 "Regional media groups pad up for an ad rush")
A few years ago when chocolate maker Mondelez, owner of the Cadbury brand, wanted to engage with consumers in West Bengal, it chose the ABP Group, publisher of The Telegraph and Ananda Bazaar Patrika, to do so. A hybrid chocolate called Cadbury Mishti (local sweets with Cadbury Dairy Milk as an ingredient) was launched and soon became a hit. The product, in the past five years since the association, has moved beyond Kolkata into areas such as Bardhaman, Asansol, Krishnanagar, Durgapur and Berhampore. What was unique and innovative then is today par for the course; as e-commerce unlocks consumption from small towns in India, brands are rushing in with special local variants and partnering with local media to spread the word. In many respects, say experts, this is a sign of the times to come for regional media groups as advertisers increasingly move into the hinterlands.
A good monsoon after two years of drought has meant that farm incomes will improve. Rural demand and consumption, therefore, is likely to see an uptick. Companies are expected to take full advantage of this including those in fast-moving consumer goods, durables, retail, auto, telecom and handsets.
"Companies will get back to the drawing board and devote their attention to expanding distribution, looking at rural-focused products, much of which had taken a bit of a backseat over the past two years ," says Abneesh Roy, senior vice-president, research, institutional equities, Edelweiss. The prospect of rural recovering faster than urban is also stronger, he says. Chandan Majumdar, director, advertising, ABP says the work for Cadbury is one among the many that the group's integrated marketing division ABP One is undertaking for companies.
Sunil Duggal, chief executive officer, Dabur India, says, "If the government continues to keep its focus on rural welfare and on lifting the minimum support price of crops it will help. While work has begun in these areas, the effort may have to be galvanised to instill faith in people in the hinterland to increase consumption of staples."
Against this backdrop, say experts, regional media groups are best placed to capitalise on this impending groundswell that is expected to show up in a couple of quarters in rural and semi-urban areas. As Paritosh Joshi, independent media consultant, says, most regional media groups have editions today at district levels within markets where they operate. "Their understanding of the lay of the land, therefore is enormous, giving them a natural advantage as advertisers look at smaller towns and markets in their quest for growth." Print and television play a bigger role here, especially in regions where there is limited digital penetration.
Alok Sanwal, chief operating officer and editor, i-Next, Jagran Prakashan, says, "Bundled offers, exclusive digital tie-ups, new formats and events are part of what we do for advertisers who are keen to tap consumers in smaller towns and cities. The delta in terms of incremental growth in revenues for publishers is almost 15-20 per cent. This has the potential to touch 40-45 per cent in the next few years."
According to the Pitch Madison Advertising Report 2016, Hindi-language publications grew at the rate of eight per cent in terms of expansion in column-centimetre space in 2015, ahead of English-language publications at seven per cent. Some other regional language publications such as those in Oriya grew even faster than Hindi in terms of their rate of growth in column-centimetre space at 13 per cent, while Bengali-language publications were the fastest at 14 per cent in terms of rate of growth in 2015.
Television is not far behind, says Joshi, with most key broadcasters such as STAR, Sony, Zee and Viacom18, amplifying their presence in the regional-language space with acquisition of networks and channels. However, a recent update of Madison's 2016 Advertising Report has trimmed overall TV advertising growth rates for the year to 11 per cent from 20 per cent earlier. Print growth rates, on the other hand, remain intact at 10 per cent, the update says.
The lowering of its TV growth forecast for the year has been pinned down by Madison to lower advertising spends by e-commerce majors this year, something it says is coming about as e-tailers increasingly focus on profitability. But, traditional advertisers in Fast-Moving Consumer Goods, durables, auto, telecom and handsets are expected to continue keeping their eye on the hinterlands, which means regional media groups from print to television, radio, outdoor and digital will have a field day.
Rising regional focus among brands and the growing importance of small town consumers is also changing the nature of advertising across categories. Tune in to an ad on television or radio these days, and local languages, tastes and flavours are impossible to miss, indicating an ongoing shift in the way brands are designing their national strategies. But, that is another story.
A good monsoon after two years of drought has meant that farm incomes will improve. Rural demand and consumption, therefore, is likely to see an uptick. Companies are expected to take full advantage of this including those in fast-moving consumer goods, durables, retail, auto, telecom and handsets.
"Companies will get back to the drawing board and devote their attention to expanding distribution, looking at rural-focused products, much of which had taken a bit of a backseat over the past two years ," says Abneesh Roy, senior vice-president, research, institutional equities, Edelweiss. The prospect of rural recovering faster than urban is also stronger, he says. Chandan Majumdar, director, advertising, ABP says the work for Cadbury is one among the many that the group's integrated marketing division ABP One is undertaking for companies.
Sunil Duggal, chief executive officer, Dabur India, says, "If the government continues to keep its focus on rural welfare and on lifting the minimum support price of crops it will help. While work has begun in these areas, the effort may have to be galvanised to instill faith in people in the hinterland to increase consumption of staples."
Alok Sanwal, chief operating officer and editor, i-Next, Jagran Prakashan, says, "Bundled offers, exclusive digital tie-ups, new formats and events are part of what we do for advertisers who are keen to tap consumers in smaller towns and cities. The delta in terms of incremental growth in revenues for publishers is almost 15-20 per cent. This has the potential to touch 40-45 per cent in the next few years."
According to the Pitch Madison Advertising Report 2016, Hindi-language publications grew at the rate of eight per cent in terms of expansion in column-centimetre space in 2015, ahead of English-language publications at seven per cent. Some other regional language publications such as those in Oriya grew even faster than Hindi in terms of their rate of growth in column-centimetre space at 13 per cent, while Bengali-language publications were the fastest at 14 per cent in terms of rate of growth in 2015.
Television is not far behind, says Joshi, with most key broadcasters such as STAR, Sony, Zee and Viacom18, amplifying their presence in the regional-language space with acquisition of networks and channels. However, a recent update of Madison's 2016 Advertising Report has trimmed overall TV advertising growth rates for the year to 11 per cent from 20 per cent earlier. Print growth rates, on the other hand, remain intact at 10 per cent, the update says.
The lowering of its TV growth forecast for the year has been pinned down by Madison to lower advertising spends by e-commerce majors this year, something it says is coming about as e-tailers increasingly focus on profitability. But, traditional advertisers in Fast-Moving Consumer Goods, durables, auto, telecom and handsets are expected to continue keeping their eye on the hinterlands, which means regional media groups from print to television, radio, outdoor and digital will have a field day.
Rising regional focus among brands and the growing importance of small town consumers is also changing the nature of advertising across categories. Tune in to an ad on television or radio these days, and local languages, tastes and flavours are impossible to miss, indicating an ongoing shift in the way brands are designing their national strategies. But, that is another story.