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  • Advertisers vs Broadcasters: The battle for weekly TV ratings

    Advertisers vs Broadcasters: The battle for weekly TV ratings

    Aegis Group plc chairman India & CEO South East Asia Ashish Bhasin does not mince his words when he says. "In the next 24 to 48 hours many broadcasters are going to be getting cancellation notices from advertisers for spots booked with them. I have been getting SMSes from some of my key advertisers to move ahead with pulling off ads from TV."

    Adds Group M South Asia CEO & Advertising Agencies Association of India (AAAI) executive committee member C.V.L Srinivas: "Starting yesterday, cancellation notices have been going to broadcasters from advertising clients across the board."

    "Earlier broadcasters took the decision and now advertisers are doing so," adds IPG Media Brands CEO Shashi Sinha.

    The CEO of a channel confirmed that his network had received emails concerning 10-11 clients. "They have given us 72 hours to resolve the issue. If we fail to revert to weekly ratings all release orders for TV spots will stand cancelled," he says.

    That is the state of Indian media today. A battle royale is brewing – some call it the mother of all battles. The two warring parties – on one side of the battle line are the advertisers, and on the other are the seven broadcast TV networks.

    Group M's CVL Srinivas says advertisers will stay away from TV until they get proper weekly viewership data

    The decision Sinha is referring to relates to these broadcasters unilaterally ordering TV ratings agency TAM Media to change the frequency of reporting on their viewership from a weekly routine to a monthly routine. And to also report those details in absolute numbers, not in percentages.

    The seven broadcast networks have more than 100 channels under their umbrella, accounting for almost 50 per cent of daily TV viewing in India.

    Advertisers on the other hand have a war chest of Rs 14,000 crore which they pump into TV channels annually to promote their products and services to TV viewers who are their consumers. And almost 60-70 per cent of that goes into those seven broadcast networks.

    "I don‘t know see why there should be a need for anyone to have a confrontation at this time," expresses Bhasin.

    Aegis Group‘s Ashish Bhasin says advertisers would prefer to put money in the bank then advertise in this situation

    In fact, the broadcast industry has been increasingly flexing its muscles in recent times. While they are competing for viewership with each other daily, they have over the past four or five years increasingly bonded together, finding common cause on issues which are plaguing them. Whether it was on the cable TV carriage fee burden or self-regulation or digitisation, the broadcasters have stood united and lobbied hard to get their views heard and get decisions taken in their favour.

    One of the issues with the ad industry was the gross billing issue. This had been a practice for decades followed by ad agencies, and broadcasters for TV spots carried on them. The broadcasters – led by their association the Indian Broadcasting Foundation (IBF)- wanted the practice to be changed to net bills when the income tax department got after them to pay tax for ad agency commission (which was not being paid by them actually but was only mentioned in the bill). Ad agencies – AAAI – resisted this change even though the IBF continually urged them to do so.

    IPG Media CEO Shashi Sinha says advertisers are now taking their decision

    The IBF then put its foot down and said its broadcaster members would pull out all TV spots from TV channels. Ad agency resistance continued for a couple of days before it melted and agencies, the Indian Society of Advertisers (ISA) and the IBF hammered out a solution, which saw net billings becoming the practice, albeit with a legend of 15 per cent commission attached. To media observers, it clearly showed who had the power – broadcasters.

    "Agreed that broadcasters had their way in the net billings case because it related to a routine mechanical exercise which did not impact advertisers. It only concerned agencies and broadcasters," explains Bhasin. "But this time it is the advertisers themselves who are being impacted."

    Adds Srinivas: "And advertisers are saying, we will not advertise on those channels for which we don‘t have data. We as their agencies cannot plan on a monthly basis without data and hence are complying with our clients."

    Madison Media COO Karthik Laxminarayan cautions that aggression is not a solution

    "The key thing is that these days advertising comes in bursts of four to six weeks," points out Bhasin. "And if reporting is going to come after the period is over, how will advertisers monitor how their communication is faring with TV viewers? The world is moving to real time reporting of viewing habits. The advertiser has a right to know how the money he is spending is faring and whether it is getting him results. With the monthly reporting, it will not be efficient."

    "India and Vietnam are the only two nations which don‘t have a daily ratings system," adds Srinivas. "And now we are talking about going monthly. It is a retrograde step and it has been pushed through without any logic."

    Bhasin points out this time the broadcasters are a divided lot too. "While these seven broadcast networks are demanding monthly reporting and monitoring, the others are still going with weekly reports," he says. "How can you have two sets of practices in the same sector?"

    Vivkai Exchange CEO Mona Jain: Advertisers will blink first

    But the fact that the broadcasting industry is divided is going to work in the advertisers favour. "I don‘t know why there is this misconception that we cannot do without these 100 channels," says Srinivas. "This is a myth. We can do good media plans and reach our customers even without these channels. There are another 200 channels we can use. And they have said they are more than willing to do deals with us. DD could be a good option."

    He also believes that advertisers are going to start putting their money into other media outlets like below the line, print, and digital. "The floodgates are going to open for digital advertising. We have seen so many clients talking about using digital media over the past month ever since the TAM issue has broken out. And over the past 24 hours two clients have totally shifted from TV – one to a print plan and the other to a digital one. Agreed one of them is a niche player, but the advertising mindset is changing."

    Agrees Sinha: " What are the alternatives left for advertisers? Some might go to print, some might stay away or some might even come back to TV, no one knows what will happen until and unless both parties talk it out."

    Havas Media MD Mohit Joshi says it is a lose-lose situation for all

    Bhasin believes advertisers might also choose to totally do without advertising and straightaway add the money saved to their bottom lines "And in this tough economic times, it is better to have cash in the bank then spend it," he says.

    "It‘s true," points out Srinivas. "Advertisers would rather not advertise than advertise without any data. One or two months without advertising is not going to break any brands. There are even more efficient ways to reach customers than TV."

    What has left most media professionals confused is the hard stance taken by broadcasters. "I agree there could be genuine problems with TAM. But how is 30 days for reporting ratings better than weekly ratings when the data is not trusted by them? There is no logic to the broadcasters‘ stance. This is not a banana republic where you turn things on and off as it suits you," says Srinivas.

    ISA media committe head Hemant Bakshi will be playing a key role

    The question on the top of everyone‘s minds is: who is going to blink first and how long will the difference of opinion continue between broadcasters and advertisers? According to Bhasin, the basics of any business is "the client is always right. I think, within a week, better sense should prevail and things should get sorted out."

    Srinivas is not willing to speculate on the time period but says advertisers will stay off the TV channels until they start getting the weekly data they seek.

    "Obviously advertisers will blink first. Where will they get such a mass reaching medium," says a TV channel CEO. "They came running back to us on the third day during the net billings crisis when we blocked them out for two days."

    Vivaki Exchange CEO Mona Jain believes that "there will be some kind of a push back wherein it will be the advertisers who will have to compromise."

    Lulla says it is a private matter between broadcasters and advertisers

    Others highlight that the combative attitude should give way to finding solutions. "We, as an industry, should not think aggressively but progressively; and try to resolve it by having a healthy discussion," expresses Madison Media COO Karthik Laxminarayan.

    Havas Media India MD Mohit Joshi says that on a personal level, "I am sad that all of us together are not able to find a solution. All such issues are in a lose-lose domain. Nobody is actually going to gain. Broadcasters could end up losing revenue."

    Indiantelevision.com got in touch with ISA media committee chairman Hemant Bakshi to get the advertiser perspective and he said he would prefer not to at this stage.

    Ditto with broadcasters. Indiantelevision.com got in touch with Star India CEO Uday Shankar, Viacom18‘s Sudanshu Vats, Times Television Network CEO Sunil Lulla for their views. All of them refused to get into any discussion. "This is not a matter for public scrutiny. It is a private matter which has to be resolved between broadcasters and advertisers," says Lulla.

    For their individual sakes, hopefully they will do so soon.

  • AAAI’s Sharma: “Use BARC to improve TAM now”

    AAAI’s Sharma: “Use BARC to improve TAM now”

    MUMBAI: Even as the day saw a couple of more notices to unsubscribe from TAM‘s TV ratings. The Advertising Agencies Association of India (AAAI) president Arvind Sharma proffered what could be the way out of the TV ratings crisis the industry is currently grappling with.

    “I understand broadcasters have shown a lot of dissatisfaction with TAM,” he said speaking to indiantelevision.com. Let us address the problems that they are having with TAM to a body which is mandated to do TV ratings in India going forward – that is the Broadcast Audience Research Council (BARC). It is an existing body with a CEO and a chairman. It has a strong technical committee and has representation from the IBF, the AAAI and the ISA.”

    Sharma highlighted that three constituents – advertisers, broadcasters and agencies – should filter down the various problems broadcasters are having with TAM to three or four issues of broad priority first.

    “The collective technical and business leadership of the industry under BARC will definitely find solutions. After all, BARC has developed an expertise and overview of what‘s happening in the world in terms of technology, methodology and what have you. They have gone through various requests for information. They are up to date,” Sharma said.

    And what about broadcasters‘ complaints that TAM has not paid heed and addressed their problems in the past? “Any player will listen to collective direction that is given in the interest of industry and business,” pointed out Sharma.

    Sharma once again reiterated that there is no question of a ratings blackout scenario becoming a reality in the industry. “We are reaching out to other BARC directors and other players,” he said. “I am optimistic that a solution is going to be found sooner before a situation of a total TV ratings blackout arises.”

    Are advertisers and broadcasters going to toe the same line?

    Watch this space for further developments!

  • Indian TV B’casters: ‘TAM’ing TV ratings

    Indian TV B’casters: ‘TAM’ing TV ratings

     Does the Indian TV broadcast industry want TAM? In one word, the answer is No. Definitely not in the form and manner it is monitoring TV viewership in India. Definitely not the kind of viewership numbers it has been spewing out for them week by week. The major Indian TV broadcast networks have already shown their utter disgust and disregard for its TV ratings by closing their checkbooks on TAM.

    On almost every front, the Indian TV broadcasters – through the IBF – have been flexing their muscles and showing that they mean business. And they have been sorting out troublesome issues: like striking a wage accord with TV industry technicians; setting set up a self-regulatory mechanism when government wanted to muzzle the media; getting the advertising industry to agree to net billing after the government demanded taxes for the gross advertising agency bills it used to make payments on.

    But one of the most vexatious issues it has been grappling with is the TV rating‘s one. And now that the lights have been put out on TAM, what now for the broadcast industry? What are the options before it? Let us take a look at a couple of them:

    *For one they can continue with TAM Media. However, they can give TV ratings a hiatus for a couple of months. It‘s quite possible the chaos that is happening on account of analogue shutoffs and digital set top box switch-ons, will settle down and the ratings will stabilise in that period. They can also dialogue with TAM and ask it to get back to basics and do an establishment survey once again (if possible), represent the peoplemeters appropriately in power-lit areas in LC1, rather than in power-dark areas. And finally, take a closer look at the entire process of churning out ratings that happens every week, through a committee constituted for the very purpose.

    There is a possibility that we could end up with a period of no TV ratings in India if issues are not sorted out by all concerned. How long that period will be is not clear (some say it could be until BARC comes up), but broadcasters will need to get advertisers and agencies’ support for their decision. So far, both have said they are not comfortable with ratings going away, and have spoken up for TAM.
    _____****_____

     

    With all major B‘casters unsubscribing from TAM TV ratings, only time will tell if the viewers‘ true choice can be reflected with the emergence of BARC

    * Or if this is not working out forget that TAM exists, cut off its blood supply, and watch it gradually bleed and die. Come up with a viewership metric that works in the interim for all concerned – broadcasters, advertisers and agencies – and allows the business of communicating brand messages through television for a fee to continue.

    The broadcast industry is torn between the two options. The first has been done before between October and December 2012 and it was painless for all concerned and allowed TAM to continue its existence in a profitable manner. 

    The second option, while it appears the easier one to see through, comes with its set of challenges.

    The Broadcast Audience Research Council (BARC)‘s TV ratings system seems nearly a year away and could take longer to get to the levels of coverage TAM is providing now. Unless, under the leadership of Puneet Goenka and Partho Dasgupta, BARC manages to do an Ambani on the system and get the establishment survey, the constitution of the sample, the installation of the meters, the development of the software, the stabilisation of the findings and everything down stream thereof completed in super record time. Most advertisers and agencies have been optimistic about BARC.

    Industry can learn some lessons from the experience of Turkey in 2011. Turkey‘s broadcasters and the industry shut down the ratings service run there by AGB Nielsen in late December 2011, amidst allegations of corruption, which were denied by the ratings service provider. The industry body – The Television Audience Research Committee (TIAK) – prematurely severed its contract with AGB and urged TNS – part of the WPP Group‘s Kantar Research – to set up an alternative ratings system which finally got going in May 2012 with a 1000 peoplemeter panel, as against 2,500 people meters earlier.

    Industry can learn some lessons from the experience of Turkey which faced a ratings blackout in 2011. During the blackout TV ad rates and prices were determined by using average ratings from the month before the shutdown, combined with monthly share performance from the whole of the year.
    _____****_____

    In the interim, adage.com reported in March 2012 that life went on for Turkish advertisers, agencies and broadcasters though the “TV-buying system has since been in shambles. Without reliable new-audience measurement data, prices have been determined by using average ratings from the month before the scandal erupted, combined with monthly share performance from the whole of 2011. The industry is working to regain media agencies‘ and advertisers‘ trust.”

    Agreed, we are not questioning the ethics of TAM in India, though many have hurled allegations against it. There is a possibility that we could end up with a period of no TV ratings in India if issues are not sorted out by all concerned.

    How long that period will be is not clear (some say it could be until BARC comes up), but broadcasters will need to get advertisers and agencies‘ support for their decision. So far, both have said they are not comfortable with ratings going away, and have spoken up for TAM.

    With reason. Two or three months without TAM mean they will have little data to support a TV advertising expenditure between Rs 3,600-4,200 crore. That‘s not an amount you can sniff away.

    Hence, all three will have to come to the table and agree on a performance metric to justify the expenditure and offer some accountability. Could the Turkish media industry‘s interim solution during the TV ratings shutdown there be adapted to work in India?

    Broadcasters are slated to huddle very soon (either this week or next) to get some consensus on which route they will take. Some broadcast CEOs have been travelling and hence have not been able to get together.

     

  • CSK & RCB have the most loyal fan base across IPL teams: Ormax Trac20

    CSK & RCB have the most loyal fan base across IPL teams: Ormax Trac20

    Mumbai: A sizeable and loyal fan base is critical to the business plans of any sporting club or franchise. According to the findings of Ormax Trac20, a syndicated research being conducted by Ormax Media during the sixth edition of IPL, Chennai Super Kings (CSK) and Royal Challengers Bangalore (RCB) have the most sizeable base of loyal fans in their respective markets, given them an advantage over the other teams in the league.

    While CSK led the loyalty chart even in the pre-phase of the research conducted before the IPL started in March, RCB have shown a significant increase in their loyalty score during this edition of the tournament. Kolkata Knight Riders are a close no. 3, followed by Mumbai Indians at no. 4.

    Commenting on the results, Shailesh Kapoor, CEO – Ormax Media, said: "Team loyalty is important for advertisers, as sponsoring a team that has a higher loyal fan base will lead to a higher marketing ROI. In our understanding, three factors contribute to team loyalty: consistency of performance, star players and team stability over years. CSK have a huge advantage across these three factors."

    The Ormax Trac20 research is being conducted across 11 cities, in three phases, with a total sample size of 9,000. The research is targeted at advertisers considering IPL or cricket in their marketing plans. The research is tracking the performance of the various brands advertising during this year's IPL, both in terms of recall and effectiveness.

  • Global Advertisers opens 4 regional divisions

    Global Advertisers opens 4 regional divisions

    Mumbai: Global Advertisers has introduced four new divisions of sales department based on regions: North, South, East and West.

    The dedicated team assigned for these divisions aims to provide best and attractive deals to their clients.The initiative will also help the existing clients of Global Advertisers in tapping new customers base for their brands.

    Global Advertisers MD Sanjeev Gupta said, “The current economic scenario suggest that brands will further cut down their marketing budget as they have multiple cost-effective advertising options to reach out to their customers. So, being one of the most cost effective medium, outdoor advertising will always be an important part of the integrated marketing plan.”

    “By venturing into new market we expect to see significant change in our clientele. Our expansion proves our strength, ability to take up new challenges and shows that there are no boundaries for an achiever,” he added.

  • AAAI version of net billing resolution with IBF

    AAAI version of net billing resolution with IBF

    MUMBAI: Broadcasters, facing tax liabilities on account of non-deduction of TDS on agency commission, had stopped airing ads. This was because advertising agencies did not agree to their proposal to move to net billing. AAAI continues to maintain that the tax demands made on some broadcasters are bad in law. It has committed that it will attempt to get a circular from CBDT.

    A circular that clarifies that broadcasters like other media are not required to deduct TDS from agency commission since broadcasters do not pay the agency commission.

    In a meeting that lasted over seven hours, representatives from IBF and AAAI last night arrived at an elegant solution that meets the needs of broadcasters and at the same time assures agencies of their legitimate earnings.

    As a result, advertisers‘ ads will be back on air starting May 3rd.

    Says Arvind Sharma, President AAAI, “We are happy that we have resolved the impasse. Advertisers‘ spots will be back on air starting today. We ensured that both broadcasters‘ and agencies‘ business interests are protected. We are happy that the solution we have found will meet the needs of our member agencies in terms of their transactions with their clients.”

  • CTM partners BehindTheMoon Consultants for client servicing

    CTM partners BehindTheMoon Consultants for client servicing

    MUMBAI: Delhi-based Creative Think Media (CTM) Group has entered into a strategic alliance with the brand consulting boutique firm BehindTheMoon Consultants for brand advisory to its selected clients.

    BehindTheMoon chief associate Zaara Khader said, “Advertisers in the SME sector need our kind of consulting services the most since they work on stringent budgets but hesitate on coming to independent consultants such as us as they feel this will tax their already tight budgets or even due to paucity of information. CTM has got us on board for a host of their clients and we respect that ingenuity immensely.”
     
    BehindTheMoon offers strategic consulting on matters of brand development and has developed a filter where every initiative of the brand including all communication strategies is processed through it.

    CTM select clients so that higher efficiencies are achieved in advertising and the clients not only get more for their advertising buck but also build formidable brands.

  • Advertisers should continually reinvent

    Advertisers should continually reinvent

    NEW DELHI: In a world of so many choices, it is important for advertisers and corporates to continually reinvent ideas to reach out to the new generation, and also use social media through the Internet for this purpose.

    This was the general consensus at the 27th AdAsia held in India after a period of eight years and attended by over 1200 delegates from India and 25 countries.

    On the concluding day, Pepsico chairman and CEO Indra Nooyi cautioned those in the advertising and marketing business that the uncertainties in the corporate world could only be overcome if one could adapt suitably to face the future.

    She said that the corporate world today faced a crisis of leadership, of governance, and of expectations.

    The corporate leaders therefore have to lead for ‘today and tomorrow at the same time‘ – that is, keep an eye on the horizon even as one planned for the present. Similarly, one has to be ambitious, attract and tap the right talent and make sure that it stayed with you, and the leaders have to be ‘super visible‘ – they should be available to all their employees and not sit in ivory towers and give orders.

    She said creativity and adaptability are the answers to uncertainty, and referred to working in an atmosphere of connective autonomy.
     
    Referring to her own brand, she said that the way to sell globally is to innovate and so while Lays is a popular Pepsico brand, it is marketed in different countries with local flavours.

    Nooyi was addressing the concluding session of AdAsia 2011.

    Talking about the theme – “Uncertainty: The New Certainty” – Mudra Group MD and Group CEO and AdAsia 2011 chairman Madhukar kamath said that it underlines the dynamic world that is currently at an inflection point witnessing a realignment of global economic leadership. Post the global meltdown, Asia leads the world on the path of recovery, thus attracting attention from the world over.

    Earlier, Saatchi and Saatchi creative chairman Robert Senior said there have to be certain change in strategy to be in the advertising and marketing business in ‘the age of now‘. Thus, attention had to be substituted by participation, inform by inspire, interpretation with interaction, return on investment with return on involvement, and pumping markets with creating movements.

    Speaking on the pursuit of Big Ideas in the Age of Now, he said the consumer today lives in a VUCA world: he is volatile, uncertain, complex, and ambiguous. The advertiser has to change that attitude to being vibrant, unreal, crazy and astounding.

    Noting that ideas can be the prism of hope, he said the real skill lay in seeing the point in an idea and then nurturing it with speed, agility, and news desk mentality.

    He said at the outset that he is particularly impressed by the optimism among the advertising fraternity in India, as compared to Europe. The advertisers know what their consumers expected from them.

    In another session where he interacted with lyricist and McCann Worldgroup India‘s chairman and CEO Prasoon Joshi, Coca Cola Company EVP and chief marketing and commercial officer Joseph Tripodi said large companies tend to be very conservative and often do not take risks. In his company, he has encouraged a policy where one would put 70 per cent of his money where he know it would pay, 20 per cent to innovate off that 70 per cent, and 10 per cent just innovate with new ideas. Thus, it would not matter too much if that 10 per cent failed.

    There is also need to take some risk and take some challenges, part of which is trying to create popular culture.

    He said it is important to understand the brand and create love for it. Coca Cola did this with the help of inspirational and operational marketers.
     
    He said the aim was to create both love and value for the brand as well as the product. Consumers demanded value for their time and attention and wanted entertainment, and portability. For all this, evolution was mandatory.

    For his brand, he said the focus was on storytelling and there has been a link with the liquid being sold.

    Furthermore, he said in reply to a question that value for him meant shared dividends and this was the reason for Coca Cola to endorse causes. He gave several examples of how this had been done by showing short film clips. There is need to market certain global values as commonalities are growing all over the world with ‘Internet being the great democratiser‘ which made everything ‘glocal‘. People like to connect with each other and therefore Coke has also used the social media for this purpose since it is a natural human behaviour to share.

    But it was necessary to earn the trust of the local people. One cannot let the hype get ahead of the reality and therefore the nature of Corporate Social Responsibility has changed with the non-governmental organisations not just wanting cheques. They want commitment and not mere promises, and wanted that the corporate house should be transparent. Therefore one has to work to earn the trust of the consumer and the NGO.

    Answering a question, he said that flavour extensions in Coke were only aimed at catering to local populations.

    In a session on how to navigate through in the face of media fragmentation, Citi Head of Global Marketing (Consumer) Bob O‘Leary said new technologies demand new choices and new behaviours and it is important to rise to the occasion.

    OMD Worldwide CMD Mainardo de Nardis said it is necessary to capture the imagination of the people through the right beliefs.

    Maxus Worldwide CEO Kelly Clark said that it is important to keep creative talent motivated and challenged, and excited about their work. People can be brought in from various fields but have to be kept in the company by appreciating the impact of their work.

    The importance of reinventing oneself was driven home again in a discussion on building brands in a trust deficit world. All the speakers stressed the need to be able convince the people about brands.

    Moderating the session, author Deepa Prahlad said technology is changing everything and affecting the metaphors of brand marketing. Therefore advertisers and brands have to change.

    Engine and WCRS President Robin Wight was clear that brands were created to avoid too much of brain work by the consumer who should be able to recognise what he wanted by seeing a brand. The decline in trust is because the consumer often did not want to use brain power. The Internet and social interactions could help to rebuild that trust, he said. Peer-to-peer marketing through social networking is a great tool, he said.

    Bharti AXA Life Insurance CEO Sandeep Ghosh said people expect proof rather than promises, and showed two commercials of his company to prove this point. But leadership also matter, he added.

    Ford India president and managing director Michael Boneham said one has to re-invent brands to separate oneself from competitors. For example, he said his cars have added features like a Bluetooth to become different. He also believed in consumers talking to consumers and therefore his company has avoided brand ambassadors.

    GroupM CEO South Asia Vikram Sakhuja said a major problem is that with too many choices, one live in an attention deficit world. Therefore, psychological equity is as important as brand equity. Digital tools could help engage the consumer and build trust. There is need to evolve with the consumer, and brands should never talk down to consumers.

  • Egypt turmoil, Japan quake shave off $2.4 bn in ad spend: ZenithOptimedia

    Egypt turmoil, Japan quake shave off $2.4 bn in ad spend: ZenithOptimedia

    MUMBAI: Zenithoptimedia has revised the ad spend growth forecast down from 4.6 per cent to 4.2 per cent due to the turmoil in Middle East and the earthquake in Japan.

    These events have knocked off $2.4 billion in this year’s global ad expenditure.

    The immediate consequences of these events have most affected these markets: Egypt and Japan.

    In Egypt – one of the largest ad market in the Middle East – there was almost no advertising on television during the revolution, and in the aftermath advertisers have been very careful about their messages, the agency stated.

    Also, Japanese broadcasters replaced almost all commercial ad slots with public-service announcements for weeks after the earthquake, and blackouts and distribution problems will hinder media consumption for months to come.

    The agency, however, doesn’t expect these shocks to derail the global recovery in the long term. Some of the missing advertising may reappear later in the year, followed by strong growth in these markets in 2012. Japan is forecast to shrink 4.1 per cent this year before growing 4.6 per cent next year, while Egypt follows this year’s 20 per cent drop with 12.1 per cent recovery in 2012, Zenithoptimedia concluded.

    According to the quarterly forecasts, the underlying recovery remains healthy. ZenithOptimedia has upgraded its forecast for 2012 from 5.2 to 5.8 per cent. The developing markets will increase their share of global ad expenditure from 30.9 per cent in 2010 to 35.1 per cent in 2013.

    The Internet will become the world’s second-largest advertising medium in 2013, overtaking newspapers.

    There is strengthening in Western and Central and Eastern Europe, where advertisers are becoming more confident of the long-term economic prospects. The large disparity in growth rates between developed and developing markets continues.

    The agency also forecasts North America to grow by an average of 3.1 per cent a year between 2010 and 2013 and Western Europe to grow by 3.5 per cent. It expects Japan to grow just 0.7 per cent a year, though this obscures the big drop in 2011 followed by the recovery of lost ground over the next two years.

    It also predicted 0.1 per cent annual growth in the Middle East, as advertisers tread carefully amid political instability. Meanwhile, it forecasts Latin America to grow by 8.2 per cent a year, Central and Eastern Europe by 12.4 per cent, Asia Pacific by 6.6 per cent and Asia Pacific excluding Japan to grow by 10.2 per cent.

    Developing markets – which are everywhere outside North America, Western Europe and Japan – will increase their share of the global ad market from 30.9 per cent in 2010 to 35.1 per cent in 2013.

    There are now two ‘developing’ markets in the world’s top ten ad markets, and there will be three in 2013. China (forecast to grow at an average 13.6 per cent a year to 2013) will overtake Germany (forecast 2.4 per cent annual growth) to become the world’s third-largest ad market in 2011, and stay at that position throughout the forecast period.

    China is currently just over half (54 per cent) the size of Japan, the second-largest ad market, and will be just over three-quarters (77 per cent) of its size in 2013. Brazil (with 15.4 per cent annual growth) will overtake France (with 2.9 per cent) to take sixth place in 2011. Russia (23.3 per cent growth) will rise from 12th place in 2010 to tenth in 2011, eighth in 2012, and then seventh in 2013.

    However, the next five largest contributors are all developing markets: China (which contributes almost as much as the US, $10.8 billion), Russia ($6.9 billion), Brazil ($3.3 billion), India ($2.5 billion) and Indonesia ($2.4 billion).

    The agency predicts that the Internet will overtake newspapers to become the world’s second-largest advertising medium in 2013. While it has long expected this to happen in the near future, this is the first time this event has fallen within its forecast period.

    Newspaper ad expenditure was still 51 per cent larger than Internet ad expenditure in 2010, but newspaper expenditure is shrinking by 1.4 per cent a year, as circulations continue to fall in developed markets, and readers migrate to the Internet.

    Internet advertising continues to grow at breakneck pace, at a forecast average rate of 14.4 per cent a year between 2010 and 2013.

    The agency forecasts newspaper ad expenditure to fall from $95.2 billion in 2010 to $91.2 billion in 2013, while Internet ad
    expenditure rises from $63 billion to $94.5 billion over the same period.

    This year display advertising has taken over from search as the main driver of Internet ad growth. Display, broadly defined here to include online video and social media, has been invigorated by these fast-growing segments.

    Affordable, do-it-yourself tools to create streaming video ads have opened online video to small and local advertisers. Social media sites now attract huge audiences, though click- through rates and, therefore, costs are often very low.

    The agency expects global display ad expenditure to grow at an average of 16.4 per cent a year to 2013, while paid search grows by 12.8 per cent and classified by 10.2 per cent.

    Television remains by far the largest medium and is continuing to increase its market share. Television attracted 40.4 per cent of global ad expenditure in 2010, up from 37.3 per cent five years earlier, and we expect it to attract 41.7 per cent in 2013.

    Bigger and higher-quality displays, more channels delivered by digital television, and the convenience of PVRs mean people are watching more television than ever. zenithOptimedia forecasts television ad expenditure to rise from $180.3 billion in 2010 to $216 billion in 2013.

  • 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.