The PitchMadison Advertising Report 2019, released in Mumbai on February 13, brought with it high cheer and a bullish forecast for growth of the advertising industry in 2019. It predicted that in 2019, the market is expected to grow by 16.4%, adding Rs 9,980 crore to Adex, taking it to an all-time high of Rs 70,888 crore. The growth is expected to come on the back of General Elections, ICC Cricket World Cup and IPL, and India slowly turning into a consumption society.
KEY FINDINGS OF THE REPORT
• Indian Adex grew by 14.6% in 2018, surpassing PMAR 2018 projection of 12.8%
• In absolute terms, Adex has grown from Rs 53,138 crore to Rs 60,908 crore, an addition of Rs 7,769 crore, the highest addition in one year in the last decade
• The growth rate of 14.6% achieved in 2018 is almost double the growth rate achieved in 2017
• Most of the growth comes from Digital, which grew by almost 26%
• TV grew by an unbelievable 19% to reach close to the Rs 23,500 crore mark, reinforcing regular advertisers’ unshakeable faith in this medium, no doubt aided by the robust measurement mechanism set up by the industry.
• TV still continues to be the largest contributor to Adex with 38% share, followed by Print at 32%, Digital at 19%. Outdoor, Radio and Cinema share has remained steady at 6%, 4% and 1% over the last three years
• India is probably the only major market where Print Adex is actually growing year on year. Print grew by 4.4% during the year
• In 2019, highest growth will come from Digital at 33%, followed by Cinema at 30% (although on a very small base), followed by TV (18%), Radio (12%), Outdoor (11%) and Print (5%).
FMCG HAS ALWAYS BEEN ABOUT EXCELLENT MASS-MARKET BRAND-BUILDING: SUNIL KATARIA
Sunil Kataria, CEO - India and SAARC, Godrej Consumer Products Limited (GCPL) emphasised the need to re-write the rules of the game in the FMCG category. Kataria noted that it is indeed the need of the hour to unlearn the traditional tricks to adapt to the rapidly transforming business ecosystem. The fact that the FMCG industry has a long history of generating reliable growth through mass brands is not unknown. But the model that fuelled industry success now faces great pressure as consumer behaviour shifts and the channel landscape changes. To win in the coming decades, FMCG companies need to reduce their reliance on mass brands and offline mass channels and embrace an agile operating model focused on brand relevance.
“FMCG has always been about excellent massmarket brand building,” Kataria said, pinpointing the mass-targeting, mass scale innovation, and renovation that goes in it. He went on to elaborate on the industry’s potential to leverage the scale and efficiency of mass media-optimising reach and frequency. “It is time to move from efficiency to effectiveness in the fragmented media space,” he advised and emphasised that it could be done with optimisation of mass media to create threshold awareness, effective use of vernacular mass media to enhance engagement and the room for experimentation and expertise in digital and mobile. “The power lies with the brand and this is what FMCG is doing brilliantly,” Kataria remarked and spoke about changing consumer behaviour. “Every FMCG company would have a consumer care telephone line number. But ask the question that how many calls actually come on it,” he asked. “Consumers’ decision-making is influenced by what others are telling them,” he said. The key, therefore, “lies in enabling an informed, engaged consumer behaviour” by creating authentic advocates and influencers, a continuous understanding of the accelerated consumer journey and establishing brand differentiation with a purpose. FMCG marketers, he said, are the most spoilt because they tend to outsource everything. “From the creative brief, communication and media briefs to the measurement, everything is outsourced. This model has created partners who are specialists in outsourcing.” He recommended that this may be worked on if brands stay on top of the data edge with micro-analytics within syndicated sources, first-hand consumer understanding using online or offline immersions and building content expertise. Talking about the growth of the non-mainstream and vernacular, Kataria commented, “The emergence of local heroes is a challenge for us.” He recommended the importance of meaningful micro opportunities, the right structure and local empowerment to win these local battles and ensure local relevance to make the real impact.
PANEL: WHAT DOES IT TAKE TO REVAMP THE MEDIA ECOSYSTEM?
A high-power panel discussed what needs to be changed in the media ecosystem. It was moderated by Raj Nayak, former COO, Viacom 18. Nayak was joined by Gaurav Jeet Singh, General Manager, Media (South Asia), Unilever, Subha Sreenivasan, Head- Media Services, GCPL, Anagha Bhojane, Group Brand Manager, Asian Paints, Vanita Keswani, CEO, Madison Media Sigma and Vikram Tanna, VP, Head of Advertising Sales and Business Head of Regional Clusters, Discovery India. The key take-aways from the panel are:
• Data of viewers needs to be seen across media platforms, and media integration needs to be taken seriously.
• Individual data is potent, and must be viewed as content measurement, not just as a platform measurement.
• While a lot of money is being poured into Digital, the medium is still not being exploited to its complete potential. Brands and media planners need to identify how they can get viewers on Digital platforms to actually watch their commercials instead of hitting the ‘skip’ button.
• Problems arise when media planners and brands pit one medium against another. Media is consumed across platforms and screens, and therefore should not be viewed in silos.
• As businesses began to get competitive, the role of an agency has changed from a service provider to a partner. If agencies don’t adapt to this changing role, they will not survive.
Manu Jain, VP, Xiaomi & MD, Xiaomi India described how the brand had innovated and built itself up with minimal marketing expenditure. Xiaomi has been a game-changer in the Indian smartphone market, having gained a market-share of 27% in Q4 2018 within three years of making its entry into India. “When we launched this company nine years ago, we wanted to change how people consumed mobile Internet,” said Manu Jain, speaking at the event. “We started in April 2010 with the biggest statement, which was ‘innovation for everyone’. We wanted to launch high quality products and to make them accessible so that everybody could enjoy technology,” Jain recounted, adding that the company’s business models have evolved greatly since then. How then does the brand keep marketing expenditure low, while still growing the way it has over the past few years? Jain shared three basic principles that Xiaomi follows. “Whenever we think of launching a hardware device, these are the three basic principles that we follow: great specifications, great quality and honest pricing. Honest pricing doesn’t mean that it has to be the lowest selling price, but rather means that we cut off all the possible costs like distribution, marketing capital, inventory, etc.,” he said. Jain was also quick to point out that its innovative strategy has enabled Xiaomi to become one of the fastest growing tech companies in the world. “To reach a revenue of $15 billion, Google took nine years, Facebook took 12 years, Ali Baba took 17 years and Apple took 20 years. Xiaomi reached that $ 15billion mark in just about seven years!” Jain exclaimed.
He also threw light on Xiaomi India’s journey, one that began in July 2014 with only six people. Several tech and telecom experts and CEOs dismissed the company and said it would never succeed in India. Moreover, the strategy of selling online when the entire market was offline was one they viewed with much trepidation. Jain proved the naysayers wrong at the time of the launch. “The first sale was on July 22, 2014, on Flipkart and the site crashed. Flipkart crashed for the first time in its history because about half a million people had turned up to buy 10,000 phones,” he said.
Talking about the brand’s offline journey, Jain spoke about their first offline store in a 600 sq foot location at a Bangalore mall. The store saw an impressive sale of Rs 5 crore on the first day of the launch. That encouraged Jain to begin building a lot of stores across the country. Xiaomi is looking specifically at Tier II and Tier III cities and rural markets for its offline expansion.
PANEL: THE GROWING IMPORTANCE OF NEWS
It is only apt in election year that there should be a debate on the growing importance of news. The panel discussion at PMAR, moderated by Vikram Sakhuja, Group CEO, Media & OOH, Madison World, had Avinash Pandey, CEO, ABP News Network, Umang Bedi, President, Daily Hunt, Puneet Gupt, COO, Times Internet and Rahul Kansal, Group Brand Advisor, Network18 as participants. The key points they made were:
• Every media company in the news space is left or right wing, i.e., politically aligned. One thing that is changing in India is people don’t care about national news – all they want is local news. Local is becoming the way to go in India.
• Digital numbers are growing because the time spent on mobile devices across news category has grown seven times. News companies must therefore look at leveraging the medium better.
• On TV, the share of news from television viewing hours has become 8.5% from 6.5%. News as a genre, therefore, is clearly attracting more eyeballs.
• TV as a medium is not going away. While in the West, the medium is said to be dying, here in India the medium under threat is Print.
CREATING A FRICTIONLESS EXPERIENCE: NAMITA KATRENamita Katre, Head of Brand, Strategy and Campaigns, Uber Eats India spoke about the joys and travails of a new age business, and pointed out the need to create a hasslefree experience for consumers. Talking of the challenges marketers are facing, Katre said, “Nearly 130 million people have been internal migrants in India. It is a mindboggling number as people are nomads within our country and we equip ourselves to talk to them differently. Today, we cannot launch a new-age business and come into the world with existing assumptions about the consumers, the audience, and the products. That is the biggest flaw we could make as business people or marketers,” she said. Katre added that it is now fundamentally the time to contemplate and re-examine what is it that we need to do differently. Talking about the trends that have impacted the online food delivery business positively, Katre said that internal migrants, more women in the working population and sanction for outside food are some of the factors that have made the online food delivery business thrive.
MEASUREMENT IMPORTANT FOR STORY-TELLING: GAURAV BANERJEEGaurav Banerjee, President, Hindi Entertainment, Star India, stressed the importance of measurement and feedback in content in Television. “The fact that you can measure content and get immediate feedback allows your idea to become better. I’m a guy who gets a report every Thursday and we think about what we did wrong and what could be made better,” he said. Banerjee also highlighted the scale of work that Star India is doing and how its viewership is almost a continent in itself. “When we get the story right on any Hindi entertainment channel today, the number of people watching it is equal to a small continent. One of the good shows that we have right now is a show called ‘Kullfi Kumarr Bajewala’ running in four different languages and the total viewership of this show alone is over 25 crore. So that is the scale of content that we do,” he said. Talking about Star’s IPL success story, Banerjee remarked, “Last year, more people watched IPL than the number of voters in the 2014 general elections. The great part about good story-telling is that we can spark really deep conversations. We can do it better when we get feedback from our viewers.” He also pointed out that the divide between TV and Digital is artificial and had no bearing on great story-telling.
WHAT’S IN STORE FOR MEDIA IN THE NEAR FUTURE?
In a highly VUCA media world, Vikram Sakhuja, Group CEO, Media and OOH, Madison World, takes a look at what lies ahead Today, 11,000 TV and radio advertisers, over two lakh print advertisers, 1,500 OOH advertisers and 300 large Rs 2 lakh long tail online advertisers think long and hard about how to spend their marketing budgets.
On one hand, it costs Rs 30-40 crore to do a significant national launch, but advertising on IPL can exceed Rs 100 cr for some advertisers. A YouTube masthead or a TOI jacket costs excess of a crore, a 10-day OOH plan in Mumbai can cost over a crore. Yet an average advertiser spends under Rs 5 crore a year on TV, Rs 2 crore on OOH and in lakhs on other mediums. At the top, there are only 12 advertisers with spends more than Rs 500 cr. At a brand level, an equal number (12) spend more than Rs 100 cr. For all of them, budget management boils down to making trade-offs between mediums and media objectives. By mediums, I mean TV, Print, Radio, OOH, Digital, Cinema, and media objectives: Reach, Frequency, SOV, weeks on air, advertising size and “impact vs regular” inventory.
How media shapes in the future will depend on how advertisers, agencies and media owners use different mediums across these fundamental media objectives. Two marketing practices will impact the way we spend. One, we have to act truly integrated. Today we evaluate a TV plan in CPRP, Print in rate/sqcm, Radio in Rate/10”, OOH in rate/site, Digital in CPT or CPO, etc. This needs to move to an apple to apple CPT. Over this we can add Outcomes and measure CPO. Two, we need increased localisation. We need to factor India’s heterogeneity much more into our marketing plans than we do currently. To do that we need to build our capability to drive Reach at local levels.
So, what’s in store for Media in the near future is essentially harder working outcome-based marketing . Brand budget growth follows an arithmetic progression while demands from marketing forces increase at a geometric progression. The following six forces will shape the advertising spend market.
1. Expansion of marketing funnel. We used to make tradeoffs between mediums and media objectives (R/F/SOV/WOA/ ACD/Impact). This was largely about getting consumers to see an Ad. Now we will additionally make trade-offs between getting them to see, explore, experience, buy and share across the journey. If that happens TV will lose relatively and all others will gain.
2. Integrated Reach will continue to be critical. More media touchpoints will be required to get reach. Marketers will seek it in an integrated manner. Campaigns will maximize reach and optimize frequency across media. CPT will become the common currency that equates cost of an impression across media.
3. Greater Localisation: It will become increasingly impractical and inefficient to market to one India. Additionally the trade-offs between markets will become sharper than our current P1, P2 classification. Greater digitisation and channel selection will lead to more localisation. TV will be used as a local medium more than it ever has. Digital, OOH, Radio, Cinema will work in combination better than they work in silo. Print will need to redefine its value to a local marketer and will find a huge role.
4. Integrated Reach, CPT and greater localisation will lead to more intelligent media selling. All Mediums will have a role. From selling Media like onions and potatoes, there will be a need to find brand building solutions. In the near tho’not immediate future, Media in India will get truly integrated as smart devices get connected in what we know as IOT.
5. Data and tech will revolutionalise targeting. We will increasingly target geographically, psychographically, contextually and behaviourally. We will increasingly retarget sequentially with customised messaging. Any medium with a digital backbone leverage this capability
6. We will decode how media works. Increasingly, through a combination of marketing analytics and real time attribution, we will understand what sequence of media drives consumer behaviour for each category.
