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Category: Media and Advertising

  • ‘Ad sector will see a double digit growth this year’ : Havas Media India & South Asia CEO Anita Nayyar

    ‘Ad sector will see a double digit growth this year’ : Havas Media India & South Asia CEO Anita Nayyar

    As the advertising industry prepares to come out of the slowdown clutter, Havas Media has found proper representation in India‘s two high-growth sectors: telecom and automobiles.

     

    While Maxx Mobiles came into the fold in 2009, the big catch this year has been Hyundai.

     

    Havas has almost 50 per cent of its revenues coming from the top five clients – Reckitt Benckiser, Jockey, Bank of Baroda, Max Mobiles and MTS. With Hyundai falling into the net, the top six are in a position to power the media agency‘s growth story in India.

     

    Havas will stay Delhi and Mumbai focussed while posting slow growth from its three southern offices – Bangalore, Chennai and Hyderabad.

     

    The big push will come from its integrated funtions – sports, digital and out-of-home.

     

    In an interview with Indiantelevision.com‘s Anindita Sarkar, Havas Media India & South Asia CEO Anita Nayyar speaks about her company‘s growth plans at large.

     

    Excerpts:

     
     
    How has the first half of the year fared for MPG India?

    We are on track as far as revenues and billings are concerned. On a percentage basis, we have met out targets quite in line with last year and the growth has come from both existing and new businesses. While our existing clients have fared better for us this year, the new businesses have also helped in pumping up the growth.

     
    But are you implying that 2010 has been similar to 2009 in terms of growth?

    Yes. We won MTS and Maxx Mobiles last year and Hyundai this year, all large and prestigious clients. And both telecom/handsets and automobiles are considered as categories doing well with minimal recessionary impact. We also won Dixcy, News X and M3M this year.

     
    As far as revenues are concerned, which clients and categories are the largest contributors?

    We have a client list that is upwards of 50 and across categories which include FMCG, telecom, automobiles, banking, mobile hand sets, beauty and wellness, media and real estate. About 40-50 per cent of our revenues come from our top five clients – Reckitt Benckiser, Jockey, Bank of Baroda, Maxx Mobiles and MTS.

     
    What are your expectations for 2010?

    We foresee a decent growth in 2010, given that 2009 was a recessionary year. Percentage growth in our integrated functions – sports, digital, and out-of-home – will be better as margins in offline business is pretty low.
     
     
    But has not out-of-home taken a hit this year?

    I don‘t think so. In fact, out-of-home has been doing very well for our clients and though it has not increased dramatically, it has surely not taken a dip.

     
    ‘About 40-50 per cent of our revenues come from our top five clients – Reckitt Benckiser, Jockey, Bank of Baroda, Maxx Mobiles and MTS‘

     
    Which are the geographical areas that show potential in terms of advertising?

    As far as we are concerned, we have five offices across India – Delhi, Mumbai, Bangalore, Hyderabad and Chennai and we expect our growth to come in primarily from Delhi and Mumbai. Growth from the southern market is slow for us.

    Overall, from the consumer‘s point of view, the potential surely lies in the semi-urban and rural areas.

     
    How are the other divisions faring – Havas Sports & Ent, Media Contacts and MPG active?

    All three are doing well and on an upswing. Havas Sports took up interesting projects during IPL like the strategic sponsorship deal and the Dhoni endorsement with Max. We are in the process of finalising some more deals. Digital is seeing an interesting growth and Media Contacts is encashing on the situation. MPG Active has been in the news for executing interesting campaigns including the one on INQ Mobiles where they executed the country‘s tallest billboard.

     
    How do you predict the 2010 advertising scenario to be like?

    We should hit double digit growth in 2010. It should be somewhere in the region of 10-12 per cent, though the pace is a bit slow.

     
    According to Tam, the first half of the year has seen a 36 per cent rise in TV ad volumes. Revenue, however, is not growing at the same speed. Why?

    There is too much of a fragmentation today and this is making it difficult to attract the consumer. There are multiple touch points today to capture consumer attention and you never know when and where the consumer will spot the advertisement. And though the ad volumes are increasing, we are not seeing much increase in ad rates.

     
    How much of a change has recession brought into the functioning methods of an advertising strategy?

    When recession‘s not around, we tend to work more liberally. However, recession always teaches businesses to get more from less and our business is no exception. This time around, it taught us to keep a tight watch on our purse string. It told us that we can do with lesser inputs, work, people and resources. Also, while there was a bit of retrenchment as far as our industry is concerned, it was more about not giving increments during the period.

     
    Which advertising platform is expected to show the maximum growth?

    Digital for sure. This is because the medium is progressing towards accountability and efficiency. The platform is seeing about 40 per cent growth year-on-year as advertisers are increasingly getting into the digital and media space.

  • Advertisers chase soccer World Cup

    A day to go to the Fifa World Cup and fans are already geared up to pump their lungs that would scream and pound to cheer their favourite teams.

    And to attract those fans, companies around the world are devising various strategies to build consumer connect.

    These range from apparel manufacturers, airlines and TV hardware companies to gaming and DTH service providers. Everybody wants a piece of the action which comes around just once in four years.

    However, there is a certain amount of caution in the market in terms of marketing spends as the economic downturn is just over. Also, not all Fifa partners are doing activation around the event.

    Products that will be the most active are youth centric and upper middle class brands that would be targeting the urban youth. This would be important as international footballers are treated almost on par with cricketers – at least in three states. There is, as expected, some amount of activation happening in Goa, Kerala and West Bengal where the interest for soccer is high.

    Percept India joint MD Shailendra Singh notes that male specific brands for the foreseeable future would be active. “This is because marketing ultimately has to justify some sort of RoI and products that are looking for a higher sale during this period would be the ones that would market extensively,” he says.

    Boon for ESPN Star Sports: Broadcast partner ESPN Star Sports is expected to clock an advertising revenue of Rs 1 billion from the Fifa World Cup.

    ESS has sold most of its inventory and has roped in sponsors that include Vodafone, Airtel, Nokia and Samsung.

    ESS MD RC Venkateish expects a 25 per cent growth in ratings this time around. “Last time the event managed an average TVR of 2.1. We also expect families to tune in besides males. That is because the soccer World Cup cuts across TGs,” he says.

    ESS‘ bullishness is shared by a Nielsen study. According to it, eight out of 10 Indians surveyed would follow the event live on television.

    While the ratings during Fifa World Cup in terms of absolute numbers may not go up by a lot, the sheer increase in the base will see larger audiences coming into the game. There has been a lot of coverage especially in newspapers which will drive people to ESS.

    Venkateish is confident that the boost in viewership for the soccer World Cup will have a positive carry over effect to other soccer events as well like the EPL once the World Cup gets over.

    TV companies get cracking: With the sporting extravaganza being on HD, television manufacturers are looking at boosting their sales of premium products. Brands like Samsung and LG who have a global exposure to the football platform through multiple fronts will be most active.

    Analysts say television sales could grow in the region of 15 per cent as consumers prefer to upgrade to better and bigger sets. In the key markets of West Bengal, Goa and Kerala sales can actually double.

    Sony Electronics, which is a Fifa partner, will focus on launching a full range of Bravia Full HD and LED 3D TVs. The 3D push is being done as it gives the consumer a new way of looking at soccer.

    Says Sony India MD Masaru Tamagawa, “We are focussing on the soccer crazy Kerala and West Bengal. We have introduced consumer promotions in West Bengal and Kerala wherein on purchase of every Bravia LCD TV above 26 inches, the consumer shall also be a recipient of Official Fifa Football replica. Our aim is to sell around 30,000 units in West Bengal region and around 10,000 units in Kerala.”

    Haier, meanwhile, has launched their Soccer Scheme in the form of the Haier ‘Free Kick offer‘. Haier India president Eric Braganza says that this is a scratch card scheme where on purchase of any LED/ LCD TV above 81 cms (except 32S9), a customer can win 100 per cent cash back or an Adidas track jacket with an autograph from its brand ambassador John Abraham, worth Rs 2290. In terms of new products, Haier has launched a range of 117 cm inch Full HD LED backlit TVs and 140 cm LCDs.

    Panasonic India is targeting a sales turnover of Rs 750 million from Kerala, West Bengal and Goa during the event. Panasonic‘s marketing manager sports and eco products Kunal Dua points out that the company, which is the primary sponsor of the Indian football team, has kicked off road shows to promote its products during the World Cup in Kochi, Kolkata and Goa.

    “Panasonic has introduced a unique ‘Panasonic Soccer Mania 2010‘ offer on their range of ‘Viera‘ Plasma TV and LCD TVs where the customers can get assured gifts. The aim is to maximise the wave of excitement and joy during the football seasons,” he says.

    The Merchandise Scene: On the merchandise front, adidas, Nike and Puma will be active.

    adidas will supply outfit and gear to 12 teams including Spain, Argentina, Germany and France while Nike is working with nine teams and Puma with six. adidas, in fact, is sponsoring the teams that play the opening match – Mexico and South Africa. These companies leverage on the iconic status of some of the footballers. It is likely that the winner of the event will be wearing gear from one of these companies.

    Nike is cashing in on Ronaldo as part of their ‘Write The Future‘ campaign. The company will benefit in a big way if Brazil win. Puma is outfitting defending champions Italy. Adidas, meanwhile, focussed on a three-city selection event in New Delhi, Mumbai and Chandigarh to select six students. They will be the official ‘adidas Fifa Fair Play Flag Bearer‘ at the 2010 Fifa World Cup in South Africa.

    More recently in Johannesburg, adidas launched The Quest with its interactive Fifa World Cup football campaign. Kicking off with a star-studded film, created in the style of a movie trailer, The Quest challenges fans from all over the world to sign up to a multi-platform digital innovation. Highlights include a Live Graphic Novel that combines live action and animation in an interactive experience that reacts as the tournament unfolds.

    Online marketplace eBay will be having some official Fifa Merchandise listed on eBay India from adidas which will be promoted on eBay. An eBay spokesperson says that this will mark the first time that eBay is promoting Fifa merchandise in India. The issue though is whether this entire buzz will translate into strong retail sales for jerseys, boots etc.

    adidas India MD Andreas Gellner says that he expects sales to multiply.

    Relay Worldwide India GM Mahesh Ranka, though, notes that companies need to get their price points right. “The fact that a jersey costs a few thousands of rupees means that a large section of fans are excluded. While merchandise will sell, it may not be significant. Also, the consumer today is very value conscious. He wants RoI on every rupee spent. Also, consumers are still facing difficult economic conditions due to inflation, home loan rates etc. Therefore, spending could be more discretionary compared with 2007 and 2008.”

    He also notes that Indians still have to grow in the merchandise realm. “We are happy following the sport, speaking and debating about it and probably have an expert comment or two. But when it comes to spending the greenbacks for the team, there has to be a good reason to do so, and for better value to prevail. Having said that, the EPL teams‘ Jerseys have sold in decent numbers – especially the bigger clubs like Man U and Chelsea.”

    Interestingly, DVDs around the event are not expected to fare as well. Collectibles are still to grow but a start should be made.

    As far as retail stores are concerned, Shoppers Stop and Landmark are rolling out Fifa-licensed merchandise. While Shoppers Stop and adidas are selling the official casual wear range, Landmark is focussing on non-apparel merchandise.

    Ranka adds that while the mood in the market is much better compared to 2006, it hasn‘t translated much in terms of marketing spends by companies. The economy has come around a full circle in last two years and even now people are being cautious of spending money on marketing.

    What is good for companies, though, is that there is more awareness about soccer. This has grown over the past four years with all the sports channels pushing it. In addition, the number of foot-balling icons has grown and the competition this time is more open. There are more than the usual two or three suspects. So the reach for the event will be much more compared to 2006.

    According to a recent study, Manchester United has close to 13 million fans in India, while Chelsea has close to nine million fans.

    In South Africa, meanwhile, the rush for merchandise related to the event is high. But there is a lot of counterfeit merchandise that is also being sold which is hurting the manufacturing industry. Fifa‘s official World Cup suppliers are losing thousands of dollars.

    Gaming: Another product category that will benefit is gaming. Zapak, for instance, expects millions of game plays for Power Soccer which is its MMOG launched last year.

    7Seas Technologies will launch two games, Soccer Ball and Soccer Tournament, to coincide with the event. Indiagames is distributing Electronic Arts‘ Fifa game on its portal and will also be doing activities with telecom operators to push the game.

    Says Indiagames COO Samir Bhangara, “Soccer games will see thrice as much activity during the one-month period that the World Cup is on. After that it will reduce to an extent but interest will still be there.”

    Globally, it is expected that 10 per cent of Internet users will play soccer related games.

    A sponsorship windfall for Fifa: The IEG Sponsorship Report says that the tournament has generated $1.6 billion between 2007 and 2010 as opposed to $584 million between 1999 and 2002.

    Fifa had introduced a three-tier sponsorship system with the levels being Fifa Partners, Fifa World Cup Sponsors and National Supporters. Partners received exclusive marketing assets and international rights to various Fifa activities including the World Cup and other competitions. FIFA‘s six partners are adidas, Coca-Cola, Emirates Airlines, Hyundai-Kia, Sony and Visa and they pay between $ 24 to 44 million every year.

    The eight companies, Anheuser-Busch InBev‘s Budweiser, BP Castrol, Continental tires, McDonald‘s, MTN, Mahindra Satyam, Seara and Yingli Solar, are at the World Cup Sponsor level and pay anywhere from $10 – $25 million in annual fees. These companies have acquired the rights to the event at a worldwide level and they also have chosen marketing assets, secondary media exposure and the assurance of category exclusivity.

    In India, in terms of Fifa‘s partners, one of the companies that is being aggressive is Castrol. In fact, the campaign is its largest ever consumer promotion activity being carried out in India. As part of its promotional activity, Castrol has a contest. It will fly 50 winners along with its brand ambassador John Abraham for World Cup matches.

    Another company that will have a big presence at the Fifa World Cup is Mahindra Satyam which is the IT services provider. To manage ticketing, accreditation, transport, materials management and overall event management, Fifa employees will be using a software solution developed by Mahindra Satyam.

    Team Valuations: The Spanish team is the most valuable with an estimated value of 565 million euros, according to Euromericas Sport Marketing and Gerardo Molina and Associates.

    Number two is Brazil, with an estimated value of 515 million euros. France is third, with an estimated value of 450 million euros, followed by England which is worth 440 million euros.

    The rankings calculate the market worth in terms of economic rights, or contract value, of the 25 players who have played most frequently for their teams during the qualifying round of the World Cup.

  • IAA World Congress: Go digital, focus on new media

    The much talked about 42nd IAA World Congress has come and gone and given many an opportunity to visit Russia, which is generally not on anybody’s tourist map. I am sure all delegates are reasonably happy that they made it to the Congress, whether it was for the Congress speaker presentations or the venue Russia or the opportunity to meet with advertising big wigs from around the world.

    India, made its presence felt at this Congress with 47 delegates, three speakers – Vinita Bali of Britannia, K Srinivas of Bharti Airtel and Sam Balsara of Madison World; and bagging the 2010 IAA Chapter Excellence Award.

    When one visits a new country, in your flight, you replay the impressions you have about the country – so images of the biting cold, vodka and a language that you can‘t understand a word of came to my mind. But on stepping out of the Moscow airport, the heat and the sun gave us a not so pleasant surprise. Since the Conference was in the Kremlin, I was kind of expecting to bump into Putin, but that was another disappointment.

    But, let’s talk about advertising first. The Congress’s 38 speakers were to talk to over a thousand delegates from all over the world about the Consequences of Change taking place all around us.

    If I have to sum up what industry stalwarts like Sir Martin Sorrell, Mark Pritchard, Maurice Levy and other prominent speakers had to say, I would say I have four broad take aways that all speakers touched upon in their presentations:

    Go Digital and focus on new media

    Add value to consumers

    Increase consumer base and compete against non consumption

    Use CSR as a business tool

    Now going into details of what some of the speakers said, Sir Martin Sorrell gave a good overview of the advertising and marketing industry at large. He seemed upbeat about the emerging climate as reflected in WPP figures that he had seen days before the conference.

    He spoke about WPP’s strategy of focusing on BRIC markets, new media and digital, and consumer insights. He highlighted eight trends that he had observed or prophesised about and said because of this the advertising and marketing industry was poised to play a more critical role in the near future:

    Shift in economic power from West to East and North to South.

    Overcapacity in the world and therefore a need for differentiation.

    Growth and importance of digital companies. He cited the example of Google being the biggest media owner in the UK.

    Growth in retail.

    Internal communication and the challenge of getting people to work together.

    Shift in coordination from global to local.

    Importance of CSR and the use of CSR not for a social cause but more to meet a business purpose or goal.

    The Government in all markets is becoming extremely important and influential and a huge spender on advertising.

      

    India‘s Kaushik Roy at the Congress in Moscow
    		  Mark Pritchard, the global marketing   and     brand building officer at Procter and Gamble made a pitch for brands to move from marketing to serving a purpose. He also touched upon why a brand exists (what is its purpose or soul); what does the brand stand for (its benefits or its heart); and how is the brand expressed (its execution or body). To make his point come alive, Mark shared some examples of the work they did on Pampers in Russia, based on the insight that when babies sleep well at night,they are 

    active and grow up healthier; PUR, a campaign for clean water in Africa and from our very own India, the famous Gillette – Shave or Not to Shave campaign. No international conference can now be complete without the mention of this campaign! Divya, please take a bow. He also emphasized on the fact that when an organization does all these things, it boosts employee morale.

    Eric Joachimsthaler, spoke very passionately on Challenger Brands. He emphasized that organisations should forget about Disruption and focus on Deep Dive. The key difference between Disruption and Deep Dive being, in Disruption companies would focus on optimizing their own value chain, focus on market sharing and competing against the next competitor. While in Deep Dive the focus is on optimizing your consumer’s value chain, focus on market creation and competing against non consumption.

    He made his viewpoint come alive by giving the example of Flip, a video camera that could upload photos immediately on Facebook in six seconds and achieved 34 per cent market share in US in three years, because of understanding and capitalising on the need gap in the market. He also emphasized on the need for 365 day Communication and not 360 degree communication and the need to create social currency. Whilst Sir Martin spoke about the need for differentiation because of overcapacity, Eric felt it was no longer possible to differentiate your product in today’s fully wired and instant world.

    Vinita Bali was eloquent and said that challenger brands usually have less resources, so they employ sharper strategies, act faster and make better use of scarce resources and these are the qualities necessary for challenger brands to survive.

    The panel discussion on Media Opportunities in the BRIC markets, had Sam Balsara, representing India and the Panel spoke about how the only way to make the advertising business grow was to make the client’s business grow and aggressive use of new media and a better understanding of new media by agencies would help the cause.

    Microsoft and 20th Century Fox made a joint presentation on how they promoted and marketed the biggest animated film of the year Avaatar, highlighting that when two giants tango together you can get delightfully surprising results.

    Day 2 had Maurice Levy open the Congress and he spoke about companies‘ need to take their responsibility to society seriously and that they will be rewarded for doing that.

    Rich Riley from Yahoo spoke about taking the online platform to the next level and how Creative and Media agencies could use digital to engage with consumers in a meaningful way.

    Another interesting panel discussion was on The Advertising Agency Model which had representation from Group M, Publicis Groupe and Joanne Davis Consulting. The panel highlighted the lack of communication between clients and agencies, and groaned about the growing influence and power of procurement managers in agency-client relationships.

    Nikesh Arora from Google, highlighted that 26 per cent of the world’s population is online and 24 hours of video is uploaded every minute on YouTube. He also said that the internet provides instant feedback, interactivity with advertisers, a borderless world and gives a notion of mass personalisation. He emphasised that the last 10 global brands have all been built online – Google, Facebook, YouTube, etc.

    Another interesting presentation was from K Srinivas of Airtel, where he took the audience through the miraculous Airtel story of how it became the No. 1 telecom service provider in India through an innovative business model, focussing on outsourcing of core functions to overcome shortage of resources, but investing heavily on the brand.

    IAA also had a special package for their Young Professional Members, which gave them an opportunity to be part of the Congress at a fraction of the regular delegate fee. 16 youngsters from around the world, including me took advantage of this offer, including five from India.

    The evening entertainment organised by the IAA World Congress organisers gave the delegates a good flavour of Russian customs, from a gala dinner at The Kremlin Palace Congress Centre Rooftop Ballroom, to the Bolshoi Ballet. After the gala dinner, there was an after party on the roof top of the Ritz Carlton, at a Lounge called O2. Reminded me of our AER Bar at Four Seasons; O2 lounge gave an aerial view of the Kremlin and the Moscow skyline by night.

    Moscow as a city is similar to Delhi in winter in some ways – very wide roads, majestic buildings and flowers (tulips no less). But despite the wide road, the traffic and the traffic jams make you wonder if you are still in Bombay! With the onset of spring, the lush green gardens and flowers were in full bloom, the warm weather also got most of Moscowites out on the streets, enjoying the warmth, making walking on the streets, a delight.

    Quite a lot of Indian delegates were fortunate to bump into Indian taxi drivers from South India, most of whom came to Moscow 10 – 12 years ago to study medicine and because of circumstance landed up doing all sorts of businesses except medicine. They proved to be good tourist guides for us for both Moscow and St Petersburg city to show its historic sights. St Petersburg is another must see city, a one-hour flight from Moscow. The city again is very historic with many parts in the city looking a lot like Rome, but on a bigger scale.

    Russia as we all know is famous for its vodka, but what many don’t know is how a Russian has his vodka. Chilled vodka is poured into a short glass and right next to it comes another glass of orange or tomato juice. Instead of mixing the two together, like many of us do, they first take a gulp of the vodka followed by the juice. And by the way Russian girls don’t drink vodka.

    So on the whole, the 42nd IAA World Congress provided delegates a good overview of the state of advertising in the world today and gave me an opportunity to tick off Russia from the 100-places-to see-before-you-die list.

     

    (The author is Madison World Business Development & Diversification Manager)