http://www.dnaindia.com/money/report_the-fine-print_1328884
The fine print! Anoop Chugh / DNA Wednesday, December 30, 2009 2:19 IST The country's regionally-oriented newspaper industry should have opportunities for growth in the coming year as literacy and incomes rise, but the industry faces below-market-average growth nonetheless as fewer people are reading and advertisers are spending less. Even with the rapid rise of digital media, disintermediation is unlikely to be the only cause of any downturn for India's print industry, the second largest in the world. While large newspaper publications like DNA have developed mobile and Internet versions, there has not been as dramatic a shift to reading online in India as there has been in other countries. Circulation has dropped for business and English-language publications and magazines as TV business news channels continue to gain audience share to satisfy advertisers' need to reach similar audiences. Magna Global Advertising Forecast predicts the print media market as a whole to rise over the next several years - experts expect growth to average 14% through 2015. While foreign financial news publications are allowed to produce facsimile copies, they are not permitted to include local content or ads. New international titles for niche segments and online editions of publications such as GQ, Vogue and Rolling Stone are constantly introduced into the market. City-specific magazines are also making a big push, offered to consumers for free to create audience bases. In aggregate, expect magazines to grow by 11% each year over the next five years. DNA speaks to media experts, who says it's not yet dooms day for the print media, at least in India. Controlling costs is the biggest challenge K Satyanarayana We are sure that everyone, not only in India, but elsewhere in the world is glad that 2009 is coming to an end. It has been a very rough year for virtually all industries, including advertising. Most of our clients entered the year with reduced budgets and it is only now that we are seeing some normalcy return. The good news is that the recession of 2008-2009 is receding. The upturn in the stock markets is for real and it is not likely that we will crash through the many resistance levels to hit the cycle low of 8,000 any time soon! There is a positive trend in 'spending' as well - the malls and multiplexes are becoming crowded places as seen before the 'recession'. As many financial experts keep saying, 'it's the psychological recovery' that has to happen for the economy to be on 'growth path.' Given what we have seen in the shops and malls, we believe it will be sooner rather than later. Undoubtedly, the recession hit the advertising industry hard. But even as we are coming out of recession, the print medium has not seen significant recovery. One of the reasons print is not registering higher growth as compared with TV is because of the costs -- it's cheaper to cover all India through TV than print. However, print can grow principally out of local/regional advertisers with specific geographies to be covered. National advertisers will continue to use print, especially, newspapers, for tactical advertising, not specifically for brand building. Print has also lost share of corporate image building. Further, rising newspaper & production cost is compelling newspapers to keep increasing ad rates, making it unaffordable for a lot of advertisers. To encourage more advertisers to prefer print, the media owners have to find ways rationalising printing costs; they also need to look at cutting premium charged for colour. I don't think it's any more relevant and logical to charge say 100% premium for colour over BW when most of the newspapers are upgrading themselves to offer all colour pages. As far as decline in readership is concerned, I see a positive side to it since it's a result of falling 'RPC (reader per copy)'. I see it as "quality readership".. regional newspapers, especially the large ones, used to have an RPC of around 20, compared to 5-8 of English newspapers, which is coming down. Further we believe that in a healthy economy more and more people are buying their own copies and pass-along readership is eroding. To sum up, we are welcoming 2010 with open arms as we believe the new year will continue to bring strong economic growth across all sectors in India. Further, we believe that the recovery will support growth in our clients' budgets which will fuel our own growth. We further believe that individual media will have different growth patterns depending on their own vitality. The writer is vice president/communication partner, RK SWAMY BBDO Media Direction Bottoms up's the proven approach Tarun Deep Kumar Just because he can't say it, it doesn't he mean he doesn't know it. This is the state of affairs when it comes to India's regional dailies and the people involved in the decision making for advertising on the same. One of the most powerful stakeholders in advertising are local dealers or traders who are not able to articulate their perspective and, hence, regional dailies are the end losers. The other powerful stakeholder is the media planner who is ridden by the convent syndrome. A city-bred planner has little or virtually no idea about the local market realities and hence the same gets reflected in his bias for national dailies. The third stakeholder is the creative agency, which by virtue of convenience does the same creative for Varanasi that he does for a Delhi. Interestingly, the degree of colloquialism is very different and does not cut much ice with the consumers there. Then there's the cause and effect of this phenomenon. Does the brand grow because the brand is getting advertised there or is advertising being done where the growth is taking place? India has roughly 50,000 dailies (source - INS), with 80 % of them being regional dailies. Though the revenue split is not in the same ratio, it should not be forgotten that regional dailies give the instant connect and amplifier effect for advertising. Advertisers should start channel support in growing markets by investing in local advertising. They could start with pilot project in few markets and there will be results for them to see. Regional advertising should start offering the integrated marketing communication approach and should start offering infrastructure and market knowledge for collectively fuelling the brand growth, which in turn leads to their own growth. Remember, bottoms up approach for advertising is the proven approach for India, which is not one country but a conglomeration of several socio-economic regions that require different treatment. The writer is, executive director, India- North, Starcom Worldwide Focus to be on brand building Manas Mishra India's print ad revenue is split 93:7 in favour of dailies (vs magazines). In the dailies-led category, a large 50% of revenues are taken away by the English Press. Historically, Mumbai and Delhi and the top metros take away a disproportionate share (25-30%) of the total ad revenue - something unique to the print medium. The ratios, however, are entirely different when it comes to readership - language readership is 90% of the total reader base in the country (15-17 crore). Consumption is top down for many product categories: Metro to smaller towns, higher income groups downwards, educated down to illiterates and so on. And all this despite the large population at the base of the pyramid in a country like India. The one silver lining in all this is the fact that the base of the pyramid is the least susceptible to the vagaries of capitalism and global economic tsunami of the type we saw in 2008-09. So, in terms of the printed medium, 90% of the readers (language readers) were far lesser impacted by the downturn than the 10% who live in the metros and read English. And, the growth story continues....this was the biggest learning for all of us in 2009. We have already seen consolidation, geographic expansion, better paper and printing quality, newer formats like weekend magazines in broadsheet, online editions, front page customisations for advertisers, TV advertising by newspaper brands and so on. So what next? Here are three things to watch out for in 2010 from the print medium: nGreater investments in advertising/ brand building by dailies/ magazines to build a brand out of their product: No one is willing to wait any longer for the product (the newspaper itself) to build into a brand (through readership of its content) over time. Building a brand identity will be key. Forays into the unknown - newer geographies/ languages by regional and national players: Like TV, we will soon see a few print groups that have a national footprint. nConsumer connect initiatives in large and small towns to build greater loyalty among readers and advertisers: This has worked for some newspaper groups and the scope of this will expand now. The writer is head, Mudra Connext Print will continue to play a key role in the marketing mix Arijit Ray The last year has been challenging for the advertising and marketing industry. The print medium has had to brace itself to some radical behavioural and lifestyle-related paradigms. Digital aggregation of content has been gaining popularity with fast-paced lifestyles. The launch of new and niche titles and genres has fragmented the space further, not helping the cause of the print industry. In a nutshell, the appetite for information of the individual is met by different easily accessible sources other than the newspaper or the magazine or the tabloid. To top it all, we are aware that some of the print friendly categories like real estate, financial services etc did pull back on spends. From the media houses standpoint, the input cost of newsprint did play spoilsport, resulting in various forms of rollbacks (number of pages, supplements etc...). Having said that, there are indications that the story next year will be a lot better. The GDP forecasts are quite positive, the stock market is demonstrating the right signs of stability, there is adequate consumption-led demand, and generally marketers are beginning to loosen up. Recruitments are on the rise, increments on key sectors are happening along with the liberal bonuses that used to be the mantra in the pre-downturn days. Along with this, the newsprint price is not such a big factor now. The editions are getting back to their original avataars and the lost supplements and making their gradual but steady comeback. Nonetheless, what will impact the future of the print sector most in the next 3-5 years is the health of a few critical sectors. Automobiles, real estate, financial services, tourism and retail to name a few. Print will continue to play a key role in the marketing mix of these categories. Anyone who is in the look out for an automobile will seek the relevant details about the features and the bells and whistles from the print ad. Similarly, for mutual funds where communication to highlight the performance / pedigree of the fund will continue to be a potent one. Potential investors will scan them if they are in that mode and current investors will feel reassured when they see their fund getting advertised. The same holds for retail and tourism. While TV has emerged as a key medium for these categories as well, to drive disposition and imagery, print continues to play a crucial role to enable information dissemination. The involvement is high along with the stakes when one buys a car, a house or a financial instrument. The Indian consumer has evolved, aspires for more... but what has not changed is his fettish for value extraction. Every decision is a considered one. The trends in the auto sector give us enough ammunition to predict substantial investments to launch a series of new models waiting in the wings, in 2010. In the real estate space, too, the momentum has picked up again. One could say the same for insurance and mutual funds. In spite of the fact that online is playing a huge role in the information search stage, in the buying process, print would continue to play a key role in driving consumption in 2010. The success of a media house will largely depend on the extent to which it can a) convince marketers on the role of the medium to effectively bring alive the brands distinctiveness and b) the flexibility it demonstrates in bringing to the party innovative and breakthrough ideas. Innovative print executions that add teeth to the brand/variants proposition will gain currency rather than conventional 100/200/300 cc formats. In the new market place, online and TV cannot be a competing media for print. The media houses will have to find proactive ways of integrating and synergising with marketers, advertising agencies and other mediums. The writer is EVP & head, Mudra Mumbai
