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World Newspaper Congress 11: Session Opportunities, Ravi Dhariwal

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  • 1. 63rd WORLD NEWSPAPER CONGRESS Session: Opportunities Title: Building Brands’ Capital Speaker: Ravi Dhariwal Mark your calendar64th WORLD NEWSPAPER CONGRESS19th WORLD EDITORS FORUM Vienna, Reed Messe Wien www.wan-ifra.org/kiev2012
  • 2. Building Brands’ Capital Partnering Entrepreneurs Ravi Dhariwal THE TIMES OF INDIA
  • 3. India: Prospect 1,34% Advertising Spends: GDP ratio 2009 0,95% 0,54% 0,47% US UK China India Source: KPMG-FICCI Frames 2009
  • 4. India: Advertising Prospect• Even established companies under- advertise o < 5% of listed companies spending 10%+ of revenue on advertising• New entrepreneurs cash strapped Source: CMIE
  • 5. Brand Capital - Addressing theParadox Business enterprise Limited Resources. • TOI provides advertising & strategic input • Shares business risks Brand Capital • Preserves Cash Need for a brand
  • 6. Multimedia Platforms : National 22% Share of Overall Ad Spend 33% Share of Print Ad Spend 30% Share of Radio Ad Spend Largest TV News Company Largest Out-Of-Home Company Among Top 5 Indian Internet Cos.
  • 7. Types of Deal StructuresEquity Structure – 3-5 years of ad spends : Exchanged for EquityAsset Structure – 2-3 years of ad spends: Exchanged for AssetsPerformance Contracts Structure – 1-2 years of ad spends : Performance Based
  • 8. Business Structure I – Equity Listed Brand Capital Deal 33% in cash 67% in equity “Pay as you go" with every ad 7
  • 9. Business Structure II – Real Estate Brand Capital Deal 33% in cash 67% in real “Pay as you go" estate asset with every ad 8
  • 10. Business Structure III – Numerator Brand Capital Deal 60% in cash 40% “Pay as you go" performance with every ad -linked 9
  • 11. Role of Brand Capital Contribution* Strategic Finance Advice 17%Strategic Marketing Direction 33% Brand Finance 50% 0% 13% 25% 38% 50%*Indicative ratios
  • 12. Challenges• Valuing equity of unlisted companies o Promoters high on expectations o Few benchmark transactions o Many PE funds, too few companies• Promoters reluctance to part with equity o Not comfortable with dilution o Equity most expensive funding• Exit routes of unlisted companies o Low demand for unlisted companies o IPO process stretched on implementation time• Corporate governance of unlisted companies o Promoters exposed to external investors for the first time o Corporate governance standards not up to speed
  • 13. Many Brands – One Brand Capitalwww.brandcapital.co.in 12
  • 14. Case Studies: SheCategory with players likeP&G and J&J, 99% adspends in TVShe Comfort is now ranked #3
  • 15. Case Studies: MCXPitted against well-established first moverMCX is now India’s #1 &Asia’s #4 Derivatives
  • 16. Case Studies: ThyrocareStart-up in a low-involvement, noadvertisement category
  • 17. Case Studies: Big BazaarHeavy competition, highinvestment category
  • 18. Case Studies: Mercedes BenzGrowing segment, newentrants
  • 19. Brand Capital – Scale• Portfolio 350+ companies with deal value of US$ 1 billion• Contributed between 15% of total BCCL ad revenue over the last 4 years• Proven success stories leading to repeat deals
  • 20. Investments by Industry 19
  • 21. Thank Youhttp://brandcapital.co.in/Please log on to the ‘Code of Conduct’ section on our website for details on our self regulatory policies.This presentation & ideas is the sole property of Brand Capital, a division of Bennett Coleman & Co. Ltd.It is solely for information purposes. No part of it may otherwise be reproduced, modified, circulated, ordisclosed without Brand Capitals prior written consent.

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