World Newspaper Congress 11: Session Opportunities, Ravi Dhariwal


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World Newspaper Congress 11: Session Opportunities, Ravi Dhariwal

  1. 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
  2. 2. Building Brands’ Capital Partnering Entrepreneurs Ravi Dhariwal THE TIMES OF INDIA
  3. 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. 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. 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. 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. 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. 8. Business Structure I – Equity Listed Brand Capital Deal 33% in cash 67% in equity “Pay as you go" with every ad 7
  9. 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. 10. Business Structure III – Numerator Brand Capital Deal 60% in cash 40% “Pay as you go" performance with every ad -linked 9
  11. 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. 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. 13. Many Brands – One Brand 12
  14. 14. Case Studies: SheCategory with players likeP&G and J&J, 99% adspends in TVShe Comfort is now ranked #3
  15. 15. Case Studies: MCXPitted against well-established first moverMCX is now India’s #1 &Asia’s #4 Derivatives
  16. 16. Case Studies: ThyrocareStart-up in a low-involvement, noadvertisement category
  17. 17. Case Studies: Big BazaarHeavy competition, highinvestment category
  18. 18. Case Studies: Mercedes BenzGrowing segment, newentrants
  19. 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. 20. Investments by Industry 19
  21. 21. Thank You 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.