Ad Club Bombay's Media Review attempts future mapping

The Ad Club of Bombay hosted the fifth edition of the Media Review on 17 July, 2009. Various media agency heads discussed the year that had gone by and the trends for the future. Ernst & Young’s Farokh Balsara kick-started the review with an overall media report. Campaign India summarises the important projections made.

Farokh Balsara: Media report (July 2008-June 2009)
According to Balsara, there has been a minimal impact of the slowdown on the media and entertainment industry.
There has been an increase in social sector outlays in the union budget. Broadcasters have acquired channels in the regional market.
Balsara said that there has been an increase in the use of radio, outdoor and BTL by advertisers to reach small town India. “Newspapers continue to occupy a lion’s share of sluggishly grown market and newspapers’ prices are stabilising,” he said.
He felt that there is a growing threat from radio and digital media. Time spent on online and radio has gone up, while on print it has gone down.
Changing consumer preferences have led to the need for innovative content. There has been an emergence of reality shows and entry of international formats. English business news genre has got more competitive, said Balsara.

“Pay TV subscription revenues are more than double the ad revenues. However, only Rs 3500 crore goes to broadcasters. There is an increasing dependency by broadcasters on subscription revenues. An increase in subscription of Rs 10 per month will translate into additional subscription revenues of Rs 1000 crore,” he said.

There has been an increase in the number of content sharing alliances like CNBC and Mint, ET Now and Reuters. Balsara said that India is becoming a popular destination for media services outsourcing. Global studios are outsourcing significant animation activities to India.

He said that telecom companies are becoming media companies with about Rs 3000 crore revenue from ringtones and there is also the impending launch of 3G. With a reach of 385 million, dominated by small town India, mobile marketing is increasingly being used to generate leads. Share of online in total media spends has increased from 0.8% to 2.8 % from 2005 to 2008.

He said that IPL is the 5th most valuable sports brand in the world with 11 million viewers and Rs 400 crore ad revenues. IPL is being valued at Rs 1000 crore. Other global sports leagues are also targeting Indian audiences like NBA, Formula one, World series of boxing, Man U.

R Gowthaman, leader, Mindshare South Asia-Emerging Media
According to Gowthaman, digital is the fastest growing medium. Multiple network platforms are carrying similar services. There is a continuing competition between different technologies which is changing the fortunes of approaches (example Orkut, Facebook and MySpace).  Consumer Durables like phone, TV and PCs are coming together. Gowthaman said, “Appliances won’t converge but technology will.”
The challenge facing the media agencies, he said, is to use response data to develop direct cost/value analysis, ROI learning and response and sales optimisation. Actively invest and promote research, he said.

Gowthaman used an interesting analogy and said that if one were to take print media planning as an example of boating in a lake, TV media planning is like boating in a river and digital media planning is like whitewater rafting. “If convergence is the storm, “message” is the only SOS the sailor has. A channel neutral idea is the holy grail,” he said.

Pratap Bose, CEO, Mudra Max-Outdoor and Sponsorships
According to Bose, OOH medium is overpriced and specialists treat the medium as a commodity. Clients are being bullied into buying the medium (often for short term and personal gains).
“India is not an easy market, yet opportunity exists and it is profitable. The sectors which will go up in usage of OOH include Telecom, DTH, Automobile, Mobile, Hospitality and Healthcare. The sectors which will go down include Financial services, media and entertainment, FMCG, Airlines," added Bose.

His advice for the medium is to “create value and propagate creativity.” Bose was of the view that the Indian Outdoor Survey launched by MRUC is not going to help much as it is only in two cities in India. He said that outdoor advertising will go digital.
On sponsorships, he said that event sponsorships have grown faster than ad and sales promotion. Expenditure on event sponsorship in India in 2009 is Rs 1600 crore. “Sponsorship is a powerful channel of communication, it is a link between ATL and BTL,” he said.

The biggest problem, according to Bose, was ROI as there is no industry standard. Sponsorship ROI needs to be measured against business goals to establish its value. Sponsorship ROI measurement consists of three elements-media exposure, awareness and purchase and commitment.
He also mentioned that ROO (Return on Objective) is equally important. “Sponsorships work only when they are longstanding like Standard Chartered Marathons,” he said. 
He also said that unconventional sponsorships can lead to unexpected results. For example, Red Bull has extreme stunts, high visibility stunts and unconventional event sponsorships which are successful.

Jasmin Sohrabji, managing director, OMD India- Print
Sohrabji mentioned that content features in newspapers are more gender neutral now. A lot of revamping in print has allowed different kind of users. Contextual advertising is the biggest advantage, she said. 
She also mentioned that frequency is not a game one can afford in print: engagement is the order of the day.
According to her, Newspapers are News Providers now (an extension of content to form) and they are engaging age group 15-19 by going beyond print. Print medium has a clear focus on traditional competition but fairly dismissive of potential future erosion. 
Magazines have taken a hike because of less elasticity of demand.
Sohrabji feels that space sellers in this medium have to become space marketers.

Nandini Dias, COO, Lodestar Universal: TV and Radio
Presenting data from the year gone by, Dias said that 83 channels were launched last year and said that the reach of all genres has increased.
“With more launches in the next five years, CPRP equation will not remain steady. Ad revenue of listed networks is showing growth. In a recession, the lowest CPT medium thrives and TV has done pretty well for itself,” she said.
She said that the new distribution platforms are making an impact. With 12.6 million DTH homes, monetisation cannot be far behind.
“Boundaries between genres are diminishing. 50% of programming across channels is similar. Contextual advertising can be created across any genre- creating a niche for itself and clear positioning should create brand preference and differentiation,” she said.
She feels that there has been a paradigm shift to social content and voyeuristic reality. While smaller towns identify more with social content, metros identify with voyeuristic content. All advertisers may need to take a stance vis-a-vis their brands (Multinational brands are at cross-roads of global and local)
“Regional channels are creeping over national channels. Regional channels will be dominating-but they may not find it cost-effective to remain regional and clutter national channels,” she said.
She mentioned that a steady number one no longer holds true, transient number one may become the norm.  All advertisers, buyers etc could be seen sweating. Alternatives to FCT seem to be growing. Media planners need to raise the bar on creativity.

For radio, Dias said, there has been only 12% increase in 2008. 40% of mobile phones come with FM. There is consistent growth across day-parts.
Globally local advertisers dominate radio- a norm that has been broken by national advertisers in India. Radio has sold properties across cities.
The second rule that has been broken is that radio can only be supplementary to films.

Punitha Arumugam, CEO, Madison Media-Issues in the industry
Arumugam explained the seven main concerns of the industry by using the analogy of the seven deadly sins. 
According to her, media owners suffer from “Anger” because of rates. Arumugam said that clients will pay if you have power of reason and negotiation (with producers/programming). 

She said that the “Pride” of numbers exists across all-media owners, clients and agencies. “In concentrating on numbers, we overlook instinct,” she said. Agency suffers from “Greed” to retain businesses and get new business.
Media suffers from “Sloth” because of the “No” syndrome as they say no to almost everything that clients and agencies propose.
Clients are gluttonous about getting audits done. Everyone suffers from “Envy”. “Out of envy, we get into the digital space,” she said.
Clients and agencies suffer from “lust” for innovation.