With advertisers spoilt for choice, writing on the wall is clear for print

As brands realign their advertising spends, print media now has to contend with the growing clout of digital medium 

If the Idea Cellular advertisements are anything to go by, the prestigious IIMs now have competition. In early December last year, the telecom major unveiled its IIN advertising campaign. Expanded to stand for Idea Internet Network, this high-decibel campaign has been on for over three months now. The campaign targets the youth, to get them to use the internet as a learning tool and, in the process, become smarter individuals. 

The Idea ad series has been broadcast primarily on television and digital, and not without reason. Idea Cellular’s chief marketing officer, Sashi Shankar, says this is not a theme that can be narrated on print. “That is exactly why we took the television route,” he adds. In fact, for his company, print accounts for just about 10% of the total advertising and promotion budget of ₹487 crore.

While Shankar declines to share specific details on the budget break-up across media, the role and purpose of each is extremely clear. “We use print when we have a product to sell (in telecom jargon, this could be a tariff plan or even just a dongle) or if there is a specific promotion that is underway. That approach has not really changed for us over the last few years,” Shankar explains.

Brands have, for a while now, been realigning their advertising spend across media. The advent of satellite television in India in the early 1990s gave advertisers an opportunity to look outside print, a medium into which they had historically put in their money. Today, with over 800 television channels coupled with the digital medium making some serious moves, the advertiser is spoilt for choice. That said, there is a huge challenge when it comes to determining who is reading what or who is watching what. Print, the oldest medium, is now looking to be a lot more relevant and innovative in a changing set of dynamics.

The numbers tell a story, though not a complete one. According to a GroupM study, television advertising revenue has moved sharply from ₹11,853 crore in 2010 to ₹19,350 crore in 2014. By contrast, print has moved slowly from ₹13,199 crore to only ₹16,108 crore during the same period. Digital, although on a smaller base, has grown almost three times during the same period.

The point to be noted here is that India remains one of the few markets where print has grown, while in more developed markets like the UK, digital advertising overtook television five years ago and print even before that. These developed markets, though, have used media in only one language (English), whereas in India, the regional media remains not just vibrant but in many cases, it is a feisty competitor to the English media. 

Vernacular victory

Amit Jaiswal is nonchalant when asked about the print slowdown. “It’s surely not the case with our group,” says Jaiswal, company secretary of the ₹1,765 crore Jagran Prakashan, the publisher of Dainik Jagran, a Hindi newspaper with 36 editions. The company’s consolidated advertising revenue grew by 12% from FY13 to FY14. “Dainik Jagran grew by 13% and that will be at least 10% today on a larger base,” he says.

In comparison, Mid-Day, an English newspaper owned by the group, witnessed a growth rate of just 2.2%. Of the ₹1,200 crore of advertising revenue that his group clocks, as much as ₹1,000 crore comes from Dainik Jagran alone, with Mid-Day and Nai Dunia bringing in about ₹100 crore each.

Jaiswal argues that the pie chart for a Hindi publication like Dainik Jagran is different. “Only 5-7% of our revenue comes from classified advertisements (including rentals, job vacancies and matrimonials), while display (brand-related advertisements) brings in a much larger 75%,” he says.

This is a far cry from the situation for The Times of India, where classifieds bring in as much as 40% revenue, with display accounting for the balance. This is not surprising, since a player like Dainik Jagran has as many as 16 editions of its 36 coming from tier 2 and 3 cities. “These markets are not right for classifieds anyway and that reduces our dependence on this category,” he adds.

The extent of dependence on classifieds varies across publications. For a smaller newspaper like The Indian Express, classifieds could bring in as much as 70% revenue with display contributing a much smaller proportion. The bigger issue is that of classifieds moving online, which is said to have affected many a newspaper. Nandini Dias, CEO, Lodestar UM, a part of IPG Mediabrands, thinks the number of classified pages in a newspaper has not yet reduced but has, in fact, increased on the back of a growing economy. “The change is that the size of the advertisements here is smaller. Classified advertisements in print today give only the headlines and direct the readers to web pages or websites for details,” she says.

If classifieds do not matter very much to those at Jagran Prakashan, it is quite a different story down south. For a publication like the Daily Thanthi, the largest Tamil newspaper, the classifieds section brings in a handy 20% of the total advertising revenue. “It is imperative for us to bring in new advertisers. The problem is that a brand manager likes to say that he has his campaign running on television,” says Narendra Kumar Alambara, chief operating officer, Thanthi Group.

This is a bias that print will have to fight for many years, and much of this is compounded by the fact that television has a reach that remains unmatched. As a consequence, its cost per thousand (CPT) or how much it costs to reach out to a thousand people is much lower than that of print.

CPT is the most well-established parameter in the industry when it comes to measuring the return on investment (RoI) for a medium and that includes digital as well. Dias thinks a key concern in digital is that the medium does not have a single-source third-party aggregator.

“For instance, Comscore (a well-known name in digital media analytics) does not include Google and Facebook viewership patterns. It then becomes difficult to determine the number of unique visitors on digital, which is quite a challenge,” she explains. According to her, digital is more about passion planning than demographic planning. “Hence, exact RoI comparison between offline and online is not possible as of today.”

The broadcaster’s view

Every medium is aware of the huge advertising potential that exists for it. Rohit Gupta, president (network sales, licensing & telephony) of MSM (formerly Sony Entertainment Television), says television advertising will grow significantly for at least the next five to seven years. He points to the fact that at least 12-15 million new homes are added to the universe of cable and satellite (C&S) each year. “If India has 160 million C&S homes, there are 80 million more that are not. That is the big opportunity for us,” he argues. 

For any large broadcaster, according to Gupta, the FMCG category brings in no less than 35% of the advertising revenue. “FMCG brands are always on television with a relatively small presence in print,” he points out. In the event of a big-ticket event like the cricket World Cup, there is a surge in advertising spend on television, driven significantly by FMCG brands. 

If large telecom advertisers like Idea Cellular argue that television works better than print when it comes to narrating the benefits of a product, the case of FMCG is interesting. In fact, many companies here think print works well for precisely the same reason. Dias insists that FMCG brands have started using print in a big way and that includes brands her company handles. “In the case of Sofit, print was used to get people familiar with the benefits of soya milk, which was really about growing the category. In the case of Santoor, we took forward the positioning seen in the TV commercial, that the brand keeps your skin looking younger,” she points out.

On that note, Jaiswal says that in the last two to three years, his group is witnessing some serious spending by FMCG brands. “It was less than 5% of our overall revenue three years ago. Today, it brings in as much as 10%,” he explains. The biggest chunk comes from the government advertisements, which bring in 15-16%, followed by education and automobiles, which account for 10-12% each. 

Without a doubt, print remains the most expensive medium, though its players think that the medium commands its price. Ravi Dhariwal, CEO (publishing), Bennett Coleman and Company, the flagship of the Times Group, says, “It has been proven for years that it is the most effective advertising medium. It is expensive because it is effective.” 

In many ways, while print has suffered from the loss of advertising from sectors like telecom, it has, so far, managed to get by. This is primarily because of the big money spent by e-commerce firms, real-estate companies announcing new projects or just those who are convinced print works well if it is used well. 

Vijay Narayanan, vice-president (marketing), Havells India, has not spent a rupee during the just-concluded ICC World Cup, cricket’s marquee event. This is hard to understand because Havells has an advertising and sales promotion budget of ₹220 crore, and, in 2007, it put serious money into the Twenty20 World Cup. “This tournament is risky for an advertiser, given that there is so much riding on India’s performance. That does not make us comfortable,” he reasons. Last year, Havells added print to its media mix and discovered it worked very well during the festive season. For the 2015 fiscal, print accounted for as much as 25% of the total budget. “This year, we will increase our budget by 10% and print will be in the same proportion,” adds Narayanan. 

To his mind, the benefits range from the medium’s immediacy and the ability to generate day-to-day sales. “Television helps in building an image for the brand. We have not really ventured into digital in a big way so far,” he says. According to him, print makes sense when a brand wants to be in a certain market. “Yes, it is a costly medium but it works very well during the festive season. Reaching out to our dealers is possible only through print,” maintains Narayanan. 

The new buzz

If print has lost some ground to television, the real change has been in the digital story. Nitin Bawankule grins when he speaks of how even political parties took to advertising on the digital medium during the 2014 Lok Sabha elections. “There was almost nothing spent on digital in the 2009 elections,” says the director for e-commerce and online classifieds, Google India. 

Cut back to 2011, when large advertisers in sectors such as FMCG, auto, telecom and banking hardly had a presence on digital. “They were still testing the waters. Today, it is hard to find a category of advertisers that is not on digital,” points out Bawankule. According to him, the feedback from advertisements on the digital medium has worked in its favour. This is best exemplified in the case of video advertising on the internet (most often on YouTube), where the user has the option of skipping the advertisement. “There is no such option on television. On digital, if an advertiser notices that his target audience is not watching the advertisement, he has a chance to correct the situation,” adds Bawankule.

While there is a lot of enthusiasm on how digital will shape up, he is quick to point out that it is still an English-dominated medium. “Local content makes up for less than 5%, and that will take a long time to change. The big plus for digital is that the user base on the internet has increased three-fold in three and a half years, which remains the primary driver,” says Bawankule. That will only continue to grow as people spend more time online. “As consumer time gets fragmented across multiple media choices, advertisers are forced to make corrections to their spending patterns. In fact, print still gets its fair share of advertising unlike digital, which is under-leveraged if one goes by time spent,” maintains CVL Srinivas, CEO, GroupM (South Asia).

The increasing base of internet users has resulted in a slew of new businesses that use online in a big way. This includes the likes of e-commerce biggies such as Flipkart, Snapdeal and OLX, an online classifieds marketplace for used goods. Amarjit Singh Batra, CEO, OLX India, says there are primarily three segments that are visible on digital today. “One involves lead generation businesses such as insurance, while the second category is about increasing reach, which is where the FMCG players come in. Finally, there are digital sites like us, for whom this medium is our bread and butter,” he explains. According to him, online remains the best way of finding things. “People will buy a lot of things offline but will do a lot of research online. We think mobile digital marketing will be a very big story in the time to come,” says Batra. 

Not surprisingly, those who depend on the internet to further their business spend most of their money on this medium as well. To them, using print is part of a well-thought-out strategy. Sandeep Komaravelly, senior vice-president (marketing), Snapdeal, says his company only uses print when there is a big announcement that is either time-sensitive or if it is just for a big launch or an event. “Print is a good idea when we want to advertise in a specific geography. For us, digital (at a little less than 50%) remains the biggest medium with television and print coming after that,” he adds.

Shoumyan Biswas, senior director (marketing), Flipkart, maintains that print is hard to ignore, thanks to its sheer impact, which is not always possible on television. But much of that is heavily dependent on what needs to be communicated and when. “Our overall advertising spend is still in favour of digital and social media. As we get larger, we need to segregate even further and look at specific options like regional channels or general entertainment channels,” he says.

This approach to print is something that those in the financial services businesses, too, agree with. According to Sanjay Tripathy, senior executive vice-president (marketing), HDFC Life, print provides a chance to reach out to a segment that loyally consumes it, and it works well for a launch or for advertisements that are a little detailed. “However, the importance of this medium is reducing because of clutter, apart from the emergence of other cost-effective media such as digital/social media. For us, print is not a regular part of our media mix and we consider it depending on the campaign objectives,” says Tripathy.

His rival, ICICI Prudential Life Insurance, too, is an advocate for the internet and social media. “The new digital media is useful in micro-targeting and creating mini-campaigns. For instance, video advertising can help in understanding products that seem complex and speak of its benefits in an interesting manner,” says executive director, Puneet Nanda.

As the battle across media intensifies, they are each doing innovative things to remain relevant. Samujjwal Ghosh, executive vice-president (marketing), Lodha Group, says the advertising landscape continues to evolve as advertisers have more money to spend, though the best way to spend it will remain a challenge. 

“Traditional media in India continues to lead the way. That said, the oversupply of inventory online gives advertisers more options on how to spend their money,” he thinks. By the looks of it, in this race, the advertiser is now king, chased by the bouquet of media to choose from.