Mktg - The Media Epic

When Lynn de Souza, Ravi Kiran, Vikram Sakhuja, Shashi Sinha and Sam Balsara sit under the same roof, media magic is bound to happen. At the Media Review 2008 organised by the Advertising Club Bombay, the five media agency heads spoke on the topic for the evening, 'Media: Unstoppable, or Unsustainable?'.

Lynn de Souza, chairman and chief executive officer, Lintas Media Group

Lynn de Souza, chairman and CEO, Lintas Media Group was first on the dais and spoke on the developments in the television and radio space. She said that TV viewing homes increased from 93 million in 2006 to 100 million in 2007, while multi-TV homes increased by 16 per cent during the same period. 74 new TV channels found their way onto the Indian TV landscape (adding up to 447 channels currently), and there was a 30 per cent increase in advertising seconds. The highlight of the year was Rs 10 crore spent on a single day, on 5704 spots, with 1.4 lakh seconds of commercial time and over 600 GRPs – all to announce the transition of Hutch to Vodafone.
Next, de Souza highlighted the conflicts between advertisers and the IBF last year. On October 16, advertisers displayed their unity by protesting against the IBF’s 25 per cent hike in TV ad rates, forcing the IBF to backtrack. She also spoke of the draft recommendation released by TRAI a few weeks ago – Policy Guidelines for Television Audience Measurement and TRPs. “So we want the government interfering with us? Certainly not!,” stated de Souza.

Moving away from controversies, de Souza said that people are hard-pressed for time and want entertainment in everything. “Meeting these requirements was a tiger on the Indian television landscape last year – the DLF Indian Premier League,” she said. Perhaps the success of the IPL is an indication that short formats will rule television and that sheer entertainment (in this case, good cricket, celebrities, gossip and cheerleaders) works. She added, “Further, IPL was the perfect example of a global/universal show, with artistes from all over doing their bit.” The radio industry, too, is looking positive with radio adding 7.2 million listeners in 2007. With 260 FM stations across 93 towns, things are looking up. Further, de Souza said that advertising seconds have doubled while revenues have also increased.

Vikram Sakhuja, chief operating officer, GroupM South Asia

Taking over from de Souza was Vikram Sakhuja, COO, GroupM South Asia, who spoke on ambient media and sponsorship. He pointed out that ambient has a huge scope to move beyond impact and salience, and move into the area of engagement. Ambient traditionally comprises outdoor (a Rs 1,400 crore industry in 2007), retail level activities (Rs 225 crore) and activation (Rs 710 crore). In all, ambient is a Rs 2300 crore game, including static, activation and digital. Static ambient media is present mainly in the top seven metros which account for nearly 75 per cent of the overall static pie. Billboards form 35 per cent of the spends, he revealed, but there are talks of regulations affecting these (the stripping of Chennai’s hoardings is a recent example). “But the end of billboards is certainly not the end of ambient,” said Sakhuja. “Our signages are moving from ugly to sophisticated and quality focused, with uni-poles and backlit doing the rounds.” Currently, some 10-15 players rule the roost, out of which Times OOH, Jagran Engage and BIG Street are playing the aggregation game. With international players such as JCDecaux and Stroer Media ready to dive into India, things are surely looking up.

“There will be high bids for airports, railways and other premium inventory,” Sakhuja said. As far as activation is concerned, the advent of screens is a big development. Today, there are over 10,000 activation screens in India in the shopping environment, lifestyle/gaming environment, eateries and pubs. Also called last point TV, these help reach a difficult target group (TG) and are good frequency builders. However, Sakhuja advised creative heads to tailor make creatives for these which don’t extend beyond 10 seconds and provide a call to action. For ambient, Sakhuja felt that metros will remain crowded; non-metros are an opportunity. Billboards will give way to street furniture and measurement is a huge opportunity, Sakhuja opined.

Sponsorships (which traditionally means the rights a brand acquires to associate with a property) is a Rs 2700 game, divided into TV sponsorships (Rs 1900 crore) and on-ground (Rs 600 crore). Cricket is the biggest contributor (Rs 850 crore) followed by movies, music, dance, fashion and movie award shows. There are title sponsors, ground sponsors and on-air sponsors – and that’s only the tip of the iceberg. “Usually, the ratings of the previous series is the determinant of the next game,” Sakhuja stated. Other sports constitute a smaller booty of Rs 50 crore, including Formula1, tennis and football, among others.

Movie Awards (a Rs 100 crore sponsorship space) command Rs 3-4 crore for title sponsorships. Blockbuster sponsorships on television account for Rs 435 crore. Sponsoring international format shows is like a ‘Matka’ or a gamble, Sakhuja said, as it is risky business and may not pay off. Then there are the targeted sponsorships (in fashion shows or youth shows such as MTV Roadies) which are a much bigger payoff than the rest. “Sponsorships help brands leverage a passion bigger than the brand onto themselves,” Sakhuja concluded.

Shashi Sinha, chief executive officer, Lodestar Universal

Shashi Sinha, CEO, Lodestar Universal, spoke on the magic of print even as people claim that it is fading away. “Almost 49 per cent of the ad pie often goes to print,” he said. He spoke of five trends in print over the last year. First, there is an emerging audience, with growth in total readership among 12-14 year olds. “This could be because news channels are becoming more entertainment focused than news focused,” Sinha opined. Small town youth are the torch bearers of print (the Dhoni effect is applicable here, too). Second, he cited emerging markets as another point: people hail English print publications as the magnet for advertisers, but the Hindi/regional belts are showing increasing promise. “We are moving away from the domination of English,” he said. Another trend he spotted was that telecom advertisers have gone off print.

Sinha also spoke of emerging segments: niche publications are the name of the game and help deliver more segmented/targeted readers to advertisers. There were over 20 new niche publication launches in 2007, but interestingly, these did not include any sports oriented magazines/supplements. The entry of international players such as Conde Nast will lead to improved production quality and access to global content. “However, niches have low reach and high cover prices,” Sinha said, which is another debate altogether. On the fourth point – emerging digitisation – Sinha said that digital as a medium will enhance print and not replace it. Lastly, Sinha spoke of emerging revenue streams for print owners. By venturing into other arenas such as television or outdoor, things are going towards a 360 degree offering to advertisers. “But we’re not doing justification to this. In a bid to offer everything, we are spreading ourselves too thin,” Sinha concluded.

Ravi Kiran, chief executive officer, South Asia, Starcom MediaVest Group

Ravi Kiran, CEO, South Asia, Starcom MediaVest Group took over and spoke on digital as a medium for advertisers. Digital is a Rs 500 crore industry and is slated to double next year. “Unlike other media, something new in digital is happening every day, every hour,” Kiran emphasised. “We have conversations in digital, we send digital winks and hugs, for heaven’s sake!” In 2007, there were nearly 300 advertisers with 550 brands on digital. Mobile advertising, too, has multiplied last year. “Advertisers are changing their question regarding digital from Should I? to How should I?,” Kiran said, “which is a good thing.”

On the negatives of digital, Kiran frowned upon too much experimentation in the medium by clients, despite eight years having passed since the dotcom bust. “Why are we still experimenting?” he asked. “People often do digital, but don’t have a strategy.” Intrusive elements such as site captures, for instance, are big right now, which shouldn’t be the case. “Most clients don’t know what to do on digital; others expect too much just because it is measurable,” Kiran declared. “Don’t kill the medium by over-demanding,” he concluded.

Sam Balsara, chairman and managing director, Madison World

Sam Balsara, chairman and managing director, Madison World, concluded the Media Review with talks about industry issues. According to him, the biggest problem we face today is that media agencies, from being the darlings of media owners, have somehow fallen out of favour with them. “The media agency structure is here to stay and we must discuss our issues now so we can all coexist tolerably, if not happily,” he quipped. Furthermore, he also said it was time to enlarge the media agency’s role in the scheme of things for the benefit of these agencies, advertisers and media owners alike.

Balsara said, “We must question, who are the media agencies ultimately working for? Channel owners are becoming large advertisers themselves, and trust me, when they don the hat of an advertiser, they become even more demanding for lower rates.” Next, media agencies should revise their business models and not feel shy to ask for what they deserve, particularly regarding remuneration. A client credit and process rating system should do it. Digitisation of processes and finding appropriate talent were some of the other things he mentioned. He concluded his talk by addressing media owners. He said, “Your media agency acts as your collection agent, evangelises your new ventures and shows with advertisers, gives you a wide reach with advertisers and encourages these advertisers to take risks. Finally, if the media agency weren't there, you'd miss out on your favourite whipping boy or girl.”