ITV

Tag: marketing spends

  • Marketing world cautious over NTO 2.0, Coronavirus

    Marketing world cautious over NTO 2.0, Coronavirus

    NEW DELHI/ MUMBAI: It has been less than a year since the dust around NTO had settled, which even resulted in a dip in TV ad spends last year, and the hay has once again been unsettled with uncertainties raised by NTO 2.0. With broadcasters taking up the case legally against the new pricing regime, the marketing world has to deal with a new set of confusions.

    Elaborating on the situation, Carat SVP Vinita Pachisia notes, “Advertisers usually earmark budgets for each medium before the new financial year begins. A change in the tariff regime will again disrupt the viewership. Last year when the NTO was implemented it took almost 6-8 weeks for the data to stabilise and for the advertisers to use it for plan evaluations. The new NTO amendments could again lead to similar fluctuations as it aims to bring in more viewership options to the audiences at a lower cost and higher FTA channels access. This in turn will lead to the advertisers to rethink on the advertising options before committing any spends.”

    According to Update Geotarget MD and founder Sharad Alwe, marketers are looking for alternate and effective mediums to deliver impactful messaging as people are moving to other platforms.

    He says: “It is no secret that since NTO 1.0, the availability of broadcast channels in GEC and movies genres has dropped appreciably in households. DTH has also shown a slight downtrend and is undergoing consolidation. Viewers are either happy with the mandatory Free-To-Air channels that come with the base NCF package, or, in the case of metros and Tier 1, some are moving to OTT.”

    Havas Media CEO India and South East Asia Anita Nayyar shares similar sentiments, “The ad spends (on TV) will get affected given the changes in NTO 2.0. The total cost to choose the channels will impact TV viewing. The other platforms will tend to gain viewership as they become more viable for the viewer's pocket.”

    Godrej Consumer Products Ltd VP and head media services Subha Iyer says that there have been cuts on ad spends. “It (NTO 2.0) will definitely cause an impact when we consider the fact that consumer offering in the form of multiple bouquets, pricing, etc. will go through another round of change. In the current scenario, one has to plan for multiple events affecting all of us with their implications in the market, business as well,”

    However, Nayyar believes what is impacting media planning and ad spends more than NTO is the novel Coronavirus COVID-19. She says, “There is a lot of caution on ad spends in the market. The cumulative impact is far higher than the NTO impact. And the YES bank fiasco is just adding fuel to fire. Advertisers are waiting and only undertaking crucial spends.”

    Pachisia also adds, “Currently the market sentiments are very low due to the present situation of Coronavirus across the world. Advertisers have been affected due to the ban on imports and this in turn has affected the advertising spends. The furore on IPL is another major factor to consider here. Hence it would be very difficult to gauge right now if the advertising spends have reduced due to NTO 2.0 or all the other current factors in the market.”

    The whole industry is in a jittery considering the ongoing climate of crisis and the advertisers prefer  to tread the waters extremely carefully. Alwe and Pachisia feel that there is going to be a structural shift in the advertising market shares.

    Alwe says, “While TV has always been the traditional medium for national awareness, marketers we speak with are constantly looking for a smarter way to deliver their message. Hyperlocal geo-targeting, multilingual communication and ROI are what marketers expect from their media plan. We believe that while TV, digital and print will continue to have their presence in a media plan, marketers will look for other options to complement their traditional strategy, and there will be a structural shift in market share.”

    Pachisia concludes, “The new NTO amendments would definitely force advertisers to rethink their strategies, resulting in a realignment of media plans which would definitely impact spends on TV. Clients who have specific quarter-wise budgets may look to spend it on other mediums till such time that the data settles and is comparable. The niche genres are already facing stiff competition from the OTT platforms and factors like these, and so many amendments to the NTO, are fuelling the decision to some extent.”

  • Flipkart spends 80 percent of its digital marketing budget on mobile: Flipkart Ads business head Prakash Sikaria

    Flipkart spends 80 percent of its digital marketing budget on mobile: Flipkart Ads business head Prakash Sikaria

    MUMBAI: While addressing a session at a marketing conclave in Mumbai, that debated the relevance of mobile marketing and the need to go app first for brands, Flipkart Ads business head Prakash Sikaria shared that the  eCommerce giant spends almost 80 percent of its digital marketing budget on mobile.

    Sikaria’s confidence in the medium stems from the data the eCommerce site has gathered as an advertising and eCommerce platform that tracks its consumers’ usage behaviour on multiple screens.

    When posed with the question ‘is mobile a minor or a major screen’ Sikaria simply asked, ‘Is that even a  debate’. To back his astonishment at the topic of debate, Sikaria shared that for a eCommerce company such as Flipkart going mobile first was only natural, given that more and more of the site’s consumers are switching to spending more time on their smartphones.

    “Just to put things in perspective, 3 hrs of mobile in India is equatable to 92 mins of television, which is in turn equatable to 31 minutes of  desktop usage by viewers. What we see as a consumption pattern for several businesses mobile is the only screen in India, and going forward a large proportion of the time spent on any medium by consumers would be on mobile,” Sikaria shared, highlighting how India is unique in its mobile friendliness.

    Sharing some data the eCommerce platform has gathered from its own consumer research and data and analysis of consumer behaviour on the platform, around 50 per cent of the time spent on mobile is used for communication.  According to the consumer pattern gathered from traffic on Flipkart’s mobile app and its  web usage analysis, Sikaria inferred that usually customers try the mobile app first, and once they are convinced with the services and have grown loyalty towards the brand, they move to web. This places mobile marketing as the supreme most important requirement for a brand that functions mostly digitally, as it introduces the service to new consumers.

    “We have also noticed that across metrics there is better customer engagement and better customer experience on mobile from how much time consumers spend on the site per visit, to how many successful transactions they complete per visit,” Sikaria shared.

    As per Sikaria, once the user has jumped the hurdle of downloading the app the engagement is far higher on mobile than on other medium like desktop, provided the app is designed conveniently for them. That is the reason every ecommerce site, every travel startup or web based business wants their app to by in everyone’s phones.

    It is to be noted that between the four to five major eCommerce players in the country, television media raised about Rs 1,200 crores in advertising revenue in a single quarter, albeit it was before Diwali last year.

    Now with a key player such as Flipkart thinking mobile first, should television advertisement slot seller be worried about the smaller screen stealing away the advertisers which are native to the medium? 

  • Flipkart spends 80 percent of its digital marketing budget on mobile: Flipkart Ads business head Prakash Sikaria

    Flipkart spends 80 percent of its digital marketing budget on mobile: Flipkart Ads business head Prakash Sikaria

    MUMBAI: While addressing a session at a marketing conclave in Mumbai, that debated the relevance of mobile marketing and the need to go app first for brands, Flipkart Ads business head Prakash Sikaria shared that the  eCommerce giant spends almost 80 percent of its digital marketing budget on mobile.

    Sikaria’s confidence in the medium stems from the data the eCommerce site has gathered as an advertising and eCommerce platform that tracks its consumers’ usage behaviour on multiple screens.

    When posed with the question ‘is mobile a minor or a major screen’ Sikaria simply asked, ‘Is that even a  debate’. To back his astonishment at the topic of debate, Sikaria shared that for a eCommerce company such as Flipkart going mobile first was only natural, given that more and more of the site’s consumers are switching to spending more time on their smartphones.

    “Just to put things in perspective, 3 hrs of mobile in India is equatable to 92 mins of television, which is in turn equatable to 31 minutes of  desktop usage by viewers. What we see as a consumption pattern for several businesses mobile is the only screen in India, and going forward a large proportion of the time spent on any medium by consumers would be on mobile,” Sikaria shared, highlighting how India is unique in its mobile friendliness.

    Sharing some data the eCommerce platform has gathered from its own consumer research and data and analysis of consumer behaviour on the platform, around 50 per cent of the time spent on mobile is used for communication.  According to the consumer pattern gathered from traffic on Flipkart’s mobile app and its  web usage analysis, Sikaria inferred that usually customers try the mobile app first, and once they are convinced with the services and have grown loyalty towards the brand, they move to web. This places mobile marketing as the supreme most important requirement for a brand that functions mostly digitally, as it introduces the service to new consumers.

    “We have also noticed that across metrics there is better customer engagement and better customer experience on mobile from how much time consumers spend on the site per visit, to how many successful transactions they complete per visit,” Sikaria shared.

    As per Sikaria, once the user has jumped the hurdle of downloading the app the engagement is far higher on mobile than on other medium like desktop, provided the app is designed conveniently for them. That is the reason every ecommerce site, every travel startup or web based business wants their app to by in everyone’s phones.

    It is to be noted that between the four to five major eCommerce players in the country, television media raised about Rs 1,200 crores in advertising revenue in a single quarter, albeit it was before Diwali last year.

    Now with a key player such as Flipkart thinking mobile first, should television advertisement slot seller be worried about the smaller screen stealing away the advertisers which are native to the medium? 

  • FY-2015: Emami marketing spends up 41%, PAT up 21%

    FY-2015: Emami marketing spends up 41%, PAT up 21%

    BENGALURU: Emami Limited spent 41.3 per cent more towards its Advertisement and Sales Promotion (ASP) in FY-2015 (year ended 31 March, 2015, current year) at Rs 391.19 crore (17.7 per cent of Total Income from Operations or TIO) as compared to the Rs 277.41 crore (1.5 per cent of TIO) in the previous year.

    The company’s profit after tax (PAT) increased 20.6 per cent in the current year to Rs 485.45 crore (21.9 per cent of TIO) from Rs 402.27 crore (22.1 per cent of TIO) in FY-2014. Emami’s TIO in FY-2015 at Rs 2217.25 crore increased 2.18 per cent from the previous year’s TIO of Rs 1820.77 crore.

    Note: 100,00,000 = 100 lakh = 10 million = 1 crore

    Among the brands in Emami’s portfolio are Zandu, Zandu Balm, Himani Navratna, BoroPlus, Fair and Handsome, Emami Vasocare, Emami Mentho Plus, Himani Fast Relief, Zandu Sona Chandi Chyawnprash Plus, Zandu Kesari Jivan, etc.

    Historically, Q3 (the festival season in India) of a financial year has been the best quarter for Emami in terms of TIO and PAT, which peak in Q3. The next best quarter has been the fourth quarter of a financial year before sales and profits dip to the lowest in a year in Q1 (the summer and the beginning of the educational holiday season in India) followed by a rise in Q2.

    Refer to Fig A below for ASP during the 16 quarter period starting Q1-2012 until the current quarter.ASP in Q4-2015 was 66.5 per cent more at Rs 82.47 crore (14.9 per cent of TIO) as compared to the Rs 49.53 crore (11.1 per cent of TIO) spent in the corresponding year ago quarter but 30.8 per cent lower than the Rs 119.25 crore (17.2 per cent of TIO ) in the immediate trailing quarter.

    During the 16 quarter period under consideration in this report, Emami’s ASP was the highest in absolute rupees in the immediate trailing quarter (Q3-2105) at Rs 119.25 crore (17.2 per cent of TIO), while in terms of percentage of TIO, it was 21.3 per cent (Rs 102.84 crore) in Q1-2015. The lowest ASP by Emami in both in absolute rupees terms and as percentage of TIO was in Q4-2013 at Rs 36.6 crore and 9.2 per cent respectively during the period under consideration.

    In Fig A, the slope of the graph represented by the broken maroon line indicates that ASP in terms of percentage of TIO shows a slight increasing trend, and intercepts the Q4-2015 ordinate at 16.26 per cent, as opposed the 14.9 per cent actually spent by the company. The slope of the broken maroon line indicates that the ASP in terms of absolute rupees intercepts the Q4-2015 ordinate at Rs 94.3336 crore as compared to the Rs 82.47 crore actually spent by the company.

    As mentioned above, the company’s TIO is generally the highest in Q3 and lowest in Q1 of a financial year. In Q4S-2015, Emami reported TIO of RS 553.66 crore, which was 24.2 per cent higher y-o-y as compared to Rs 445.71 crore, but declined 20 per cent as compared to the Rs 692.26 crore in Q3-2015. Please refer to figure B below, in which the quarter on quarter percentage change of TIO is indicated by the red line with yellow markers.

    During the 16 quarter period under consideration, Emami TIO was highest in Q3-2015 at Rs 692.26 crore and lowest in Q1-2012 at Rs 299.91 crore. The black broken trend line shows that the company’s TIO is increasing linearly. The slope of the trend line intercepts the Q4-2015 ordinate at Rs 574.948 crore, indicating that the company’s performance at 553.36 crore was lower than that indicated by the trend line.

    The company’s PAT follows the same trend of being the highest in Q3 and the lowest in Q1 during the period under consideration in this report. PAT in Q4-2015 at Rs 138.33 crore (25 per cent of TIO) was 21.9 per cent more than the Rs 111.15 crore (24.9 per cent of TIO) in Q4-2014, but declined 24.7 per cent from Rs 183.70 crore (26.5 per cent of TIO) in Q3-2015. Please refer to Fig C below.

    During the 16 quarter period under consideration, the highest PAT both in terms of absolute rupees as well as percentage of TIO was in the previous quarter at Rs 183.7 crore and 26.5 per cent respectively.The lowest PAT in terms of absolute rupees and percentage of TIO was in Q1-2012 at Rs 41.5 crore and 13.8 per cent respectively.

    The slope of the pink broken trend line indicates its intercept of Q4-2015 at 23.52 per centof TIO as compared to the actual 25 per cent of TIO achieved by Emami. The slope of the broken blue line shows its intercept with Q4-2015 atRs 134.6008 crore as compared to the Rs 138.33crore PAT actually achieved by the company. Both trend lines inclinedlinear increments. 

  • Colgate-Palmolive Q-2015 marketing spends at Rs 201 crore

    Colgate-Palmolive Q-2015 marketing spends at Rs 201 crore

    BENGALURU: Q2-2015 has witnessed probably what has been Colgate-Palmolive (India) highest advertisement and sales promotion spend (marketing or ASP) in a quarter at Rs 201 crore (20.1 per cent of Total Income or TI) based on the data over the last 10 quarters starting Q1-2013 until Q2-2015. Q2-2015 ASP was 11.3 per cent more than the Rs 180.55 crore (18.7 per cent of TI) in the immediate trailing quarter (Q1-2015) and 68.2 percent more than the Rs 119.47 crore in the corresponding year ago quarter Q2-2014.

    Note: 100,00,000 = 100 Lakhs = 10 million = 1 crore

    Colgate-Palmolive’s brands include Colgate for oral care, Palmolive, Charmis and Halo for personal care, and Axion for household care.

    Please refer to figure A below. Over the 10 quarter period under consideration, Q2-2015 ASP is also the highest in terms of percentage of TIO, with the previous highest being 18.7 percent of TI in Q1-2015.

    Across seven financial years starting FY-2008 until FY-2014, the company’s TI, ASP  and ASP as percentage of TI show an upward linear trend, with the company’s marketing spends being the highest both in terms of absolute rupees and percentage of TI in FY-2014 at Rs 688.66 crore (19.2 per cent of TIO).

    In H1-2015 (six month period ended September 30, 2014), Colgate-Palmolive’s ASP at Rs 381.55 crore (19.5 percent of TI) was 72.8 percent more than the Rs 220.86 crore (12.3 percent of TI) in H1-2014 and was more than double (2.21 times) the ASP of Rs 172.64 crore (11 percent of TI) in H1-2013.

    Similarly, across the 10 quarters under consideration in this report, TI, ASP and ASP as percentage of TI show an upward linear trend. Colgate-Palmolive’s TI in Q2-2015 at Rs 1000.52 crore was 3.9 percent more than the Rs 956.90 crore in Q1-2015 and 9.5 percent higher y-o-y than the Rs 913.75 crore.

    Colgate-Palmolive’s TI in Q2-2015 at Rs 1000.52 was 3.9 percent more than the Rs 963.55 crore in Q1-2015 and 9.5 percent more than the Rs 913.75 crore in Q-2014. For H1-2015, Colgate-Palmolive’s TI improved 9.5 percent to Rs 1957.42 crore from Rs 1790.56 crore in H1-2014. The company had reported TI of Rs 3578.81 crore for FY-2014.

    Colgate-Palmolive’s Advertisement spends to increase in Q3-2015?

    Colgate-Palmolive’s ASP comprises of two components – (a) Advertising, and (b) Sales promotion. Data for 3 financial years – FY-2012, FY-2013 and FY-2014 show the breakup of ASP into these two components. Please refer to Fig A1 below. If one were to assume the lowest percentage in figure A1- 63.8 of ASP, as component of ad spend, the company’s advertisement spend in Q2-2015 works out to about Rs 128 crore. The simple average of the ad spends for the three years works out to 66.8 percent or about Rs 134 crore.

    Going by the company’s trends in FY-2013 and FY-2014, ASP has been higher in Q3 than in Q2, hence the chances of the company spending at least the same, if not higher amounts towards marketing in Q3-2015 are quite high.

    PAT

    Colgate-Palmolive’s PAT in Q2-2015 was 4 percent lower at Rs 129.58 crore (13 percent of TI) than Rs 134.91 crore (14.1 percent of TI) in Q1-2015, but was 18.3 percent more than the Rs 109.52 crore (12.2 percent of TI) in the corresponding quarter of last year. YTD, in fiscal 2015, Colgate-Palmolive’s PAT at Rs 264.49 crore (13.5 percent of TI) was 10.3 down as compared to the Rs 294.74 crore (16.5 percent of TI) in H1-2014.

    On an annual basis, the company’s PAT shows an upward linear trend in terms of absolute rupees, but a downward linear trend in terms of percentage of TI. During the 10 quarters under consideration, the company’s PAT shows almost flat to downward linear trend in terms of absolute rupees and a downward trend in terms of percentage of TI.

  • ITC marketing spend trends – FY-2014

    ITC marketing spend trends – FY-2014

    BENGALURU: Indian fast moving consumer goods (FMCG), hotels, paperboards and specialty papers, packaging, agri-business, and information technology company ITC Limited (ITC) advertisement and sales promotion spend (ASP) in FY-2014 was 1 per cent lower at Rs 825.81 crore (2.28 per cent of Total Revenue or TR) as compared to the Rs 834.23 crore(2.57 per cent of TR) in FY-2013.

    Note: 100,00,000 = 100 Lakhs = 10 million = 1 crore

    The company has a huge brand and sub-brand portfolio and is one of the biggest player in the highly competative FMCG market, that is constantly adding newer and newer product categories and products. Some of the brands and sub-brands under the ITC umbrella across vertials include Sunfeast, Fiama Di Wills, Kitchens of India, ITC Hotels,  John Players, Bingo, Vivels, candyman, Mangaldeep, Aashirvaad, Classmate, Paperkraft, Wills, Aim, Engage and Mint-o.

    ITC’s ASP in terms of percentage of TR in FY-2014 was the lowest at 2.28 per cent over the 11 year period beginning FY-2004 till FY-2014. However, in absolute value terms, FY-2014 ASP at Rs 825.81 crore was the second largest during this period, the largest being in FY-2013 at Rs 834.23 crore. The company’s highest ASP spend in terms of percentage of TR was in 2004 at 3.97 per cent (Rs. 265.72 crore).

    The linear trend in Fig A below indicates that while in absolute rupee terms, the company’s  ASP will be higher in FY-2015 and beyond, ASP in terms of percentage of TR, ASP is likely to be lower or flat.

    ITC’s annual reports indicate some interesting facts. Please refer to Fig B below. The company’s TR has increased by 5.42 times from the Rs 6695.32 crores in FY-2004 to Rs 36288.03 crore in FY-2014, correspondingly, its total expenditure has gone up 5.31 times from Rs 4376.26 crore (65.4 per cent of TR)  to Rs 23236.48 crore (64 per cent of TR); it corresponding PAT too has jumped 5.58 times from Rs 1592.85 crore (23.8 per cent of TR) to Rs 8891.38 crore (24.5 per cent of TR), while its ASP has gone up by only 3.11 times from Rs 265.72 crore (3.97 per cent of TR) to Rs 825.81 crore (2.28 per cent of TR). Even in FY-2013, ASP was just fractionally more at 3.14 times the ASP in 2004. This indicates that the improvement in expenditure has been at the cost of lowering of ASP in terms of percentage of TR.

    Big players like HUL, Britannia and Parle in the foods and FMCG space are vying for the viewers attention and stomach space in the case of food, as ITC Foods division past CEO Ravi Navare once said. Over time, its ASP and specifically its ad spends should grow in absolute rupee terms, and maybe remain flat in terms of ASP as percentage of TR?