Meet Swapnil Jain. He is an average small-time businessman from Aligarh in Uttar Pradesh (UP). Jain, 23, is a director of the Rs 70-crore Pavna Group. It owns a university (Manglatayan) and also runs the local Delhi Public School. So far, Jain had been using billboards and local editions of newspapers to reach out to his core target audience of young students. Last year, he started advertising on Mumbai-based Big FM, among other FM stations. The 40 per cent rise in response (compared to print) surprised Jain. He plans to take his PC brand national, doubling his ad budget from Rs 5 crore to Rs 10 crore. A sleeper Bhojpuri hit, ‘Kab Aibu Anganwa Hamaar’, proved to be one of Hindustan Unilever's best marketing gambits in 2007. Initially, it scrounged around to reach out to consumers in SEC C, D and E categories in UP and Bihar using TV, but without much success. That is when it decided that the massive popularity of Bhojpuri cinema made it the ideal vehicle to ride into this market. In the movie, the female lead Naina - played by Shweta Tiwari who, along with Manoj Tiwari, is a major draw in Bhojpuri films - is the strength behind the hero’s (Tiwari) metamorphosis from a village bumpkin to a famous singer. She is referred to as Wheel Smart Shrimati in the movie. One of the songs in the movie, ‘mil gayili humka ek Smart Shrimati’ (I have got my smart Shrimati), was carried on all audio CDs and cassettes of the movie. An in-film sequence featured Active Wheel. In typical HUL fashion, the company refused to share numbers, but, "In terms of business results, UP and Bihar clocked impressive growths and are still continuing the momentum," says Dnyanada Chaudhari, head, media services, Hindustan Unilever.
In June 2007, the Noida-based B.A.G Films’ Dhamaal radio launched in 10 cities. Big deal? Yes, if you consider that Muzaffarpur, Dhule, Ahmadnagar, Jalgaon, Jabalpur, Hissar, Shimla, Patiala and Karnal are the towns in question. You may be tempted to look up some of these names in the map. Most analysts dismissed the station in Tier 2 and 3 towns, such as Karnal. These hardly made for hot advertising sources, was the logic. But they were in for a surprise. Total ad billings for Dhamaal rose from Rs 4 lakh a month to Rs 30 lakh. Anurradha Prasad, managing director B.A.G Films and Media, estimates that the figure would go up to Rs 50 lakh a month this year; she expects the station to break even in three years. "It is easier to get an audience in these towns," says Prasad. Small-town India is rocking. One estimate puts the value of sales from small towns at 30-50 per cent of the total for some of the leading durables, financial services and FMCG majors. Bajaj Auto's Pulsar, Discover and Platina are brands that are meant for small towns and do exceedingly well there. Mobile phone makers too are happy. "The last two years have seen a greater drive in Tier 2 and 3 cities," says Lloyd Mathias, director, marketing, India and South-West Asia for Motorola. Before proceeding further, an important distinction has to be pointed out. This story is not about rural India. It is about non-metro India. That means 382 towns, with populations ranging from one lakh to under 40 lakh. Some marketers also include towns with a population of 50,000. If you consider them, there are 779 towns. According to Hansa Research, the HPI or Household Premiumness Index (introduced three years ago) for many of these towns is higher than the national average. The HPI calculates the affluence levels after studying the demographics, ownership and consumption of products and services. It makes up for the shortcomings of using SECs to segment the consumers. Affluence levels in towns such as Kanpur, Indore or Surat are three-fourths or more than that in Mumbai. Not only do residents of these cities buy durables, financial services and telecom products at roughly the same pace as metro buyers, they also consume media in more or less the same quantities. Internet penetration, DTH sales and C&S (cable and satellite) off-take is growing faster in small towns. A recent report, The Dhoni Effect by Ernst & Young states that this is an attractive market in terms of purchasing power, time spent on media and product consumption. All this has led to a boom in mass media options. For long, "The perception of (mass) media was limited to the seven metros," says Tushar Dhingra, CEO, Adlabs Cinemas. Now, 1,700 digital screens, hundreds of multiplexes, over 225 radio stations, the rise of Bhojpuri, Bangla and Marathi cinema, the surge in language television and hundreds of language editions in print offer an undreamt-of range of mass media options. Boom, boomThe fact that mass media is finally reaching out to these towns in various forms is helping unlock their potential. "Industry has been pushing growth in small towns, but advertising had lagged. That has changed and advertising is following," says Vikash Mantri, assistant VP, ICICI Securities. Take Future Media, which is part of Kishore Biyani's Future Group. It offers everything from TV screens, radio stations, physical space and even a magazine to marketers wanting to reach out to the 200 million-plus consumers - claims the company - who walk into its 500-odd stores daily. In January 2007, when Future Media began selling space in these outlets, there wasn't much interest. "Six months later, they started walking in, asking to be shown the options," says Partho Dasgupta, CEO, Future Media. Over 300 brands, such as ICICI Bank, Vodafone, Mitsubishi Pajero and Club Mahindra now use Future Media's TV and activation options in Big Bazaar and Pantaloon among other stores. More than 60 per cent of these brands came, because they wanted to target small towns and their rising rupee power. The average deal size is Rs 30-40 lakh. Almost every media company is now plugging into this growth story. Sanjay Trehan, CEO, NDTV Convergence says that more than one-third of the traffic on NDTV.com comes from small towns. To cash in, it recently launched NDTVKhabar.Com. UFO Moviez, the country's largest digital theatre chain, has 1,080 screens across India. Of these, 80 per cent are in Tier 2 and 3 cities. Since 2005, when UFO rolled out its offering, "Each of these witnessed a 150 per cent jump in audiences walking in," says Rajesh Mishra, CEO, UFO Moviez. Viewership trends on TV too reveal the non-metro pull. According to Nikhil Rangnekar, executive director, India (West), Starcom Worldwide, the viewership for news in English, Hindi and other languages has grown faster in non-metros. It is the same for cricket and reality shows. As the acceleration sets in, several things are bound to happen across the value chain, from marketers to agencies. The metro bias within corporate India is reducing. So, media and ad agencies will go where the money is. Second, marketers will need to rethink everything, from the idea of value for money to premium for small towns. Mathias reckons that, in the last three years, the average value for most of the phones sold in these towns went up from Rs 3,000 to Rs 5,000. Popular features are extendable memory cards and MP3 players, something only metro buyers would be interested in earlier. Big spending in retail is now more visible. Earlier this year, the biggest bill in a Big Bazaar outlet, for Rs 2.25 lakh, came from Sangli, a town in Maharashtra with a population of 6.5 lakh. The fact that it is located in one of the highest sugar-producing districts in the country is really not the point. Bill sizes are increasing. "The number of items on the bill may be lower in Baroda than in the metros, but the per-unit value is higher," says Vishakha Singh, director, MaRCom, Future Media. The volumes too are bigger. Compared to 4,000 footfalls a day in Mumbai's upmarket Phoenix Mills area, Big Bazaar in Lucknow gets 16,000 people in the store. The media platformAs the prosperity of smaller towns draws in media, it has to learn to localise more. Radio, probably, has the biggest opportunity. Bundeli music in Jhansi, Dogri in Jammu and Bhojpuri in Ranchi is what gets audiences to switch to FM. Tarun Katial, CEO, BIG FM, points out that in many cases, FM has revived the local music industry. In Orissa, for example, ringtones and downloads have made Oriya music viable. Media agencies have to stop looking for spikes. For instance, the listening pattern on radio in small towns is flatter, since there is little commute time. This means stations can use all time bands, not just morning and evening,” says Katial. (To be continued...)
In June 2007, the Noida-based B.A.G Films’ Dhamaal radio launched in 10 cities. Big deal? Yes, if you consider that Muzaffarpur, Dhule, Ahmadnagar, Jalgaon, Jabalpur, Hissar, Shimla, Patiala and Karnal are the towns in question. You may be tempted to look up some of these names in the map. Most analysts dismissed the station in Tier 2 and 3 towns, such as Karnal. These hardly made for hot advertising sources, was the logic. But they were in for a surprise. Total ad billings for Dhamaal rose from Rs 4 lakh a month to Rs 30 lakh. Anurradha Prasad, managing director B.A.G Films and Media, estimates that the figure would go up to Rs 50 lakh a month this year; she expects the station to break even in three years. "It is easier to get an audience in these towns," says Prasad. Small-town India is rocking. One estimate puts the value of sales from small towns at 30-50 per cent of the total for some of the leading durables, financial services and FMCG majors. Bajaj Auto's Pulsar, Discover and Platina are brands that are meant for small towns and do exceedingly well there. Mobile phone makers too are happy. "The last two years have seen a greater drive in Tier 2 and 3 cities," says Lloyd Mathias, director, marketing, India and South-West Asia for Motorola. Before proceeding further, an important distinction has to be pointed out. This story is not about rural India. It is about non-metro India. That means 382 towns, with populations ranging from one lakh to under 40 lakh. Some marketers also include towns with a population of 50,000. If you consider them, there are 779 towns. According to Hansa Research, the HPI or Household Premiumness Index (introduced three years ago) for many of these towns is higher than the national average. The HPI calculates the affluence levels after studying the demographics, ownership and consumption of products and services. It makes up for the shortcomings of using SECs to segment the consumers. Affluence levels in towns such as Kanpur, Indore or Surat are three-fourths or more than that in Mumbai. Not only do residents of these cities buy durables, financial services and telecom products at roughly the same pace as metro buyers, they also consume media in more or less the same quantities. Internet penetration, DTH sales and C&S (cable and satellite) off-take is growing faster in small towns. A recent report, The Dhoni Effect by Ernst & Young states that this is an attractive market in terms of purchasing power, time spent on media and product consumption. All this has led to a boom in mass media options. For long, "The perception of (mass) media was limited to the seven metros," says Tushar Dhingra, CEO, Adlabs Cinemas. Now, 1,700 digital screens, hundreds of multiplexes, over 225 radio stations, the rise of Bhojpuri, Bangla and Marathi cinema, the surge in language television and hundreds of language editions in print offer an undreamt-of range of mass media options. Boom, boomThe fact that mass media is finally reaching out to these towns in various forms is helping unlock their potential. "Industry has been pushing growth in small towns, but advertising had lagged. That has changed and advertising is following," says Vikash Mantri, assistant VP, ICICI Securities. Take Future Media, which is part of Kishore Biyani's Future Group. It offers everything from TV screens, radio stations, physical space and even a magazine to marketers wanting to reach out to the 200 million-plus consumers - claims the company - who walk into its 500-odd stores daily. In January 2007, when Future Media began selling space in these outlets, there wasn't much interest. "Six months later, they started walking in, asking to be shown the options," says Partho Dasgupta, CEO, Future Media. Over 300 brands, such as ICICI Bank, Vodafone, Mitsubishi Pajero and Club Mahindra now use Future Media's TV and activation options in Big Bazaar and Pantaloon among other stores. More than 60 per cent of these brands came, because they wanted to target small towns and their rising rupee power. The average deal size is Rs 30-40 lakh. Almost every media company is now plugging into this growth story. Sanjay Trehan, CEO, NDTV Convergence says that more than one-third of the traffic on NDTV.com comes from small towns. To cash in, it recently launched NDTVKhabar.Com. UFO Moviez, the country's largest digital theatre chain, has 1,080 screens across India. Of these, 80 per cent are in Tier 2 and 3 cities. Since 2005, when UFO rolled out its offering, "Each of these witnessed a 150 per cent jump in audiences walking in," says Rajesh Mishra, CEO, UFO Moviez. Viewership trends on TV too reveal the non-metro pull. According to Nikhil Rangnekar, executive director, India (West), Starcom Worldwide, the viewership for news in English, Hindi and other languages has grown faster in non-metros. It is the same for cricket and reality shows. As the acceleration sets in, several things are bound to happen across the value chain, from marketers to agencies. The metro bias within corporate India is reducing. So, media and ad agencies will go where the money is. Second, marketers will need to rethink everything, from the idea of value for money to premium for small towns. Mathias reckons that, in the last three years, the average value for most of the phones sold in these towns went up from Rs 3,000 to Rs 5,000. Popular features are extendable memory cards and MP3 players, something only metro buyers would be interested in earlier. Big spending in retail is now more visible. Earlier this year, the biggest bill in a Big Bazaar outlet, for Rs 2.25 lakh, came from Sangli, a town in Maharashtra with a population of 6.5 lakh. The fact that it is located in one of the highest sugar-producing districts in the country is really not the point. Bill sizes are increasing. "The number of items on the bill may be lower in Baroda than in the metros, but the per-unit value is higher," says Vishakha Singh, director, MaRCom, Future Media. The volumes too are bigger. Compared to 4,000 footfalls a day in Mumbai's upmarket Phoenix Mills area, Big Bazaar in Lucknow gets 16,000 people in the store. The media platformAs the prosperity of smaller towns draws in media, it has to learn to localise more. Radio, probably, has the biggest opportunity. Bundeli music in Jhansi, Dogri in Jammu and Bhojpuri in Ranchi is what gets audiences to switch to FM. Tarun Katial, CEO, BIG FM, points out that in many cases, FM has revived the local music industry. In Orissa, for example, ringtones and downloads have made Oriya music viable. Media agencies have to stop looking for spikes. For instance, the listening pattern on radio in small towns is flatter, since there is little commute time. This means stations can use all time bands, not just morning and evening,” says Katial. (To be continued...)
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