It’s expected by the consulting firm, PricewaterhouseCoopers that the size of print media reaches Rs.19500 crore by 2010. The share of newspapers is about 87%, which is around Rs.16960 crore and will grow by CAGR 12% in the coming year. Good news!
Yet, print media companies in India coming out of the recession aren’t redefined their marketing models. Advertisement revenue is the biggest source of finance that needed to sustain the growth of both big and small players of print media. Small and Medium players gain volumes offering lowest rates. In metropolitan markets, small and medium players lost their direction of growth to the monopoly of first and second ranked publications. Higher response to advertisement is the most important factor in these markets. Competition of top ranked print media companies in these markets driven by the art of negotiating advertisement rates. To build market barriers and to garner maximum ad space, these companies one after one started offering extensive discounts. Eventually, it had led to negative competition.
Newspapers and magazines did not understand that they lose revenues in the form of discounts because of negative competition after the end of recession. Clients and their media buying agencies are treated like kings by the same note – “Customer is king”. Customer is not king in the media industry. Please accept it. It has to be changed. Media companies need to rethink this notion and execute innovative policies to augment the ad volumes without losing revenues due to unproductive negotiation.
The scenario is entirely different from the perspective of marketers. There are plenty of alternatives available for them in Delhi, Mumbai, Chennai, Bangalore and Kolkata. More than 70% ad spends come from these metropolitan cities. Auto, Banking, Financial and Insurance services, Education, Property and Retail sectors are top ad spenders from these cities. Crowded media companies, limited budget for media mix, huge ad costs made marketers to build the unique business model that is oriented to maximise their ROI. It’s done by negotiating the lowest price in order to accommodate optimum volume of advertisements in every component of media mix within their stipulated budget.
Recent recession even intensified it. Before the trend of negative competition damage the credibility of print media, companies have to act fast to build a new workable business model that suits themselves and also their marketers.
“Negotiation of Price” needs a new meaning in the present media scenario.
Segmentation of consumers
Marketers, ad agencies and media companies all like segmentation of customers. Segmentation helps marketers to launch their products in proven markets. Consumers are classified into different segments according to various parameters. Print media companies and ad agencies rely upon annual readership surveys like NRS (National Readership Survey) & IRS (Indian Readership Survey) to claim their strength in different markets. Consumers are segmented according to Age, Gender, Monthly Household Income (MHI), Education, Occupation, Social economic class (SEC), Usage of products, Time spent in reading, etc.
Younger audience/ High net worth Individuals (HNIS) who fall in SEC A+/A/B, MHI>25K are very important target groups (TG) for all marketers. The more newspaper/magazine penetrates into them, the more it is successful in getting ad volumes from the marketers.
| Top 3 English Newspapers (All India) | Average Issue Readership AIR (000’s) | Top 3 Hindi Newspapers (All India) | AIR (000’s) | Top 3 Magazines (All India) | AIR (000’s) |
| Times of India | 7142 | Dainik Jagran | 16096 | Vanitha (Malayalam) | 2900 |
| Hindustan Times | 4447 | Dainik Bhaskar | 12880 | Saras Salil (Hindi) | 2167 |
| The Hindu | 2169 | Hindustan | 9336 | India Today (English) | 1878 |
Now the vital question is what marketing strategies need to be adopted by print companies to reach these desired TGs?
English dailies have greater penetration into premium target groups rather than vernacular newspapers, without much wastage. The reach (circulation) of English dailies in the rural India is limited, while vernacular dailies have got abundant presence in rural. The demand for English dailies/ magazines has remained stagnant. While, the growth in literacy rate has direct positive impact on the circulation of vernacular publications in India – their ABC figures will grow.
Publications have to concentrate their focus to attract the younger audience with evolving lifestyles and significant purchasing power. Recession left behind profound changes in media consumption and shopping behaviour of these target groups.
Media habits and online advertising
Present scenario of consumption of information has been evolved through changing media habits of consumers. The changing media habits traced to different characteristics of on-line media and Print media. GenX increasingly using online sites like Google, Yahoo! to know latest news, gather information instantly; visiting social networking sites like Facebook, Orkut, LinkedIn, Twitter to share opinions and information on wide variety of topics of daily use. Consumers prefer print media for highly analytic and comprehensive news topics. They ready to pay premium for it. Online media is free for consumption and offers real-time information. There evolves a significant segment of consumers who’ll use 3G-enabled devises to read news, when telecom companies launch 3G services in India.
In the fast changing media environment, companies need to understand the media habits of their consumers, especially whom read their product mostly. Print readers can be bifurcated into active and passive ones. Active readers are those consumers that are targeted by 60-70% of their marketers. Younger and/or HNI audience fall into SEC A+/ A/ B and/or MHI> 25K come under this category. Passive readers are consumers that are targeted by low price product manufactures/ service providers. TGs fall into SEC C/D/E and/or MHI<25k are passive ones. Passive readers could be upgraded into active ones over a period of time. Hence, both are important from the marketing point of view.
Media habits of active and passive readers significantly influence the shopping behaviour of products in a particular period of time. Clearly, the media consumed by each reader, whether active or passive, is very different from one another. Active readers consume more online media followed by TV and Print. While passive ones rank TV, Radio and Print as their popular media.
Circulation figures of newspapers are declining in developed countries like US and UK. Internet viewership is increasing manifold. The simple reason is media habits of consumers have been changing in these markers. The rate at which online ad revenues are growing is much faster than that of print media.
According to a study conducted by ERNST&YOUNG UK, 330000 average daily circulation lost by the national dailies in the UK market every year since 2003.
GenX is primarily online media orientated. Internet generation gets information for free. Printed word supplements the further need of information as a reward.
Learning from international markets
Brazil, China, Russia are fastest growing print markets apart from India in the World. Learning different scenarios from these markets will certainly help the publishers to manipulate financial and marketing plans.
China is one of the largest markets for luxury goods and lifestyle products; hence the future of magazines looks brighter than it does for newspapers. Chinese youth are driving higher discretionary spending in entertainment-related activities. They are leading users of mobile phones for instant messaging and internet services.
In 2009, more than 120 million Chinese consumers started using mobile internet and nearly 100 million became new users. Chinese online advertising market increased 21.2% YoY to $3 billion in 2009. Decline in circulations and advertising revenues made local publishers to partner with international companies to provide digital content through internet and mobile phones. The results have been strong in lifestyle, leisure, and finance and golf publications.
In Brazil, Newspapers remain stagnant and internet growing fast. There’s been a rapid growth in the migration of readers to internet-based publications. Reduction in regulatory measures for foreign players, growing usage of PCs, demands led by emerging middle class are in favour of internet advertising.
Coming to Russia, Internet subscribers are expected to increase from 21.3 million in 2009 to 40.2 million in 2012. Due to the global economic slowdown in 2008-09, more than 200 regional mass media and six federal magazines went bankrupt. Circulation of some publications decreased, free supplements were closed. Today’s Russian internet users socialize more than many western European countries, creating new digital opportunities for domestic and foreign media.
According to a survey conducted by the consulting firm Booz & co, Internet advertising commands just 6% share of measured media spending among the top 25 US national advertisers. However, US consumers spending more time at home and online. They devote more time to online news, radio, blogs, social networking and e-commerce or TV. On-line readers are growing with the rate of 25% every year.
British & North American magazines publishers expect to generate as much as 20% of their total revenues from digital platforms within next 4-5 years.
Successful Business Model
According to PricewaterhouseCoopers, The Indian print media industry is projected to grow by 5.6% over the period of 2009-13, reaching Rs.213 billion in 2013. The relative shares of newspaper and magazine are expected to remain the same at around 87% in favour of newspaper publishing. Magazine advertising is expected to grow at a higher rate of 6.5% as compared with newspaper advertising which is expected to grow at 5.6% for the next 4 years.
Internet advertising is projected to grow by 32% over the next 4 years and reach an estimated Rs.20 billion in 2013. Still, On-line revenues are too low to offset the decline in print. Now, the key challenge to the print media companies is to redesign their revenue models with inclusion of digital platform of their publications.
Print companies have to strengthen their TGs in various segments using short term as well as long term strategies. Circulation figures need check in rural. Rapidly increasing urbanization in Metros, Tier I and II cities provides abundant opportunities for the publications to catch the younger TG.
Publications need to keep their circulation strong in key markets. Entering new markets to garner more market share is the next step to become a national player.
Inclusion of On-line media and Mobile media:
According to Tyroo, On-line advertising network, Social networking sites account for 40% of India’s online traffic. Orkut and Facebook are the most popular networking sites. (Source: comScore World Matrix). Other emerging markets are mobile advertising, Video on demand, Gaming and VFX.
“Malayala Manorama” launched digital content connected to its brand “The Week” (www.the-week.com). Advertisements displayed on its website supplement the revenues to the printed magazine.
“Dainik Jagran”, No.1 Hindi Newspaper, has tie up with Yahoo! to provide its content on the site.
Another fine example of including digital media is by Mid-day newspaper. It includes a unique code on every copy of newspaper which can be used to download a piece of content from the website. Please read a copy of Mid-day, Delhi edition dated 5th July 2010, page no.2
Media Sales:
Selling space is crucial part of the management of every publication. Companies have to recruit qualified personnel, train and develop them into talented to sell the ad space more professionally. Retention of talent and promoting the right candidates to the higher responsibility is also vital for building strong sales team(s). Strong sales teams generate optimum growth in volume as well as in revenue in long run. Many media organizations lack professional sales people with excellent team work.
Higher authority has to delegate the responsibility of selling premium inventory to the talented sales team irrespective of number of year’s experience they possess. It’s Out-of-the-Box thinking. It definitely ripe results in short course of time. The sales team has to act a consultant, rather than typical sales guys, to sell premium inventory with the advantage of data. Customer is not king in the media selling. It doesn’t means to behave rudely with the clients. Sales people have to handle objections more professionally in order to negotiate a favourable price point with the clients and ad agencies.
Excellent visual presentations backed by accurate data and proven testimonials are always helpful. Sales teams have to hone the habit of finding better solutions. It’s not important how much volume they get for the publication; it’s very important whether the client satisfied with the response of published advertisement in the publication. Satisfied consumers make the brand stronger and stronger till the date they are delighted with its services.
References*
- Christopher Vollmer, Thomas Kunstner & Gabriel Chahine - Booz & co. US (2008), Game not over: How the media and entertainment industry can survive the down turn.
- Jairay Purandare & Timmy Kandhari – PricewaterhouseCoopers (2009), Indian entertainment & media outlook 2009.
- ERNST &YOUNG LLP UK, (March 2008), Media & Entertainment by numbers.
- John Nendick - E&Y US, (April 2010), Tune into emerging entertainment markets.
