grappling to find a way to come out of the shadow of slowdown.

Earnings (Rs Crore)

Growth (%)

2005

32

39

2006

55

72

2007

104.5

90

2008

129

24

2009

103

-20

the audiences to the theatres. The industry players cite lack of appealing themes as one of the major reason for the overall bad performance. Devang Sampat, Senior VicePresident, Cinemax, says, “The audiences have become more quality conscious. So, the content part is becoming more important and the production houses and the producers can no longer afford to play with the audience with a repeat story.” Film producer-director, K C Bokadia has a similar observation, “There were very few sensible films.

Industry players cite lack of appealing themes as one of the major reason for a bad performance.

Good music, which is the very basic to lure the Indian audience to the theatres, was rare during the year.” However, Gautam Dutta, Chief Executive Officer, Cinemedia, PVR Cinemas, disagrees. He feels it was lack of proper marketing strategy on the part of film makers that made majority of films bite the dust. “We have had variety of films in the year gone by. Some of the films could not do well, as the film makers failed to adopt a proper marketing strategy.” Evolving ad trends Though the low market sentiment hit ad revenue growth of almost all the mediums, new trends in advertising, promotion and marketing evolved in the year 2009. The distributors spent heavily on the innovative ways of marketing. “The content is always an important thing. But it does not always script success for a film. Though, the content part has evolved a lot over the years, the trends in marketing and promotions and the advertisement have witnessed a sea-change over the couple of years. The entire process of post production has been revolutionised.” says Dutta. The trend is emerging to customise the marketing and advertising strategies, treating each film as a separate brand. “Advertisers are very particular about the kind of perception that needs to be created in the minds of the audience and who exactly, is the target audience. They are accordingly using the mediums to touch the consumers’ sentiment in the most cosy hours and hence generating their interest in the product in a subtle way,” adds Dutta. ■ —ashish@pitchonnet.com January 2010 I Pitch I 73


Pitch-Madison Media

Advertising

OUTLOOK 2010

Road to RECOVERY By SAM BALSARA & AMIT AGNIHOTRI

W

ell, there was a lot of bad news that 2009 offered, but the good news is that the last few months of 2009 have certainly given us hope. Pitch-Madison Media Advertising Outlook 2010 forecasts that in the new year, media and advertising industry will certainly fare better – we have started walking the road to recovery. The study forecasts a 13 per cent growth in 2010, which will put the Indian ad industry size at Rs 21,145. What calls for this bullish forecast? Many factors actually. Overall the Indian economy is in a better shape, with top policy makers and economists recommending that Indian economy will grow at 7.5-8 per cent this year. That’s about 2 per cent higher than 2009. Speaking on the positive outlook for 2010, Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, forecasts “definitely 7 per cent or a little more” growth. In this backdrop, both government & corporate sector are ready to open their purse strings and increase their media spends. Government has lined up a massive PSU Disinvestment programme, which will see an IPO every few week. News & Business media will certainly benefit from this programme. Most marketer’s that Pitch spoke to

The FUTURE Bright The year 2010 promises good returns for all mediums. Rs 108 Cr Rs 817 Cr

1% 4%

Rs 1,305 Cr Rs 680 Cr 6%

Print

3%

40% Rs 8,470 Cr

TV

46% Rs 9,766 Cr

Radio Cinema Outdoor Internet

were bullish on 2010. “Yes, we are increasing our marketing budget both for mass as well as direct marketing. Our marketing budget will be in excess of Rs 35 crore,” says Vinay Bhatia, VP Marketing and Loyalty, Shoppers Stop. Ajay Kakar, CMO – Financial Services, Aditya Birla Group says, “In 2009 our marketing spends were in excess of Rs 75 crore. And we will continue to increase our investments.” Adds Alok Bharadwaj, Senior VP, Canon India, “Overall we are looking at spending around Rs 110 crore on marketing.” Categories like auto, telecom, FMCG, IPOs and education will power advertising in 2010. As a result, our study anticipates that Television media will register 15% growth, while print media will rebound with a 9 per cent growth. Radio will

grow at 20 per cent and internet will have the fastest growth at a whopping 50 per cent. Detailed analysis follows. While a lot is said about what to expect from 2010 in pages ahead, and what should the industry do to keep growing, a short quote from John F Kennedy sums up well – “When written in Chinese, the word "crisis" is composed of two characters. One represents danger and the other represents opportunity. Hopefully Indian media has learnt its lessons from 2009, and will rebound with greater strength. The first nine months of the last calendar year (January to September 2009), had the industry sweating. But buoyed by the festive spirits, the ad industry recovered only towards the end of the year. ■

January 2010 I Pitch I 75


Pitch-Madison Media

Advertising

OUTLOOK 2010

PRINT

Getting THICKER again After a bleak year, print is expected to jump back with thicker copies. By DEEPTI AGGARWAL

R

ecovering from the shock, the print industry promises to make a strong come back in 2010. Though the absolute numbers do not project a stupendous growth for the print medium, the very fact that the medium looks promising to be on a comeback trail from a degrowth in 2009 to single digit positive growth in 2010 is something to take heart from. The Pitch-Madison Media Advertising Outlook expects the print media to register a single digit growth of 9 per cent in the year 2010 to gain a figure of Rs 8,470 crore, a level achieved in 2007. The medium will, simultaneously lose 1.7 percentage points in the overall advertising pie (projected to be Rs 21,145 crore in 2010) to have a share of 40.1 percent. The players in the print media are treading cautiously in view of the slow recovery prospect of the medium in 2010. N Murali, Managing Director, The Hindu, says, “There are signs of a sustained recovery. The outlook for 2010 is cautiously optimistic as the worst is certainly behind us.” Sharing Murali’s optimism is, Maheshwer Peri, President and Publisher, Outlook group, when he says, “The year 2010 has taken off in

76 I Pitch I January 2010

New

RISING Beaten by the slowdown the print media looks set to fight for its place in the ad pie.

2009 2010 * * Earning 7,806 8,470 Growth -21% 9% * Rs Crore

a very nice way. We will see a profit driven growth in the year 2010. Also, the publishing houses in the country will start looking at each title’s profit and loss statements individually.” Media players across categories and segments are convinced that the days of print having a 20-25 yera-onyear growth and being the lead player in the media are bygone. The industry has to face up with the new reality of a single digit growth in coming times and 2010 will take the industry face-to-face with the fact that internet as the new age medium may eat into the print share. Sunil Mutreja, President –

Marketing, Amar Ujala says, “We expect a growth rate of 10 to 12 per cent in 2010. The reason for these expectations is that ad revenue coming from government advertising is slowly moving to internet. The volumes are also going down.” Sanjeev Kotnala, VP – Marcomm, Dainik Bhaskar feels that growth for the medium would come from innovations. On the the outlook for 2010, he says, “Innovation, innovation and more of it. Focussed tactics to shift advertiser interests more towards the Tier-II & III markets will continue in 2009.” Sharing similar thoughts is


Jwalant Swaroop, Director, Ad Sales, Lokmat Group. “Ability to innovate and create solutions, which helps brand managers to build a stronger bond with their customers will actually define the opportunities in the market. I am sure the same will be the driving force for growth of ad-revenues in the next 12 months too.” Among magazine players Anant Nath, Director, Delhi Press feels that the next 12 months would spell good times for the print medium and more so for the magazines as there is a widespread consciousness among the advertisers that magazines deliver. Nath emphasises, “We at Delhi Press are looking forward to a 25 per cent year-on-year growth. Also, for the magazines, 2010 should be a better year since the marketers have realised the fact that magazines offer a better delivery at a lower cost.” Another player who looks at the year 2010 with a lot of anticipation in this segment is Oona Dhabhar, Director – Marketing, Conde Nast India. Dhabhar says, “Things have already started looking up at the beginning of the year, advertisers are beginning to see business growth consistently over the last few months and this optimism and growth will definitely help the media industry as a whole. In fact we feel extremely

positive about 2010 and will be launching our 3rd brand Conde Nast Traveller in October.” The print industry also feels that learnings and lessons from the tumultuous 2009 will help the players consolidate themselves in coming times. As Benoy Roychoudhary, Director, HT Media says, “The worst is behind us and efficiencies gained during the downturn will only help us leap much higher in the good times. The slow-

9% is the rate at which print media in the country will grow helped by corrections and consolidaton. down on ad-revenues has led the print medium to focus on the cost side of the business as well as towards enhancing revenues from circulation. There is a significant focus on improving business efficiencies across the value chain and rationalization of expansion plans.”

Print players claim that advertisers will see more relevance in the print medium once the tight control over marketing spends eases. Roychowdhury says, “Increased offering to the advertisers with innovative new products and 360 degree brand and media solutions, thereby increasing the value of the medium beyond just print ads, will be a trend that will be seen emerging in the coming times.” Many a players feel that sectors like realty and banking and financial services will make a comeback this year while auto and telecom would continue to be strong spenders. Roychowdhury adds, “In urban markets the realty and services sectors are also opening up. As market sentiments continue to improve, other sectors like travel and tourism, banking and finance will provide opportunities for growth in the next year.” With the signs going right and print players working on innovations and offering holistic solutions to advertisers, 2010 bodes well for the medium to rise from the doldrums and walk into the new normal. The year promises to bring in new-normal growth rates and novel ways and hopes to explore new advertiser pockets along with rekindling the old ones. ■ —deepti@pitchonnet.com


Pitch-Madison Media

Advertising

OUTLOOK 2010

TELEVISION

The SHOW is on The resilient medium will continue to strenghthen its share in the advertising pie with better gowth in 2010. By SHILPI GANGULY

C

onsidering the reach and penetration of television in India, and the potential it has to grow further, it is not a medium that will perform mutedly for long. Last year can safely be called a year of exception where all media platforms took a hit, TV the least of all though. In fact, it even posted a growth of two per cent. But post the downturn, television’s ad revenue is slated to grow by 15 per cent as per the Pitch-Madison Media Advertising Outlook 2010, to touch a total of Rs 9,766 crore in 2010. With print having taken a severe hit, the Ad Outlook projects TV to remain the highest grosser of revenues in 2010 too. It is expected to lord over 46.2 per cent of the total ad pie this year, a further rise from 45.5 per cent in 2009. The projected revenue of Rs 9,766 crore is not only a rise from last year’s revenue of Rs 8,492 crore, it is also substantially more than the pre-slowdown revenue of Rs 8,319 crore in 2008, unlike that of mediums like print, outdoor and cinema which are not projected to reach the 2008 levels. The industry outlook also speaks a similar story. With the GDP expected to grow at a 8 per cent, the advertis-

80 I Pitch I January 2010

After the BREAK 2009 2010 *

*

Earning 8,492 9,766 Growth 2%

15%

* Rs Crore

ing industry is also expected to shine as much of advertising in India follows the GDP route. “The good news is that while the recent global economic slowdown has had its repercussions around the world, the Indian economy remained healthy, steady and the outlook remains extremely positive,” says Sonali Chatterjee, Sales Director, India and South Asia, CNN International. Majority of the industry is looking forward to a healthy double digit growth. Multi Screen Media, according to Rohit Gupta, Executive VicePresident, Advertisement Sales and

Revenue, MSM India, has had a good 2009 with high double digit growth and expects to do even better this year. Gupta says, “In ad revenue we expect to be the No 2 network this year and the No 1, the next.” One of the obvious reasons for such a performance is of course the Rs 8,200 crore Indian Premier League (IPL) deal. “The IPL locks large clients. Large properties are relatively risk free; clients see value in a good proposition,” elaborates Gupta. Though reluctant to quote specific figures, Amit Tripathi, Executive VP – Revenue, Zee News projects the


Pitch-Madison Media

Advertising

OUTLOOK 2010

TELEVISION

growth to be around 10-15 per cent, while some like K Sriram, General Manager of Vijay TV estimate it to touch 20 per cent. With marketers too relaxing their purse strings in 2010, the year looks a bright one for TV. The FMCG sector, which can literally be called the saviour of the medium with over 55 per cent advertising share, will continue to spend at a similar, if not a faster rate in the year ahead. Uday Shankar, CEO, Star India, however sounds a note of caution by predicting single digit growth for advertising revenues. “The GDP may grow at a healthy rate, but the consumer food price inflation is more alarming than what even the most serious analysts have projected. Semi-urban and rural markets heldup well during the slowdown, but now inflation is catching up with those as well,” warns Shankar. What are the avenues for revenue growth? Several, according to the players. Gupta expects ad rates to go up 15-20 per cent this year. “With market opening up and new players coming in, there will be great opportunity in sectors like IPO, government spends, telecom and education,” says Tripathi of Zee News. “Pure FCT deals are part of the past; brands look at resonating with channels with similar ideology and look, which in turn puts the responsibility on us to ideate and deliver; it also helps us form an exclusive set of clientele who would travel with us a long way ahead,” explains K Sriram, General Manager, Vijay TV. Rohit Sarma, Executive Director Network Ad Sales, Turner International, too sticks to the basics:

82 I Pitch I January 2010

15% growth is expected to come for Television in 2010, propelled by FMCG and auto. “The biggest opportunity for 2010 will be, as in the years before too has been - client innovations. No longer ‘one size fit all’ approach attracts any client. ‘Mass customisation’ will be the underlining mantra as marketers look for more personalised ways to reach the consumers.” A look at some of the key factors that drive revenues remain the same - how seriously channels take their

content, how well they time the launch of new shows and initiatives to get the biggest impact, how competitive are the rates on offer and how well are they promoted at both the client and consumer levels. That content is king is the undisputable fact that the industry recognises. “Get your head down and make the content sticky: content drives everything, viewership and revenues,” is Sriram’s suggestion for all. “Innovation in content is key even when viewership is growing and on the top, but as such, since a few genres have been doing exceedingly well in a few individual markets, it is certainly imminent,” agrees Subramanyam of ETV. New programme launches, and big impact programmes (such as the much hyped Rahul Dulhan Le Jaayega on Imagine) are making their way back into television. This rediscovery of the risk appetite is itself a signal of a turnaround. That aside, the revival of television programming should see improved spending on the medium. Profitability and return seem to be the buzz words of the industry. “I think the industry has been sensitive about returns and hence strategies, going forward would focus mainly on profitability and return,” says Tripathi. Reflecting similar sentiments, G Krishnan, CEO, Aaj Tak, says, “I feel 2010 will be much better in terms of profitability as the revenue might increase and the cost management will be far more efficient.” To conclude, the industry hopes that the new catchphrase “All is well” proves true for them this year. ■ —shilpi@pitchonnet.com


Pitch-Madison Media

Advertising

OUTLOOK 2010

RADIO

TUNING In

Radio looks set to pick up steam again riding on diffrentiation & activations. By DEEPTI AGGARWAL

Y

ear 2010 is expected to be a fulfilling year for the radio medium in India. The growth for this will not just see sheer improvement in numbers of advertisers coming on board but also regulatory intervention. The Pitch-Madison Media Advertising Outlook 2010 projects the medium to hop back to better growth numbers. The study expects the medium to grow at the rate of 20 per cent in 2010 and reach Rs 817 crore, in the projected ad pie worth Rs 21,145 crore. Based on the projections, radio is expected to also increase its share in the ad pie, though marginally, to reach 3.9 percent from the present 3.6 percent. The radio industry is expecting the much delayed third round of radio licensing to finally come into being – adding as much as 700 more frequencies to the existing number of over 250, taking the medium beyond from being just a big city phenomenon. It hopes that issues related to music royalties will be resolved, which would aid the financial health of the radio media in the country. Moreover, if the government accepts the long standing demand of operators and advertisers for more content options, advertisers can increase their spends to match their product with variety of content. Many players in the radio segment feel that in 2009, many first time advertisers came onboard because of increased pressure on ROI. The trend would translate into better ad revenues in 2010 as the ad rates are set to

84 I Pitch I January 2010

The

REVIVAL 2009 2010 Earning 681* 817* Growth 13% 20% * Rs Crore

20% is the projected growth rate for radio in 2010, thanks to many first time advertisers coming onboard.

improve in coming times. Radio Mirchi’s CEO, Prashant Panday puts things in perspective. “All of media has seen price erosion in 2009. Good news is that volumes on radio have surged. Why would volumes surge if advertisers did not get results from radio?” he asks, adding, “So that’s really good. Going forward, these high volumes of 2009 will stay – and pricing will improve – thus improving the revenues of radio again.” Red FM’s, Head Marketing, Anuj Singh also feels that radio has helped in plugging the gap, allowing last mile customer connect to its clients in a measurable way. Singh feels that the radio players have already realised the efficacy of this and are now offering this to the clients. Singh says, “In 2010 the trend will only grow stronger with more product and service categories experimenting with this concept and in turn expanding stagnant or shrinking market places.” Mirchi’s Panday expects the industry to clock a better growth rate against the rest of the mediums. “Radio will grow faster than other media. In 2010, however, the growth differential may be smaller. Radio may grow at between 14-18 per cent. In the years to come, the growth differential will increase again as the full benefits of Phase III come into play.” Fever FM’s Business Head, S Keerthivasan feels that radio will clock a growth rate of 10 to 15 per cent in 2010. He also expects the medium to expand its share in the overall advertis-


ing pie to four per cent riding on a better recovery from slowdown. Apart from the fact that new advertiser categories are expected to continue their increased spendings on the medium, most of the radio operators are pinning their hopes on the phase III of licensing. As Big FM’s Tarun Katial shares, “The Phase III of radio licensing, expected to happen in early 2010, will allow broadcasters to expand their footprint and offer advertisers even greater reach across the country. The industry will further reach to over 200 cities in the next phase.” Also, it is expected that issues related to music royalty will be resolved; and news and currents affairs based programmes will be allowed to air, giving radio an opportunity to diversify into niche content – making the medium extremely attractive for newer advertisers who wish to target spcific

Integrated solution is bound to get even bigger and thus bring more ad revenues for the radio medium on the whole. audience class. Harrish M Bhatia, COO, My FM is positive that with the excellent performance of radio in the past year, more and more advertisers will return to the medium and make optimum use of its advantages. “As radio continues to expand its horizons, there is definitely much to look forward to in 2010,” he says. Singh of Red FM feels that as radio listernership is showing an upward movement, the marketers are set to catch them up with an increased ad budget. Singh opines, “Favourable demo-

graphics across markets and establishment of robust audience measurement tools would further catalyse growth in radio ad spends.” The star spenders in 2010, on radio are expected to be auto, telecom, financial service brands and service brands. Radio players are also confident that in coming times integrated solution is only bound to get even bigger and thus more ad revenues for the radio medium on the whole. As Big’s Katial shares, “The way forward is to offer holistic solutions combining on-air, on-ground, outdoor and digital to make it a one stop shop for marketing requirements.” Katial of Big FM sums up the mood of the industry saying, “While 2009 heralded a change in mindset forever, the year 2010 promises to fortify the industry with the needed resources and ability to meet and manage this new mindset.” ■ —deepti@pitchonnet.com


Pitch-Madison Media

Advertising

OUTLOOK 2010

OUTDOOR

Revival in the OFFING The year ahead holds promise for the industry to regain double digit growth. By SHILPI GANGULY

A

fter registering a 20 per cent de-growth in 2009, the outlook for the outdoor industry looks relatively optimistic. According to the Pitch-Madison Media Ad Outlook 2010, outdoor will grow by 15 per cent, thereby clocking around Rs 1,305 crore this year. But in terms of actual contribution to the national ad revenue, the projected growth is 6.2 per cent as compared to last year’s rate of 6.1 per cent. The 15 per cent growth however, is on a reduced base of Rs 1,135 crore. In absolute numbers therefore, the projected growth does not even come up to the 2008 levels, when it earned Rs 1,419 crore in advertising. But keeping in mind the severe hit it took in the last quarter of 2008 and the first half of 2009, the picture looks cheerful. “I believe 2010 – 2011 will be the year of outdoor. The harsh lessons learnt in the past two years will stand the industry in good stead, as it will be forced to review its official tenders and balance its sorry ambitions. It will be a time to recoup losses, but significantly better than the previous year,” says Noomi Mehta, Managing Director, Selvel Vantage Group. Mehta predicts that outdoor advertising will grow between Rs 200 to 300 crore in the next 12 months. The lessons for the outdoor industry, as Mehta mentions, have indeed been hard. With Mumbai, the financial capital of India and a key location for out-

86 I Pitch I January 2010

A GOOD scorecard 2009

2010

Earning 1,135 *

1,305

*

Growth -20% 15% * Rs Crore

15% is the growth rate that the Outdoor industry is set to register as marketers display better sentiment.

door advertising, being severely hit post October 2008, the industry saw a steep fall from the red-hot growth of 28 per cent and 11 per cent in 2007 and 2008 respectively. The industry perspective for 2010 is much more optimistic though. Indrajit Sen, President – Projects, Laqshay Media, affirms, “Industry turnover can be safely expected to hit about Rs 1,700 – 1,800 crore again, that is, to 2007–08 pre-downturn levels – with sustained high occupancy levels and rising selling rates.” Campaigns, which had become shorter in the last twelve months, are expected to be long term in nature. For instance, some companies such as Tata Tea, rely heavily on outdoor to take their message to the masses. Outdoor stands next only to television in Tata Tea’s media mix for its Jaago Re campaign. The digital OOH players like OOH Media and LiveMedia too are hopeful that this year will be good for them. “We expect to double our ad revenues in the next 12 months. Our medium is designed to be more focused in terms of reaching out to key audiences and hence the wastage for an advertiser is far less compared to any other medium,” iterates Ishaan Raina, Chief Executive Officer, OOH Media. Rajan Mehta, Founder and CEO, LiveMedia, too expects outdoor, and especially digital OOH to climb a few


Pitch-Madison Media

Advertising

OUTLOOK 2010

OUTDOOR

steps up the ladder of priority for marketers in 2010. “The industry is coming out of the gloom. I believe spends on outdoor will increase because people are in a growth mood,” he adds. There are several avenues which could drive the growth for outdoor advertising as the macroeconomic and business sentiments improve. As Sunder Hemarajani, Managing Director, Times OOH, says, “Advertising in India is known to follow the GDP growth rate. Hence ad spend is expected to go up this year.” Secondly, a lot of advertising will be activity led – such as those leading up to Commonwealth Games in Delhi. The IPL too is expected to provide a boost to outdoor advertising, among others. Probably the most important feature that will contribute the most to the sustained success of this industry is the Indian Outdoor Survey (IOS). IOS, the audience measurement system for outdoor media in India, has been launched by Media Research User's Council (MRUC), a non-profit body that conducts print readership research in India. It comes as a planning software that provides details on 4,500 outdoor sites in 1,000 road stretches in Mumbai based on its research. “In 2010, MRUC needs to publish IOS final for Mumbai, Pune and at least three other cities and initiate field work in three more,” says Indrajit Sen, President – Projects, Laqshya Media. Another important development that will significantly affect the outdoor scenario is new concessionaires for Mumbai and Delhi airports, which are expected to radically change standards of airport advertising in India and raise the bar to global standards.

88 I Pitch I January 2010

The AAI (Airports Authority of India) is expected to announce new tenders at Kolkata and Chennai airports. “Altogether, the airport advertising scene is expected to radically change, starting 2010,” expects Sen. Laqshya Media holds the advertising rights on media and marketing properties at the GMR Hyderabad International Airport and is realigning the media properties there to ensure a higher audience engagement for the

Opportunities and avenues for driving up ad revenues clearly lies in “the ability to customise and clustermise (i.e. clusters being used conceptually) a brand’s messaging. brands advertised. The realignment of the media unit is an effort to draw the attention of the right people at the right time. The opportunities and avenues for driving up ad revenues in 2010 clearly lies in “the ability to customise and clustermise (using specific clusters to address audiences in a relevant and conceptual manner) a brand’s messaging,” opines Raina. “Many clients have used us in this manner and have seen results. We are creating more and more such opportunities and have seen renewed interest from clients for this approach,” he adds. Also, crucial to the success of outdoor advertising is that it adds many more clients and categories (e.g.

healthcare) to the basket, feels Raina. Presently OOH Media has over 300 clients across categories, that is, automobiles, finance, telecom, retail (luxury, apparels etc), media and entertainment, FMCG, consumer durables, travel and tourism, education etc. “The industry is still emerging and there is immense scope for new clients, categories and growth. FMCG was a late starter but is now increasing rapidly; healthcare has also started advertising with us,” explains Raina. Finally, experts surmise that 2010 is very likely to see a perceptible shift to displays in smaller and upcountry markets as opposed to a total focus on the top 20 markets only. Currently almost 90 per cent of advertising comes from the top 20 towns. These markets were being used earlier too – but the difference this time will apparently be both in volumes and the quality of displays and overall service expectations from clients. One of the concerns of 2009 was the very low occupancy levels, which saw desperate measures being taken by individual media owners to shore up occupancy – mostly through very high discounts and price led responses. This resulted in huge value loss for the industry and created large expectations of continued extremely low selling rates from customers. “This is one lesson that the industry should have learnt well and that should lead to some consolidation in 2010 that sees at least pooling of resources by like-minded companies to present a much stronger capability to the market and restore industry valuation to 2008 levels or higher,” is Sen’s hope for 2010. ■ —shilpi@pitchonnet.com


Pitch-Madison Media

Advertising

OUTLOOK 2010

INTERNET

On HYPER Line Internet is projected to be the fastest growing medium for the third consecutive year. By ASHISH JHA

T

he Pitch-Madison Advertising Outlook 2010 presents an encouraging sight for internet. Online advertising will lead the path of recovery for media this year. It projects internet to be the fastest growing medium for the third consecutive year. With a projected growth of 50 per cent, internet is expected to fetch a staggering Rs 680 crore, up from Rs 453 crore in 2009 and also increase its share in the ad pie to 3.2 per cent, an increase of 0.8 percentage points in the projected ad pie worth Rs 21,145 crore. The mood is equally buoyant amongst internet players. “The advertisers are engaging more with internet, in view of the positive result they received from their experiment on the medium, last year,” says Manish Vij, Co-founder, Quasar Media. He also expects internet advertising to grow at a healthy rate of 35 per cent. That is however, 15 percentage points lesser than our projections. Parminder Singh, Business Head, Google India too hopes 2010 to be a thriving year for the medium. “Internet advertising is expected to brew a storm by capitalising on the positive market sentiments about the medium,” he says. Advertising online is expected to go beyond traditional routes like banner ads and site-captures. Online videos

90 I Pitch I January 2010

BLAZING through 2009 2010 Earning 453 * 680* Growth 25% 50% * Rs Crore

50% is the rate at which internet is expected to grow. Much of the growth is expected to come from online videos.

are the norm of the day. Youtube has already signed up with the IPL to show Season III matches live on the internet, creating an added source of revenue. With emerging technologies facilitating mobile users to explore internet on their handsets, observers feel that the year will also witness a large number of rural users engaging themselves with internet. The catalysts for this growth certainly are the impending licensing of 3G and WiMAX, which can open up the market for online videos on mobiles. “Moblile internet is going to be the preferred way for the users considering the socio-economic structure of India. The rural market is expected to catch up with the mobile revolution,” says Singh. But marketers and the internet industry need to analyze the behaviour pattern of users before exercising any campaign through the medium, he adds. However, Sanjeev Bikhchandani, CEO, Naukri.com, is sceptical about internet making inroads into hinterlands. “Don’t expect a revolutionary change in one year. If smart phones get cheaper and GPS is on, then the potential is considerable,” he says. Studies show that online advertising is proving to be the most cost-effective way to reach the younger and more affluent population. As per a report commissioned by online advertising network, Tyroo, social networking sites account for 44 per cent of India’s online traffic with Orkut and Facebook being the leaders in the category. Thus, the dynamic platform will see a paradigm shift in advertising in 2010 and advertisers are expected to utilise the power of browsing to connect with an evolved audience. ■ —ashish@pitchonnet.com


Pitch Madison Media Advertising Outlook 2010  

The media advertising outlook and review for India for the year 2010

Advertisement
Read more
Read more
Similar to
Popular now
Just for you