As brands shift focus to Tier II and Tier III cities, the Dainik Bhaskar Group cashes in on its investment in these markets to garner a major share of ad revenues.
Give me but a firm spot on which to stand, and I shall move the earth. - Archimedes
As Archimedes famously said centuries ago, explaining the working of the lever, all one needs is half an opportunity and a lot of intelligence to move the earth. Cut to the present and the ad-media marketing world, and his wisdom stands true as ever. As all brands shift focus to tier II and tier III cities, riding on the promise of growth due to rising consumerism, there is a buzz among the major media players in these markets to cash in on the opportunity. One player that has done better than all others on this front is Dainik Bhaskar Corporation Limited (DBCL), using foresight and intelligent positioning of products to bag a substantial share of the advertiser’s budget in these markets. though Dainik Bhaskar, the group’s flagship newspaper, stands at no 2 in terms of readership among Hindi dailies according to the Indian readership survey (IRS), it is a clear leader when it comes to advertising revenues.
INTERVIEW: We are an editorial success, fantastically marketed to the consumer, says Girish Agarwal
ADDING UP THE NUMBERS
The Dainik Bhaskar group’s profits are more advertising-driven than circulation-driven, while rival Jagran Prakashan Limited (JPL), the leader in terms of readership, seems to have more circulation-driven profits. For FY 12-13, the Bhaskar group’s ad revenue stood at rs 1,207.5 crore, while circulation revenue Was at rs 282.3 crore. Jagran, on the other hand, garnered ad revenues to the tune of rs 1,052.5 crore while its circulation revenues stood at rs 319.2 crore for the same year. Overall profits compare at rs 1,613.7 crore for DBCL against JPL’s rs 1,525.5 crore for the just concluded financial year. Girish Agarwal, Nonexecutive Director of DBCL, explains that the group’s strategy to remain on top in terms of ad revenues is to leave absolutely no room for any new incumbent to come in easily in their markets. “even after five years, the no. 2 newspaper in Madhya Pradesh, I am told, has a bleeding balance sheet. Our strategy is not to charge a higher cover price beyond a point, but t o increase penetration in that market,” adds Agarwal.
The advent of other players in the group’s home market of Madhya Pradesh doesn’t seem to faze Agarwal either. “We have around 50 lakh readers in MP and Chhattisgarh markets. The no. 2 player has just completed five years, and their total readership is at 17 lakh. Numbers tell the whole story,” he says.
DBCL operates on a strategic business model that tracks various categories for their trend of marketing spends, demand potential and growth prospects. The data-analytics-driven planning enables a sustained revenue generation. “the opportunity in tier II and tier III markets provides us the impetus to move forward and be true catalysts and partners in the rapid socio-economic change. Hence, we remain confident about future revenue prospects,” asserts Pradeep Dwivedi, Chief Corporate Sales & Marketing Officer of DBCL.
Even media planners laud the group for its aggressive approach in building numbers. “the DB group had the foresight to expand in tier II and tier III markets much before the growth started and now they are reaping the benefits,” says Suresh Balakrishna, CEO, BPN India.
WHY NOT UP AND BIHAR?
The 55-year-old group’s expansion spree began with its first foray outside its hometown, Bhopal, in 1983 with the launch of its Indore edition. It has continued since, first moving out of Madhya Pradesh to other states, and then venturing into non-hindi speaking markets with Gujarati and Marathi language newspapers.
However, dainik Bhaskar surprisingly does not have a presence in Uttar Pradesh, the largest state in the hindi belt, or Bihar. Asked whether the group plans to enter these states, Agarwal says, “We just launched Divya Marathi in Maharashtra two years back. It has been a very encouraging market so far, and we plan to launch in Akola and Amravati this year itself. We are tied up with expansion in our markets. We are keeping an eye on other markets, but can’t comment as of now. I am not too sure about UP, as it is not a very lucrative market. We have evaluated some markets, but no decisions As yet.”
Meanwhile, the group has launched a digital-only edition for UP, as an experiment. According to Agarwal, the response has not been “amazingly good”. “Unfortunately, since we don’t have a huge background in UP, people don’t relate us to UP. It will take some more time,” he says.
In Maharashtra, Divya Marathi seems to have hit the right chord with sec AB readers, but beyond that, the group is yet to gain traction and volume in the market with tough competition from players such as Lokmat, Maharashtra times and sakaal. Agarwal’s contention here is that the advertising is all about sec A and B, and so there is no point focusing on C or d or any other category. The group’s radio offering 4.3 FM too, follows the general DB focus on nonmetro cities and their own markets. With Phase III auctions in the offing, the areas in which 94.3 FM is likely to bid for stations is the Group’s existing markets. “Markets which are opening up newly in the radio business, we’ll take those, but we will not look at any metro or beyond our markets. Will I take a radio station in the South? No,” states Agarwal.
As for mergers and acquisitions (M&As) to expand re-ach, while the Nai Dunia and Mid-Day acquisitions proved lucrative for competitor Jagran, DBCL is not looking at M&As just now. “However, if it is sensible, rightly priced and the right opportunity, we would be open to looking at it,” Agarwal says.
BALANCING THE BUSINESS
DBCL’s business model is based on key markets equally contributing towards top-line, bottom-line and readership, apparently to reduce the dependability on any one single market. The strategy is not to be focused on any particular market, though newspapers worldwide have traditionally been focused on a particular State or region, often having these places names coined in their mastheads. “We took this call way back in 1995. As dependability goes up on any one market, and its politics and economics, if something goes wrong there, you are done for. We are happy that we are present in 13 States, and all these 13 markets are doing well for us. The idea is that every market should be self-sufficient,” says Agarwal.
ROPING IN ADVERTISERS
What does the Dainik Bhaskar Group do to garner more advertising revenues, and make its products a better environment for the advertiser? Agarwal quotes Mahatma Gandhi here: ‘Focus on the end and the means will follow.’ The strategy is not to chase advertisers, but to consider the reader as the end, and advertising as the means. “You need to have the right reader, because the advertiser is actually advertising to reach out to a particular consumer; so if I am able to get the consumer, he will come to me,” comments Agarwal. At the same time, the Group offers multiple solutions to the advertiser, even helping brands to reach out to their target group, knowing when and how these consumers read its newspapers. While integrated advertising exists for the Group’s Print editions pan India, would it not help the advertiser if there was integrated advertising offered with Digital or even Radio within the Group? Agarwal rubbishes offering a 360-degree approach as “jargon”, saying agencies and clients are not geared that way. “There are different parameters to evaluate the cost effectiveness of all these media. Not only in India, worldwide not much business is happening in an integrated manner,” he says.
(Transcription credit: Saloni Dutta)
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