ITV

Tag: HUL

  • HUL trims ad spend by 7% in Q3

    HUL trims ad spend by 7% in Q3

    MUMBAI: Joining its peer Colgate-Palmolive, FMCG giant Hindustan Unilever Ltd (HUL) has cut down its ad spends in the fiscal-third quarter ended December amid pressure on margins and a slowdown in the economy.

    The largest ad spender in India trimmed its promotional budget by 7.14 per cent in the quarter to Rs 6.9 billion compared to Rs 7.43 billion in the earlier year.

    The year-on-year percentage of sales to advertising and promotional spending has also decreased from 14.5 per cent in the third quarter of FY‘11 to 11.6 per cent in Q3 FY‘12.

    For the nine-month period ended December, HUL‘s ad and promotions spend dropped 7.77 per cent to Rs 19.74 billion as against Rs 21.41 billion a year ago.

    Percentage of ad spend to sales during this period also took a blow, dropping to 11.84 per cent from 14.76 per cent.

    HUL launched two products in the personal care category in the third quarter of the current fiscal – Dove Nourishing Oil Care shampoo and Sure for Men. In the foods category, it launched Bru Gold coffe, Brooke Bond Taj Mahal Green Tea and a range of Brooke Bond Taj Mahal tea bags in various flavours. In its water category, HUL launched a new variant of Pureit water purifier.

    The company launched a promotional exercise by the name Joy of Giving Week and also celebrated Global Handwash Day both in October 2011.

    Fuelled by volume growth, sales rose 16.5 per cent to Rs 58.53 billion from Rs 50.27 billion in the corresponding quarter a year ago. Sales and detergents put up a stronger performance than personal products.

    Competitive pressures, however, could challenge the sustainability of this volume growth.

     

    Company Name Q3FY12 Ad Spend (in Rs) Ad/Sales Ratio (%)
    HUL 6.9 billion  11.6
    Dabur India Ltd 1.98 billion 13.6
    Marico 1.34 billion 12.5
    Colgate- Palmolive 1.07 billion 16.1

     

    Marico and Dabur India are the two FMCG companies that posted an increase in A&P spends in Q3FY12 of 48.63 per cent and 46.9 per cent respectively while Colgate-Palmolive cut its spends by 10.86 per cent.

     

  • ‘Peak fragmentation affecting rev growth’ : Zeel executive director revenue and niche channels Joy Chakraborthy

    ‘Peak fragmentation affecting rev growth’ : Zeel executive director revenue and niche channels Joy Chakraborthy

    There are early indications that the advertising economy is slowing down. With many parts of the world awash in economic gloom, there are forecasts that guide India‘s television advertising revenue market to a below double-digit growth this fiscal.

    Zee Entertainment Enterprises Limited (Zeel) executive director revenue and niche channels Joy Chakraborthy believes the sports segment will see a degrowth while the Hindi general entertainment channels (GECs), caught in a four-horse race, will lose their pricing power.

    Though advertisers are exercising caution in spending, rate hikes are taking place in certain genres like movie and regional channels. Even in case of Hindi GECs, certain programmes can get rate hikes.

    In an interview with Indiantelevision.com‘s Sibabrata Das, Chakraborthy talks about peak fragmentation affecting revenues and what the industry needs to do to beat growth blues.

    Excerpts:

    Zeel posted a measly 0.5 per cent rise in first-quarter ad revenue over the year-ago period. So are we heading for an ad slowdown due to stresses in the global economy or is it is due to a fall in ratings of the flagship Hindi general entertainment channel Zee TV?

    Advertisers are exercising caution in spending. They are entering into quarterly and shorter term deals; not too many annual deals are happening. We will be hit both by a possible slowdown and a fall in viewership of Zee TV. But at the same time, we have the highest GRP-to-revenue conversion.

    Major spenders like FMCGs have said that they will be slashing their ad budgets as their profit margins are getting squeezed. How deep will the television advertising economy be hit?

    There is a concern, but at the same time many of the FMCG companies are launching variants. If HUL states that it is slashing its ad budget, frankly speaking it is no more a scare. But what could be disturbing is that we are seeing a drop in high-yielding inventories filled by telecom, banking and finance and real estate companies. We are hoping that like telecom which came in a big way a few years back, we will see a new category emerge. India being an emotional country, a single strong wave can lead to a turnaround.

    But don‘t FMCGs account for 55 per cent of the total TV ad pie?
    It is not that FMCGs are going to retreat. They are redeploying their ad monies. While their spends on cricket and Doordarshan are getting reduced, they are increasing their allocations to GECs, regional markets and other genres. And if HUL and Marico cut their spends, ITC and others will up them. There is too much competition in the category.

    Will broadcasters be able to implement effective ad rate hikes?
    Broadcasters have almost filled up their ad inventories. Perhaps, what has increased is ‘float deals‘ (whenever inventory ia available, channels give them to clients at a marginal discount rsate) given to FMCGs. Rate hikes, however, are taking place in certain genres like movie and regional channels. Zee, for instance, will see ad revenue growth in Marathi, Bangla, Kannada and Andhra Pradesh markets. Even in case of Hindi GECs, certain programmes can get rate hikes. Celebrities, for instance, attract a premium.
    ‘Advertisers are exercising caution in spending. But if HUL states that it is slashing its ad budget, frankly speaking it is no more a scare. What could be disturbing is that we are seeing a drop in high-yielding inventories filled by telecom, banking and finance and real estate companies‘

    In case of Hindi GECs, we are moving from a three-horse race last year to a fight among the four at the top with the resurgence of Sony Entertainment Television. How is this going to affect the genre?

    As we move to a four-horse race, Hindi GECs will lose their pricing power. The genre will see growth but there will be revenue fragmentation. Media agencies will be in a better bargaining position.

    How hard will Zeel be hit considering that its flagship channel Zee TV will most likely continue to be placed No. 4 during the festive season?

    It does worry us. But in case of a slowdown, advertisers like to hedge their bets. The comfort zone for them could be that Zee TV wouldn‘t fall further; it can only go up. And the difference between the top-rung GECs is mainly one show. After Jhansi Ki Rani fared well during its run at the 8 pm slot, its replacement Shobha Somnath Ki has not been doing well. We are relaunching that show.

    Let‘s also not forget that advertisers and agencies are not opportunists; they do not dump the ship but value long term relationships and the network strength.

    Will Zee TV, which contributes about 40 per cent of the network‘s ad earnings, see a degrowth?

    We are seeing strong growth in many of our channels. In fact, eight of our channels have posted peak monthly revenues in August. But, yes, there will be some impact if Zee TV loses GRPs.

    Considering that there is a slowdown and the GECs are caught in a fight among four at the top, what is the growth forecast for the television sector?

    Television will grow at 10-12 per cent this year, faster than print which will crawl at 2-3 per cent. But there is still a lot of ground to cover. We believe the television ad revenue size is Rs 107.50 billion compared to print‘s Rs 119 billion.

    Another abnormal thing this year is that the Dussehra and Diwali festive season falls in the same month (October). Television has limited inventory. If this would have stretched over two months, the sector would have gained.

    A proper picture of the growth pace will, however, emerge after we get the trends in November and December.

    Sports was a big revenue driver in FY‘11. Will it sustain that momentum this fiscal?

    Sports will see degrowth. Sports broadcasters earned a combined ad revenue of Rs 15 billion in FY‘11, buoyed by the World Cup and the Indian Premier League (IPL). But this fiscal their ad revenue will be under attack because of India‘s debacle against England. The India-West Indies series was affected as some of India‘s stars were not playing. Seeing the performance of the Indian team, the Champions League Twenty20 is obviously facing the music.

    Sports broadcasters only focus on property-based selling. They should also strategise on RODP (run of day part) and ROS (run on schedule) selling. We are doing that in a big way.

    How difficult is it to push hard for revenue growth in such a cluttered television market even for niche genres?

    The biggest problem in the television industry is that fragmentation is peaking. There are 18 music and 15 English entertainment channels. Where is the money going to come from? Revenue gets affected because of fragmentation.

    Zee is in a fortunate position as it has the largest bouquet of channels. The niche channels have also built a brand equity over the years. We are seeing 10-15 per cent growth in this segment. But for new channels that are to come up, there is no bandwidth on both analogue cable networks and DTH platforms.

    You are not happy with the way distribution is evolving?

    The underreporting of subscriber numbers is hurting the industry. Broadcasters are feeling the pinch with content costs climbing, as ad sales is still funding the television business. Whatever a broadcaster earns as pay revenue goes out as carriage fees. The cable TV sector needs transparency.

    Is slowdown good in that sense as it will act as an entry barrier for more launches?

    Slowdown is good in a way as it will ensure that networks with sustaining power will gain. The No. 1 and No. 2 players will take away most of the monies. Costs will also get corrected as companies try to protect their bottom lines.

    But at the same time there is one player every year who spoils the market. In the movie channel space, for instance, Viacom18 drove the acquisition price insane last year. This year Star is doing it.

    Do you see an opportunity for leading broadcasters like Zee to get smaller networks outsource their ad sales?

    Personally, I feel there will be media-selling consortiums, led by big networks. We are evaluating partnerships in markets where we do not compete.

    The time has also arrived for us to dig deep into the regional markets. We have formed a retail team and they are tapping such clients.

    How beneficial has it been from a growth perspective as you have been handling the ad sales of television as well as print with DNA under your belt?

    Print is very scheme-led, there are too many hidden deals, and no timely research is available. The circulation gains can‘t be monetised immediately. But in print you can do a lot more innovations. Print and television buyers are totally different in mindset but the basic business principle remains the same.

    DNA has benefited from Zee‘s deep relationship with media agencies. Zee, on the other hand, has been able to gain access to a wider breadth of clients. We would have benefited more from the synergies if we had not lost GRPs (gross rating points) and our channel positions were healthier.

  • HUL slashes ad spend by 15.74% in Q1

    HUL slashes ad spend by 15.74% in Q1

    MUMBAI: Hindustan Unilever, the Indian unit of Anglo-Dutch Unilever Plc, has slashed its advertising spend for the first quarter by 15.74 per cent, signalling a possible slowdown in the economy.

    The largest Indian household products and consumer goods maker has spent Rs 6.33 billion in the quarter ended 30 June 2011, down from Rs 7.51 billion a year ago.

    For the full-fiscal ended March 2011, the company had spent Rs 27.64 billion on advertising and promotions.
     
    HUL said that advertising spends were stepped up in the personal products and packaged foods segments, while spending on soaps and detergents was calibrated in line with industry trends.

    “Advertising and promotion spends at 11.5 per cent of sales remained competitive,” the company said.

    Return on marketing investments (ROMI) is an area where the company has stepped up focus in recent times.

    HUL‘s first-quarter net profit at Rs. 6.27 billion grew by 17.62 per cent.
     

  • HUL’s ad spend up 15.7% to Rs 28.3 bn in FY’11

    HUL’s ad spend up 15.7% to Rs 28.3 bn in FY’11

    MUMBAI: For broadcasters who are clamouring for increase in advertising rates, there is a piece of good news.

    Hindustan Unilever, the largest ad spender in the country, has upped its spending on a consolidated basis for the fiscal ended 31 March 2011, more than offsetting Marico‘s marginal drop.

    India‘s largest household products and consumer goods maker has increased its spend on advertising and promotions by 15.68 per cent to Rs 28.33 billion during the fiscal, up from Rs 24.49 billion in the year-ago period.

    Ad spending on a standalone basis also rose 15.59 per cent to Rs 27.64 billion for the fiscal, from Rs 23.91 billion.

    However, HUL has cut down its standalone ad spend for the fourth quarter, albeit marginally. The company, which owns brands such as Dove soap, Clinic shampoo and Closeup toothpaste, spent Rs 6.23 billion towards advertising and sales promotion, down from Rs 6.26 billion a year ago.

    For the quarter, HUL increased brand investment in the personal products and food segment.

    “A&P spends, at Rs.6.23 billion, remained competitive at 12.7 per cent of sales, with increased brand investment in personal products and foods,” the company said in a statement.

    The company said net profit in the fourth quarter ended March fell to Rs 5.69 billion, from Rs 5.81 billion a year ago.

    The company‘s cost of goods sold went up by 290 basis points in the quarter.

    Marico had earlier announced a marginal drop in its ad spend for the fiscal. The company, which manufactures hair-oil brand Parachute, had spent Rs 3.46 billion towards advertising and sales promotion for the year ended 31 March 2011. In the previous fiscal, Marico had an ad spend of Rs 3.51 billion.

  • HUL consolidates OOH biz with Aaren Initiatives

    HUL consolidates OOH biz with Aaren Initiatives

    MUMBAI: Hindustan Unilever (HUL) has consolidated all its OOH (out-of-home) business with Lintas Media Group‘s outdoor arm Aaren Initiatives. 
     
    Until recently, Unilever’s OOH duties were together handled by Kinetic’s Portland and LMG’s Aaren Initiative.
     
    A reliable source in Aaren Initiatives has confirmed the story to Indiantelevision.com.
     
    Earlier this month Aaren Initiatives had won Nokia’s entire media planning and OOH Media Initiatives for the financial year 2011. LMG’s outdoor arm has recently also roped in Gaurav Chhibber as associate business director- North.

  • TV spends show 20% increase to Rs 55 billion in 2005

    Media matters and how. Lintas Media Services has churned out a comprehensive media guide, which is an analysis of media spends and buys in the year gone by. Released by Intellect, a part of the Lintas Media Group, it studies all genres; television, print, radio, internet, cinema, outdoor and gives a break up of the media environment and general media industry trends of last year.

    With data compiled from all over the Indian subcontinent, spanning more than 28 states and seven Union territories, the guide is an all-inclusive take on the Indian media industry and players.

    Lintas Media Group director media services Lynn de Souza said, “Media closed 2005 on a happy note and 2006 promised to be an optimistic year. The total advertising media spends showed a growth of 15 per cent reaching a figure of Rs 159.41 billion. While print continued to hold more than 57 per cent of the total media spends, radio, as a means of advertising saw an increase in the ad spends. Cinema, outdoor, and internet on the other hand capitalised on innovations. In many ways, 2006 will be a year that we can all excitedly look forward to.”

    The total media expenditure mix for 2005 was that of Rs 159.41 billion over 2004‘s Rs 120.71 billion, of which press saw a growth of 14 per cent over 2004 with an expenditure of Rs 90.64 billion in 2005. Internet saw a growth of 35 per cent with its media expenditure standing at Rs 1 billion in 2005 over Rs 740 million in 2004. Radio and Outdoor medium saw a growth of 25 per cent each, with outdoor at Rs 8.55 billion and radio standing at Rs 3.75 billion. All in all, an overall growth of 15 per cent was witnessed in 2005 across all media.

    Of the total Rs 159.41 billion media expenditure in 2005, press share comprised 56.9 per cent, television was 34.7 per cent, outdoor was 5.4 per cent, radio was 2.3 per cent and internet was 0.6 per cent.

    In the first of the series, we take a look at what the Television scenario in 2005 was like.

    Television spends showed a 20 per cent increase to Rs 55.26 billion in 2005 as compared to 2004‘s Rs 46.08 billion. While cable and satellite channels contributed significantly to this growth, DD terrestrial channels too clocked a healthy growth figure. What has fuelled this growth is the sharing of cricket rights and the increasing need for the advertiser to reach smaller towns.

    Television not only saw a continued increase in the number of channels but also in ad spends. TV spends increased by news channels, kids channels, niche entertainment channels, continued to add to the existing channel bouquets.

    Not only TV software but immense progress was seen in the TV delivery systems. DTH, IPTV, digital cable, CAS – all have become a feasible reality now limited only by the government stipulations.

    The Lintas Media Guide mentions that these developments promise to aid faster penetration of satellite channels to the hinterlands and at the same time will enable providing a richer and interactive viewing experience for the upper town populace.

    DTH, on the other hand, too became a reality with DD Direct and Zee‘s Dishtv stepping on the pedal to make available their services to small town and rural areas. Now with the impending launch of the Tata Sky DTH platform, this space will gain further impetus.

    On the programming front, as family dramas lost some charm, multiple offerings amongst news, kids and niche entertainment channels brightened the choice for the viewers. However, there was no respite in the rate at which new channels are being added to the current bouquets from the earlier years.

    According to the Lintas Media Guide 2006, the emergence of niche genres and their success in capturing the interest of the evolving TV audiences has affected the share of the general entertainment genre.

    Advertising avoidance is a globally recognized issue and broadcasters, advertisers and media agencies are all aware of it. However, with TV still being the most suitable media for various brands, there is a spurt in the efforts to go beyond the 30 second commercial. Content creation, in-program placements, integration with ground activities and creating interactivity are some of the different ways in which the advertisers are trying to get the TV viewer exposed to the brand messages.

    The Guide also mentions that there have been feeble or no attempts by the broadcasters to reduce ad-clutter. Unless DTH, CAS and other addressable systems append to the subscription revenue of the advertisers, the ad clutter is set to increase. The ad-clutter (of an average ads seen by any TV viewer per week) stands at 313 ads per week and shows an increase of eight per cent over last year.

    Apart from that, TV research also continued to be a matter of hot debate and AMap, the new entrant in the industry steadily but surely managed to set up a formidable TV measurement panel aiming to be far bigger in sample size than the existing TAM panel. The year 2006 will have TAM and AMap waging an even more pronounced battle of ratings, says the Guide.

    The research users expect a larger sample size, more description variables and faster reporting among other improvements in the research system. This year will be the year to see how Tam responds to the competitive challenge and how the TV measurement system in India develops.

    According to Lintas Media estimates based on indicative market costs, the top category of advertisers on TV in 2004 – 2005 are as shown below:

    According to Lintas Media estimates based on indicative market costs, the top advertisers on TV in 2004 – 2005 are as shown below:

    According to Ficci, television advertising pie is set to increase its share to 51 per cent by 2010 and a lot of this growth is expected through subscription and content syndication amongst other things.

    “We look forward to 2006 as the year for TV to re-orient itself in the areas of multiple delivery platforms, maturing of the niche genres, innovation in advertising and improved TV research,” says the Guide.

    Stay tuned for the next in the series…