ADVERTISING: Rupert Murdoch's plan to launch six regional television channels in India is based on the boom in the regional advertising space; the southern states, Maharashtra and West Bengal emerge as lucrative markets.
When News Corporation chairman Rupert Murdoch was in India a couple of weeks ago, he announced that the company would invest $100 million in starting six regional language television channels within a year. What prompted Murdoch, who has a presence in the country through Star India, to go regional? The answer is a straightforward one: India’s booming regional advertising market.
In 2007-08, regional advertising grew 22.7 per cent according to the India Media Exchange (the media specialist of Starcom and ZenithOptimedia combined). National advertising grew 14.6 per cent.
Clearly, the regional markets are growing rapidly as television audiences shift from national channels to the local language channels.
Mona Jain, India head, strategic investments, India Media Exchange, says: “May be a bit late, but the Star Network has realised that there is nothing called the Hindi belt or a pan-India coverage. Zee, its nearest competitor, already has a headstart due to its regional channels in Marathi, Bengali, Telugu and Gujarati, among others. These are well-established and translate into revenues for them.”
Tamil Nadu, Maharashtra, Kerala, Andhra Pradesh, Karnataka and West Bengal are the most lucrative language markets. Jain says that Maharashtra alone makes up 13 per cent of the regional market and 2.5 per cent of total advertising market. Gujarat and Punjab are also expected to switch to local channels.
Media planners find the regional media attractive for a number of reasons. The local channels are cost-effective for advertisers, focused and reach the desired audiences in their environment (with no spillovers into other markets).
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Chandradeep Mitra, president and head, Mudra MAX (Media, Analytics & Convergence), says: “The Dhoni effect or the reality TV show impact has led to high material aspirations in rural India. Advertisers are just tapping the opportunity. They have begun to focus on local consumers. Moreover, regional markets are also great starting points for product launches and hence act as ideal test markets.”
Earlier, the ads were conceived in Hindi or in English. However, over the years, advertisers, including multinationals, have realised the need for local campaigns. “Companies like Pepsi, GSK and Nestle have local heroes and ads endorsing their products,” says Jain.
The current slowdown is also pushing companies into the regional markets. Sales of durables and services in particular are spreading into smaller markets. R Zutshi, deputy managing director, Samsung India, says: “We are focusing more on regional advertising. The spike in commodity prices has resulted in more money in the pockets of rural consumers.”
The total regional advertising (print, TV et al) market stood at Rs 2046.2 crore in 2007-08. Of the total advertising market in India, the national versus regional ratio was 81:19 per cent, clearly skewed in favour of national advertising. However, according to AdEx India (a division of TAM Media Research), the share of regional advertising on television is substantial. During the first half of 2008, national and regional channels were used in an advertising ratio of 59:41.
Regional advertising is growing thanks to newer sectors such as education, hospitality, real estate and jewellery tapping into this market. Urban saturation is also leading the national level brands to push their products in the regional media.
Of the total ad spend on print media in 2007, English got 48 per cent share while Hindi and other language press grabbed 52 per cent. On television, the gap was wider, the share of spends on the English channels was 20 per cent compared to 80 per cent on Hindi and other Indian languages.
