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    Analysis again123 Analysis again123 Document Transcript

    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry INTRODUCTION S. V. Institute of Management 1
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 2 Advertising What is Advertising? Advertising is a non-personal form of promotion that is delivered through selected media outlets that, under most circumstances, require the marketer to pay for message placement. Advertising is, in fact, the most prominent and powerful medium in the present commercial world. It creates an entire world view, shaping our attitude and beliefs. Advertisements permeate every aspect of life and most of us are hardly aware of it. it largely depend on how an individual bring works and so utmost care is taken to exploit the emotions that play an important role in establishing a firm memory of an advertisement and predisposing the consumers to buy the brand that is being advertised. Over a period of time, advertising has been undergoing morphing changes slowly and steadily with multi-facet approach. Advertising has long been viewed as a method of mass promotion in that a single message can reach a large number of people. But, this mass promotion approach presents problems since many exposed to an advertising message may not be within the marketer’s target market, and thus, may be an inefficient use of promotional funds. However, this is changing as new advertising technologies and the emergence of new media outlets offer more options for targeted advertising. Advertising also has a history of being considered a one-way form of marketing communication where the message receiver (i.e., target market) is not in position to immediately respond to the message (e.g., seek more information). This too is changing. For example, in the next few years technologies will be readily available to enable a television viewer to click a button to request more details on a product seen on their favorite TV program. In fact, it is expected that over the next 10-20 years advertising will move away from a one-way communication model and become one that is highly interactive. Another characteristic that may change as advertising evolves is the view that advertising does not stimulate immediate demand for the product advertised. That is, customers cannot quickly purchase a product they see advertised. But as more media outlets allow customers to interact with the messages being delivered the ability of advertising to quickly stimulate demand will improve. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 3 Advertising Features By looking into the meaning and definition of advertising we can sum up the following features of advertising.  Non- personal presentation of message: In advertising there is no face-to-face or direct contact with the customers; it is directed to the prospective buyers in general.  Paid form of communication: In advertising the manufacturer communicates with prospective customers through different media like, newspapers, hoardings, magazines, radio, television etc. He has to pay certain amount for using some space or time in those media.  Promotion of product, service or idea: Advertisement contains any message regarding any particular product, service or ever an idea. It makes people aware about the product and induces them to buy it.  Sponsor is always identified –The identity of the manufacturer, the trader or the service provider who issues advertisement is always disclosed.  Communicated through some media- Advertisements are always communicated through use of certain media. It is not necessary that there will be just one medium. All the media may also be used. Types of Advertising If you ask most people what is meant by “type” of advertising, invariably they will respond by defining it in terms of how it is delivered (e.g., television ad, radio ad, etc.). But in marketing, type of advertising refers to the primary “focus” of the message being sent and falls into one of the following four categories: Product-Oriented Advertising Most advertising spending is directed toward the promotion of a specific good, service or idea, what we have collectively labeled as an organization’s product. In most cases the goal of product advertising is to clearly promote a specific product to a targeted audience. Marketers can accomplish this in several ways from a low-key approach that simply provides basic information about a product (informative advertising) to blatant appeals that try to convince customers to purchase a product (persuasive advertising) that may include direct comparisons between the marketer’s product and its competitor’s offerings (comparative advertising). However, sometimes marketers intentionally produce product advertising where the target audience cannot readily see a connection to a specific product. Marketers of new products may follow this “teaser” approach in advance of a new product introduction to prepare the market for the product. For instance, one S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 4 week before the launch of a new product a marketer may air a television advertisement proclaiming “After next week the world will never be the same” but do so without any mention of a product or even the company behind the ad. The goal is to create curiosity in the market and interest when the product is launched. Image Advertising Image advertising is undertaken primarily to enhance an organization’s perceived importance to a target market. Image advertising does not focus on specific products as much as it presents what an organization has to offer. In these types of ads, if products are mentioned it is within the context of “what we do” rather than a message touting the benefits of a specific product. Image advertising is often used in situations where an organization needs to educate the targeted audience on some issue. For instance, image advertising may be used in situations where a merger has occurred between two companies and the newly formed company has taken on a new name, or if a company has received recent negative publicity and the company wants to let the market know that they are about much more than this one issue. Advocacy Advertising Organizations also use advertising to send a message intended to influence a targeted audience. In most cases there is an underlying benefit sought by an organization when they engage in advocacy advertising. For instance, an organization may take a stand on a political issue which they feel could negatively impact the organization and will target advertisements to voice their position on the issue. Public Service Advertising In some countries, not-for-profit organizations are permitted to run advertisements through certain media outlets free-of-charge if the message contained in the ad concerns an issue viewed as for the “greater good” of society. For instance, ads directed at social causes, such as teen-age smoking, illegal drug use and mental illness, may run on television, radio and other media without cost to organizations sponsoring the advertisement. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 5 Objectives of Advertising You have learnt that the main purpose of advertising is to communicate massage or information to the customers. But while communicating such message or information it also serves purposes beneficial for the sponsor or advertiser. Let us look into the various objectives of advertising. i. To educate customers Can you remember the advertisement of Dandi Namak on television? In this advertisement it is said that Dandi Namak is good for health as it contains Iodine. This message educates you that iodine is good for health and Dandi Namak contains iodine. ii. To create demand for new product You read in newspaper that a new type of pen called ‘Gel pen’ is introduced in the market, which is very economical and convenient in writing. This motivates you to buy the said pen. Similarly, many students like you shall also buy gel pen after coming to know about it through advertisement. This will create a demand for the new product launched in the market. iii. To retain existing customers You might remember that Nirma washing powder was a very popular detergent. But, after Wheel powder came to the market the sale of Nirma suddenly decreased. Then the manufacturers of Nirma improved the product and advertised about the same in different media. After knowing this the persons who were earlier using Nirma did not switch over to Wheel and continued using Nirma. In this manner Nirma sustained its existing demand. Thus, advertising helps the manufacturers not only to create a demand for a new product but also to retain the existing customers. iv. To increase sales We have learnt that advertising creates demands for new products and sustains the demand of old one. Thus, with increase in demand, the sale of the product also increases. v. To assist salesman In most advertisements the salient features of a product, its qualities and its uses are expressed in detail. This assists a salesman to sell the product quickly without spending time in explaining and conniving the customer. Institutions involved in field of Advertising Management The concept of markets and consumer will be use interchangeably to refer to any classification of individuals, organization, or groups the advertiser is attempting to reach or “get a message to” S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry Figure 1.1 Markets and consumer behavior Facilitating Institution Control Institutions Advertising Agency Government Advertiser Media Competition Research Supplier Markets and consumer behaviour S. V. Institute of Management 6
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 7 Figure 1.2 Media of Advertising Print Media Print media is a very commonly used medium of advertising by businessman. It includes advertising through newspaper, magazines, journals, etc. and is also called press advertising. Newspapers You must have read Newspapers. In our country newspapers are published in English, Hindi and in other regional languages. These are the sources of news, opinions and current events. In addition, Newspapers are also a very common medium of advertising. The advertiser communicates his message through newspaper which reaches to crores of people. • Advantages i. Newspapers normally have wide circulation and a single advertisement in the newspaper can quickly reach to a large number of people. ii. The cost of advertising is relatively low because of wide publication. iii. Generally newspapers are published daily. Thus, the same advertisement can be repeated frequently and remind reader everyday. iv. The matter of advertisement can be given to newspapers at a very short notice. Even last minute changes in the content is also possible. This makes advertising quite flexible. v. Newspapers are published from different regions and in different languages. Hence, they provide greater choice to advertisers to approach the desired market, region and readers through local or regional language S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry • 8 Limitations i. Newspapers are read soon after they are received and then are kept generally in some corner of the houses. After 24 hours we get a fresh newspaper and this makes the life of the newspaper short. ii. People read newspapers mainly for news and pay casual attention to advertisement. iii. Illiterate persons can not read and thus, newspapers advertising does not benefit them. Periodicals Periodicals are publications which come out regularly but not on a daily basis. These may be published on a weekly, fortnightly, monthly, bimonthly, quarterly or even yearly basis. For example you must have come across magazines and journals like Onlooker, India Today, Frontline, Yojana, Swagat, Femina, etc. published regularly in English, Grihasobha, Nandan and Champak in Hindi. Similarly there are also periodicals in Hindi and other regional languages. All these periodicals have a large number of readers and thus, advertisements published in them reach a number of people. • Advantages i. Periodicals have a much longer life than newspapers. These are preserved for a long period to be referred in future or read at leisure or read again, whenever required. ii. Periodicals have a selected readership and so advertisers can know about their target customers and accordingly selective advertisements are given. For example, in a periodical like Femina, which is a magazine for women, advertisements related to products to be used only by males are rarely published. However, manufacturers of products and services to be used by females prefer to give advertisement in this magazine. • Limitations i. Advertising in periodicals are costlier. ii. The number of people to whom the advertisements reach are small in comparison to newspapers. iii. The advertisement materials are given much in advance, hence last minute change is not possible. This reduces flexibility. Electronic Media This is a very popular form of advertising in the modern day marketing. This includes Radio, Television and Internet. Let us look into detail about these. Radio Advertising All of us are aware about a radio and must have heard advertisements for various products in it. In radio there are short breaks during transmission of any S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 9 programme which is filled by advertisements of products and services. There are also popular programmes sponsored by advertisers. (One of the longest run programme in Radio was a sponsored programme started as “Binaca Geetmala” and later renamed as “Cibaca Geetmala”. It was sponsored by Hindustan Ciba-Geigy Limited for its products like toothpastes, toothpowders and tooth brushes and it continued for a period of 30 years on a weekly basis). • Advantages (i) It is more effective as people hear it on a regular basis. (ii) It is also useful to illiterates, who can not read and write. (iii) There are places where newspapers reading may not possible, but you can hear radio. For example, you can hear radio while traveling on road or working at home; but you can not read newspaper. Similarly, while driving you can hear a radio but cannot read a newspaper. • Limitations (i) A regular listener may remember what he has heard. But, occasional listeners tend to forget what they have heard in Radio. (ii) The message that any advertisement wants to communicate may not be proper as there is no chance to hear it again immediately. There may be some other disturbances that distort communication. (iii) In comparison to Television, Radio is less effective as it lacks visual impact. Television Advertising With rapid growth of information technology and electronic media, television has topped the list among the media of advertising. TV has the most effective impact as it appeals to both eye and the ear. Products can be shown, their uses can be demonstrated and their utilities can be told over television. Just like radio, advertisements are shown in TV during short breaks and there are also sponsored programmes by advertisers. • Advantages (i) It is most effective as it has an audio-visual impact. (ii) With catchy slogans, song and dance sequences, famous personalities exhibiting products, TV advertising has a lasting impact. For example, who can forget Aamir Khan saying “ Thanda Matlab Cocacola” or Sachin Tendulkar in Pepsi advertisement. (iii) With varieties of channels and programmes advertisers have a lot of choice to select the channel and time to advertise. (iv) With regional channels coming up any person even illiterates can watch the advertisements and understood it by seeing and hearing. • Limitations (i) TV advertisements are usually expensive to prepare as well as to telecast. Advertising S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 10 (ii) With almost every manufacturer trying to communicate their message through TV advertising the impact among the viewers is also reducing. Now-a-days people are switching on channels whenever there is a commercial break. Internet Are you aware about internet? Infact it is the latest method of communication and gathering information. If you have a computer and with an access to internet you can have information from all over the world within a fraction of second. Through internet you can go to the website of any manufacturer or service provider and gather information. Sometimes when you do not have website addresses you take help of search engines or portals. In almost all the search engines or portals different manufactures or service providers advertise their products. • Advantages (i) Information from all over the world is made available at the doorsteps. (ii) User can see the advertisement at their own time and as per their requirement. • Limitations (i) It is not accessible without a computer. (ii) It is not very suitable for general public. (iii) It is not suitable for illeterate and those having no knowledge about the operation of Internet. Other Media All the media of advertising discussed above are mostly used by consumers while they are at home or inside any room, except radio and newspapers or magazines to some extent. Moreover in all these media, the consumer has also to spend some money to access the advertisement. However, there are other media available, where the consumer has to spend nothing and he can see such advertisements while moving outside. Some of such advertising are hoardings, posters, vehicular displays, gift items, etc. Hoardings While moving on roads you must have seen large hoardings placed on iron frames or roof tops or walls. These are normally boards on which advertisements are painted or electronically designed so that they are visible during day or night. The advertisers have to pay an amount to the owners of the space, where the hoardings are placed. Posters Poster are printed and posted on walls, buildings, bridges etc to attract the attention of customers. Posters of films which are screened on cinema halls are a common sight in our country. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 11 Vehicular displays You must have seen advertisements on the public transport like buses, trains, etc. Unlike hoardings these vehicles give mobility to advertisements and cover a large number of people. Gift Items from manufacturers When you buy a cycle, the shopkeeper sometimes gives you a key ring to hold the cycle key. Some jewelers give small purse or boxes when you buy a jewellery. Sometimes manufacturers gives diaries, calenders, purse, etc. to buyers and prospective customers. In all these items the name, address and telephone number of the manufacturer, or trader or service provider as well as descriptions of the products in which they deal in are printed. These items are normally items of daily use given freely to the customers. While using, the user remembers the products as well as the producer. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 12 Global Scenario Impact on Supply and raw material side Newsprint prices in CY2008 have already risen 10-12% Indian companies, over the last several years, have been able to purchase imported newsprint (largely from North America) at competitive prices owing to a positive supply scenario (vast capacities created by international newsprint manufacturers), declining demand in UK and parts of Europe and strong push by Chinese newsprint companies into the Indian market. But, the scenario has now changed. At the beginning of CY2007, global demand for newsprint was 38.3mn tons while the global supply was at 40.5mn tons - a surplus of 2.2mn tons. However, by the end of 2007, several mills closed down resulting in a shortage of 2mn tons taking the prices up. Newsprint prices in CY2008 have already risen 1012% to US $640MT levels with more hikes anticipated in the near future. We attribute the sharp rise in global newsprint prices to the following factors: Capacity rationalisation in North America In CY2007, the North American newsprint market was suffering from a large demand-supply gap keeping the prices under check. However, owing to the merger of Abitibi and Bowater to create AbitibiBowater, the largest North American newsprint producer accounting for almost 50% marketshare, this gap has vanished. The merged entity announced closure of the 600,000 ton/year of capacity as a part of its rationalisation plan and effected a price hike of US $60/ton for 1QCY2008. Further, Catalyst Paper acquired AbitibiBowater's 375,000 ton/year Snowflake mill capacity resulting in an equation where the Topfive newsprint producers now account for over 80% of the newsprint capacity in the North American market. The Chinese equation The Chinese suppliers, who were aggressively selling to the local buyers, have pulled out as recycled newspapers, the primary raw material for recycled newsprint, is in short supply. Old News Print (ONP), one of the main raw materials for recycled Chinese newsprint has seen an increase in price ranging from $130 to $270 per ton, in the last 5-6 months. Domestic consumption in China has also gone up owing to the run-up to the Beijing Olympics. Rising crude prices High crude prices at US$100-105 per barrel are pushing up freight rates as well as the cost of production of newsprint, a highly energy-intensive process. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 13 After bottoming out in July 2002 at US $430MT, newsprint prices were on a steady rise for almost four years and peaked at US $640MT levels in July 2006. The rise in newsprint prices during the period was attributed to steady demand and cost push inflation. In FY2008 however, most Print Media companies reaped the benefits of lower newsprint costs on account of the dual benefit of declining newsprint prices and rising Rupee. Newsprint prices to stabilize post 2HCY2008 We expect newsprint prices to remain firm and rise to higher levels in the near term. However, we note that newsprint demand in the US, the largest consumer, has declined by 10.8% yoy in CY2007 and is expected to remain subdued. Besides, the strong domestic demand in China is more of a transitory phenomenon and is likely to witness moderation in 2HCY2008 leading to better supply situation. We have modeled in a 24% cumulative hike in newsprint prices over the next two years For our Print Media universe, we have modeled in an 18% rise in newsprint prices in FY2009E from $600/ton as a base case followed by a 6% jump in FY2010E. Our Sensitivity Analysis indicates the impact of an additional 100bp rise on EBITDA and PAT on our base case assumptions for the different companies. We believe HT Media is the most sensitive to newsprint price hikes owing to its large circulation base, higher use of imported newsprint and higher pagination compared to its peers. Rising cost pressures likely to lead to industry consolidation If newsprint price hikes sustain at this rapid pace for another few quarters, we believe the smaller publishers, which largely depend on circulation revenues, will likely witness sharp erosion in profitability rendering their business model unviable. The large newsprint publishers are in a better position to absorb the hikes owing to their strong Margin profile, high Operating leverage and ability to garner high amount of advertising revenues. Moreover, most large publishing companies have strong cash flows and balance sheet, which gives them the additional advantage to explore acquisition opportunities, which arise due to changing business dynamics. We believe the Newspaper publishing companies are likely to use a combination of counter-strategies to mitigate the impact of rising newsprint prices to protect their Margins and remain competitive. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 14 Indian Advertising India is an immerging market and Indian advertising has remained robust despite the signs of sluggishness. The field of advertising has progressed in leaps and bonds; today, it is much more than a few printed lines or more pictures with some printed text. It is like a kaleidoscope exhibiting different perspectives enthralling, sundry and real. Advertising provides a free rein to the art of persuasion, adapting itself to changes with passing time. Indian advertising is a vast field where new trends are continuously emerging everyday. The language used in the advertisement is influenced by many sociological factors like market, politics, sports, and games, rural market, religious and education. The use of English words in between Hindi words or Multilanguage to create a ‘special effect’ is becoming a fashionable trend it is more accessible to all. The Amul ads were one of the first to use Hinglidsh to great effect “Amul Big boss of Makkans”. Practice of Multilanguage an d translated syntax like Fruit salad ehk minute main or Ek dum fit appeals to people of all regions across the country, as it simplifies the language. Thus, the trend of using Hinglish is gaining prominence and emerging as a language most suited for Indian advertising and the fact that brand ambassador like Amirkhan speaks this language in the ad reflects the confidence of the advertiser. Indian consumer has developed a treatment for the swift transformation that has taken place in the strategy and presentation of ads. With the development of print media, radio and television, advertising also score high and various media strategies are now employed to meet different advertising needs. Proper research is carried out to significantly reduce the risk involved in advertising task, and improved the potential of the creative vehicle and the actual performance in the market. All these have the potential to influence our rational consideration for making purchase Brand ambassador are used by companies to attain some definite objectivity. Seeing his favorite celebrity in an advertisement motivates the consumer to use the product. In the current scenario, companies are experimenting with novel techniques to attract consumers. They are constantly looking at new apertures to market. Today, online marketing and mobile marketing growing at rapid speed targeting the ever increasing number of Indian web users in all possible promising ways. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 15 History Advertising is attracting the interest of the public towards the goods and services by endorsements which are performed with the help of a range of media. It is an important part of an overall marketing strategy. Advertising is frequently considered as the compensated, public endorsement of a cause, proposal, product, or service by a branded supporter endeavoring to inform or influence a particular target audience. Advertising has adopted many dissimilar forms since the initial period of time. Examples of this were discovered by archeologists’ ancient wall paintings announcing fights of gladiators. They also discovered paintings on rocks that were used to advertise commodities. At the commencement of advertising, it was simply a proclamation or an announcement; an example of which is, the businessmen in early Egypt made use of caries to proclaim or announce the arrivals of ships along with the arrivals of cargo. Evidence has been discovered by archaeologists of the fact that advertising, outdoor display was the first to be recognized. This outdoor advertising was normally in the form of an attractive sign which was painted on a building wall. The archaeologists have discovered quite a few signs, particularly at sites like ancient ruins and caves. Some of these messages were signs relating to certain real estate for purchase or rent and somewhere signs trying to bring to the notice of travelers the availability of guest house located at another location. It was discovered that in the era relating to the middle ages, the use of word-ofmouth to express approval and administration for products, led to generation of an elementary but powerful form of advertising. The people who performed word-ofmouth services were called caries and they were citizens who were responsible for reading out public notification. This people were also haired by traders to shout out and express approval and admiration of their articles which were being offered for sale. Latter on this people become a regular feature on the streets of various colonial settlements. These ordinary town criers were the people who gave rise to the concept of the current day announcer who presents radio and television commercials. Before the development of print media, carving on the rocks and pillar, and hawking were the means of advertisement. Rajas and maharajas royal orders were displayed as fresco or work embedded in the wooden planks. The religious messages inscribed on the Stupas in Sanchi are examples of such advertising. The origin of Hindi advertisement is not known or cannot be stated as clearly. Nearly, some two thousand years back during the reign of Kumar Gupta, Indian Merchant’s Slik clothes weaver’s cooperative association had in described an advertisement in the form of a poem on a wall of a sun temple in Dasapur (now called as Madsour in MP) which is consider as one of the oldest advertisement in the world. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 16 The practice of using trade mark is seen ancient civilization also. With the development of civilization , robust changes are seen in advertising also.hordings and signage seen near bus stop and at the back of the vehicle are the developrd version of information or messages with the trade mark on the wooden planks, frescos, metallic plates or stones use in the olden days. Researchers revgeal that earlier hawking was also one of the popular medium of advertising. Hawkers use to cry out the quality of their products In a musical way to attract people in the states and lanes. Who can forget this popular jingle, which touch the heart and leave an evergreen print in the minds of the mass ? “babu mein laya majedar chananchor garam, mera chana bana hai aala……” yes, hawkers had a very unique musical style of magnetizing people an popularizing their products. The prospective of advertising escalated when manual press was invited in the 15th century. After that the demand has been increasing. India’s first newspaper Bengal Gazette most published on June 29, 1780, where four pages were set aside exclusively for including ads, mostly of East India companies. During the period success of the newspaper depend largely on the financial help received from the advertisement published on it. Neither during the time of East India company not during the British reign advertising was given much significance. Government advertisement contained only vacancies and tender notices. If they were any other advertisement then they published in the government gazette whose circulation was very limited and so was far above the reach of the common people. Earlier, agencies were working a single sided basis and were not much interested in criticism or views and response from others. The spread of jingoistic feeling and xenophobic attitude was echoing in the advertisement published after 1902. for example the ad Poorn Bharatya parentu aayuthith bootom thatha jootham ke samaan ( totally Indian but equal to imported boots and shoes) was published by Sttewart factory , Agra. To popularized product identity, various properties of the products were elaborate using idioms and phrases that helped to showcase them in a better way. The use of idioms and phrase was an added advantage to create a strong identity for the product. Superior visual and portraits were used in advertisement published after 1954 which targeted the larger consumers over a larger geographicalal area. During the mid 1980s advertisement having a poetic style became very popular. Advertisers were using language enriched with theoretical devices, which differed from the ordinary course of idea and subsequently generated larger upshots. With the availability of products increasing manifold, modern Indian consumers are moving towards experimenting conspicuous consumption The consumer buys a produce most probably because the consumer identifies a requirement or want for it. The consumer makes decision with respect to the brand to be purchased and whom it is to be purchased from. The knowledge of their options and an assessment of the alternative have an effect on the consumer’s decisions. Up to the 20 th century, the main intension behind the advertising was only to transmit the information. But, on the one brand, the effort S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 17 behind contemporary advertising is to “generate a demand” by manipulating the apparent wants or need or wish of the buyer. In primeval times, the most widespread type of advertising was done by word-of-mouth. On the other hand the message of the commercial nature and displays of the political campaigns have been found in the ancient ruins of the countries like Egypt. Along with this other messages, sales messages and wall posters had also been found in the ruins of Egypt. Similarly, messages and pertaining to lost and found contain were a common from of advertising in the primeval times in countries like Rom and Greece. Painting on the walls and rocks for the purpose of the commercial advertising is another demonstration of an early from of media advertising, which still can be found to exit in quit few parts of Asia and Africa. Even though pictorial type of advertising becomes visible early on history, printed advertising made slight progress until the innovation of the printing press. With the development of the printing press, printing also expended and developed, particularly during the period of the 15th as well as 16th centuries During this period, advertising developed and went on to incorporate handbills. Latter on the period of the 17th century advertisement began to appear in the tabloids and newspapers. This initials advertisement in the print media was made use of primarily to endorse books and newspapers. These advertisements were economically priced, thanks to the advent of the printing press, and hence, such advertisements were very much affordable. During the period of the 19th century when the economy was growing at the frantic pace, the necessity for advertising was also expanded at an even pace. During this period, classify advertising started becoming accepted and gaining popularity. The newspapers were full of different types of products. The effectiveness of this type of advertising paved the way for mail order advertising in the form of catalogs. During the period of the 160s advertising started to advanced towards futuristic and a much more scientific process in which the artistic imagination was given to full scope to sparkle, creating totally new and creative messages, which in turn made advertising more attractive viewing for the consumers. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 18 Growth While making and appraisal about the effects of a new communication medium, almost every time there is ascertain amount of ambiguity as to the way it will advance and flourish. I is not at all possible to anticipated the definitive traits that will make it gel with popular culture. When something is new and one of the kinds, there is nothing else which can be use as the basis for our expectations and hence, comparison is made with the different types of media. For this reason, it becomes very hard to forecast and hypothesize, not only about the future operation of the technology, but also about the impression and impact it will have on culture lifestyle and also on society. Some channels of media are dependent on the revenue generated through advertising right from the inception, while others become the outcome of commercialization. it is the growth of each specific medium and the traits that describe than and that in turn impacts the way in which he advertising industry has developed. Each specific medium has an intrinsic quality of marketing and the part that the viewer plays inside the range of the text of an advertisement is connected with the provisions and the limitations of the medium. To understand the growth of advertising industry, it is necessary to understand the manner in which social development and political happenings have moulded the commercial media and, in turn influenced the progress and expansion of the advertising industry the time when the first commercial appeared on television. It is also necessary to distinguish the way in which the identification of the medium influences the message and also evaluate the sociological influence of current fashionable advertising. This industry boost because of big MNC in India. As we have seen that the retailing sector is booming this will again also support the advertising industry as the FMCG segment is the largest advertiser in Indian Advertising Industry, closely followed by the consumer durable segment and automobile industry. This industry has a 0.65% part of GDP growth. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 19 Indian Advertising Industry size As consumer wallets swell and companies slug it out to capture a larger share of these wallets, the advertising industry continues to make its importance felt registering a robust growth of 21.5%yoy in CY2007 to Rs195bn. Print Media continues to account for the largest share of the advertising pie at 48.1% registering a strong 20.5% yoy growth during the year. In terms of contribution to the total pie, both the traditional platforms viz., Print and Television are expected to converge in CY2011. Low ad spends relative to GDP, buoyant economic growth and high growth in new media platforms are expected to drive a steady 19.3% CAGR in revenues for the advertising industry during CY2007-11. It is sure that in near future the mode of advertising and the present method of advertising will be changed by different mode and modern technology. Up till now we see advertisement on television, print and radio. But now the scenario has changed. There are about 70-million cable & satellite homes, about 200 million newspaper readers and about 38-million users of internet in India. This breadth of mass media will give huge market for advertisement. India has about 350 million mobile phone users, this is also become a huge medium for this advertising industry. The Indian advertising today handles both national and international projects, the reason that the industry offers a host of functions to its clients that include everything form start to finish that include client servicing, media planning conceptualization, pre and post campaign analysis market research, marketing branding and public relation services keeping in mind the current pace at which the Indian advertising industry is moving the industry is expected to witness The launch of TV service, which was commercial in nature and sales reliant, was seen as a major boost for the advertising industry. During the period following the Second World War there was a very fast and strong growth in the economy of the S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 20 countries. This resulted in an increase in the levels of income and there was also an increase in production, which, in turn, led to the necessity of creating new markets. The commencement of TV advertising was considered to be one of the means by which it was possible to develop economy, the basis of which was competition. After the Second World War, TV advertising was considered to be a novelty and revolution and the people reacted very positively to advertising after the initial doubts and resistance. The conception of the advertisement, which were multisensory in nature brought a fresh lease of life to the advertising industry. But this did not mean that the basic modus operandi used was largely diverse from the fundamental techniques used for advertising in the print media. The important and unique fact was that even though the modus operandi was same TV advertising effectively communicated the marketing campaigns in a way that was stimulating both to the eyes as well as the ear and this was very new. Analysts argued that there was a basic connection in way prints as well as TV- based advertising campaign was created. They stressed that both the types of advertisement stressed the endorsement of concern, fright or want and the perception of product awareness. Analyst, however, also claim that in spit of being extremely effective; commercials in the print media are successful because they are very simple. But in being so, these commercials also are no table to convey the sequence of events and since they do not have the quality of narration, which is made available by the images with movement, print advertisements are less open in their ability to provoke emotions. Along with the fact that TV advertising had the multi- sensory feature the fact that truly separated it from advertising in cinemas was the fact that the nature of TV advertising was very domestic. Just like the newspaper, TV advertising had the capability of entering the pirate zone and aim for the people inside their homes. The idea of endorsing a brand name was thought to e the most vital in advertising during 1960s. During this period, the largest consumer groups were women and the priority of the advertisers was to attain loyalty towards their brand. The intention behind this was that with brand loyalty, they would not only be ale to create market for their brand but they would also retain the market from their competitors. Brands were considered to be a means of developing links that would help the consumer in associating the product with its packaging, the name of the product and the commercial technique of the product. Branding was successful in creating an intrinsic association connecting the product and the campaign. This association is allowed identification both on the screen and the off screen. On the other hand, in retrospection, some advertisements seem to be bit immature and prehistoric when they are compared to current examples, as advertisers placed enamors importance on the necessity of generating an exclusive brand but ignored the necessity to create a center of attention for the product. In contemporary society, we are inundated with media communication and continuously exposed to household disturbance. Therefore, it is imperative that S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 21 the advertisement itself compelling enough to stop us from switching channels or making use of the time brew a cup of tea. In the initial campaign of TV advertising, it was apparent that conveying the characteristics and advantage of product was essential and imperative. The result of this was a multitude of advertisement that gave accurate information. But for the consumer, the feel was like watching a documentary. Advertiser felt that a sense of truthfulness was vital in connecting the trust factor with a particular brand. For e.g., the advertisement campaign for products of domestic use like cleaning products would time and again shows professionals or experts and endorsing the qualities of the product so as to induce a sense of unbiased credibility for the product. Advertisement campaign for indulgences like chocolates and alcohol were associated with fancy desire and pleasurable feelings. The initial period was one of the setting up advertising standards, as and for that reason, bringing complication in to the area of play by bringing in components like comedy, was considered to be a risk. Retailers were seriously investing to promote their products on a commercial media outlet, which was still in the process of straying to prove its potential in area of marketing and also in the area of making profit. Hence, advertisers were at a distance and prefer to refrain them selves from being to experimental. Alternatively they prefer to ensure that the contain of advertisement was presented lucidly and accurately. During 1980sadvertising began to mirror more powerfully the economic principles of a spirited, liberated market. There was awareness that businesses would have to vie for customers, and advertisements of the time mirrored this. Advertisement developed and become more stylish, signifying to the observed the way in which the product be used. Advertisements started to endorsed lifestyle advertisement. Products became linked with particular kinds of populace or movement and would time and again be revealed only at the conclusion of an advertisement. Lifestyle advertisement depends on the desire of the viewer to acquire the qualities of the individual in the advertisement and for that reason they resorted to a resourceful method of aiming at specific collection of people. The latter period off the 1980s and the initial period of the 1990s witnessed the launch of cable television and what stood out in particular was MTV. Being the groundbreaker in the idea of the music video, MTV brought in an innovative style of advertising: the customer watches the channel with the intension of specifically watching the advertisement. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 22 Trends If we talk about present trend in this industry we could like simply say mind blowing. Today ads have made unique image in consumers mind. Earlier the ad was meant for general know for consumer but now it is all about MIND & HEART share. Today’s ads are made so creative and unique that it gave new birth to new concept “BRAND LOYAL” Like most areas of marketing, advertising is changing rapidly. Some argue that change has affected advertising more than any other marketing function. The more important trends in advertising include: Digital Convergence While many different media outlets are available for communicating with customers, the ability to distinguish between outlets is becoming more difficult due to the convergence of different media types. In advertising convergence, and more appropriately digital convergence, refers to a growing trend for using computer technology to deliver media programming and information. Convergence allows one media outlet to take advantage of features and benefits offered through other media outlets. For instance, in many areas around the world television programming is now delivered digitally via cable, telephone or satellite hookup. This delivery method uses the same principles of information delivery that is used to allow someone to connect the Internet. The convergence of television and Internet opens many potential opportunities for marketers to target customers in ways not available with traditional television advertising. For example, technology may allow ads delivered to one household to be different than ads delivered to a neighbor’s television even though both households are watching the same program. But convergence is not limited to just television. Many media outlets are experiencing convergence as can be seen with print publications that now have a strong web presence. The future holds even more convergence opportunities. These include outdoor billboards that alter displays as cars containing geographic positioning systems (GPS) and other recognizable factors (e.g., GPS tied to satellite radio) pass by or direct mail postcards that carry a different message based on data that matches a household’s address with television viewing habits Focus on Audience Tracking The movement to digital convergence provides marketers with the basic resources needed to monitor user’s activity, namely, digital data. Any media outlet that relies on computer technology to manage the flow of information does so using electronic signals that eventually form computer data. In simple form, electronic data is represented by either an “on” or “off” electronic signal. In computer language this is further represented by two numbers “0” and “1” and, S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 23 consequently, is known as digital information. All digital information can be stored and later evaluated. For media outlets delivering information in digital form, the potential exists for greater tracking and matching this with information about the person receiving the digital data. And tracking does not stop with what is delivered; it also works with information being sent from the customer. For instance, as we noted earlier, by clicking on their television screen viewers will soon be able to instantly receive information about products they saw while watching a television show. This activity can be tracked then used in future marketing efforts. Audience Concern with Tracking While media convergence offers marketers more options for tracking response to advertisements, such activity also raises ethical and legal concerns. Many consumers are not pleased to learn their activities are being monitored when they engage a media outlet. Yet consider the following examples of how marketers are tracking users: Television Viewing – As we noted, the advent of digitally delivered television allows cable, telephone and satellite providers to track user activity through the set-top boxes connected to a subscriber’s television. Future innovation will make the user television experience even more interactive and, consequently, open to even more tracking. • Television recording – The days of television videotape recording are quickly coming to an end, replaced by recording using computer technology. A digital video recorder (DVR), such as TiVo, can track users recording habits and, based on a viewer’s past activity, make suggestions for programs they may want to record. Additionally, advertising services can program the DVR to insert special advertisements within a program targeted to a particular viewer. • Internet Spyware – Downloading entertainment from the Internet, such as games, video and software, may contain a hidden surprise – spyware. Spyware is a special program that runs in the background of a user’s computer and regularly forwards information over the Internet to the spyware’s company. In some cases spyware keeps track of websites the user has visited. The information is then used to gain an understanding of the user’s interests, which then results in delivery of special ads when a user visits a certain site. • Ad Skipping and Blocking As noted above, television recording devices offer marketers tremendous insight into viewers’ habits and behavior. Yet from the consumer side, the DVR is changing how people view television programs by allowing them to watch programming at a time that is most convenient for them. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 24 Viewer convenience is not the only advantage of the DVR. The other main reason consumers are attracted to the DVR is their ability to quickly skip over commercials. Of course this presents major issues for advertisers who are paying for advertisements. As more DVR devices with ad skipping or even ad blocking features are adopted by mainstream consumers the advertiser’s concern with whether they are getting the best value for the advertising money becomes a bigger issue. Advertisers who feel frustrated with television ad-skipping may opt to invest their promotional funds in other media outlets where consumers are more likely to be exposed to an advertisement. Changing Media Choices There is a major cultural shift occurring in how people use media for entertainment, news and information. Many traditional media outlets, such as newspapers and major commercial television networks, are seeing their customer base eroded by the emergence of new media outlets. The Internet has become the major driver of this change. In particular, a number of important applications tied to the Internet are creating new media outlets and drawing the attention of many, mostly younger, consumers. Examples include: Podcasting Audio – This involves delivering programming via downloadable online audio that can be listened to on music players, such as Apple’s iPod. Many news websites and even other information site, such as blogs, offer free downloadable audio programming. • Podcasting Video – While audio downloading has been available for some time, the downloading of video to small, handheld devices, including cellphones, is in its infancy. Many television networks are now experimenting with making their programming available for download, albeit, for a fee. • RSS Feeds – This is an Internet information distribution technology that allows for news and content to be delivered instantly to anyone who has signed up for delivery. Clearly those registering for RSS feeds represent a highly targeted market since they requested the content. • Networked Gaming – While gaming systems have been around for some time, gaming systems attached to the Internet for group play is relatively new and becoming more practical as more people move to faster Internet connections. This type of setup will soon allow marketers to insert special content, such as advertising, within game play. • For marketers these new technologies should be monitored closely as they become accepted alternatives to traditional media outlets. While these technologies are currently not major outlets for advertising, they may soon offer such opportunity. As these technologies gain momentum and move into mainstream acceptance marketers may need to consider shifting advertising spending. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 25 Marketers should also be aware that new media outlets will continue to emerge as new applications are developed. The bottom line for marketers is they must stay informed of new developments and understand how their customers are using these in ways that may offer advertising opportunities S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 26 Future The path that lies ahead for advertising being unpredictable, it is difficult to forecast and it depends very strongly on the trends in the media usage. The discovery of new technologies and the provision of these technologies as a podium on which to advertise, help to affect the way in which potential consumers associate with advertising. the to find out more about specific products on television by just pressing a button on the remote or using a mouse to click on an advertisement banner on the internet is the ultimate desire of a marketer. The announcement of mobile majors about the offer o put up the market airtime for advertising on its network was done with a plan to offer advertisers an express channel, which is significantly on a come back trail. Marketing activities with the help of internet created new boundaries for the advertisers and this opened the gates for the dotcom era to grow by leaps and bounds. Major corporations functioned singularly on the revenue generated from advertising, making a vast variety of offers ranging from internet recharge coupons to non chargeable access to thee internet. When the customer uses a mobile phone, watches digital television or advertisements on the on internet, he or she gets an opportunity to get directly associated with the product. This was not possible with the earlier print-based media and the media campaigns in the broadcasting media, which was one-way transmission only. On the other hand, the internet offers options like a website for the promotion of products, which, in turn,, develops additional interest in the product, a registration from that offers a free trial or sample or even the option to make an immediate purchase transaction on the internet. By this, we can see that the electronic media enable direct, immediate a collaborative communication between the customer and the seller/producer. With the emergence of the internet, a number of new advertising opportunities which are able to instantly attract the attention of the consumer and encourage interaction have been generated. With each passing year, bigger amounts are being paid so as to acquire a commercial spot durig world-famous spectacular event. An example of this is Football World Cup event, which by any measure, is considered to be the most major and the most significant football event of the relevant or particular year. Also, with the demand for advertising, there will also be an increase in the demand for advertising that is entertaining. in the case of this type of advertising, some consumers may be fond of a particular advertisement to such an extent that they would want to watch the advertisement late or they may want to show the commercial to a friend, particularly since the rise of “entertaining” advertising. On the whole, the advertising population has not yet been able to make this very simple even though some of them have started using the internet to spread extensively their advertisement to any person who is willing and wishing to see or hear the commercials. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 27 Another noteworthy and important trend for the future of advertising is the increasing significance of niche advertisement or in other words, targeted advertisement. This concept has generated mainly because of the emergence and the popularity of the internet. Advertiser will have an ever-increasing capacity to get in touch with constricted viewers. In the past, probably the most resourceful technique to convey a message was to cover the biggest mass market audience that was actually possible. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 28 Advertising Agencies “Ad agencies in India today are scared of their clients. Its time they make clients understand the two are partners who have only one Client: the Consumer ‘ - Piyush Pandey , Creative Director, O & M A unique aspect of advertising is advertising agency, which in most cases, makes the creative and media decision. The first advertising agent Volney B. Palmer, establish an office in Philadelphia in 1841.for 25 per cent of cost he sold space to advertisers in the various 1400 newspaper through out the country. By the turn of the century, agencies started to focus their attention on the creation of advertising for clients. Probably the first agency with a reputation for a creative work was Lord and Thomas with two remarkable copywriters, John E. Kennedy and Claude Hopkins. Kennedy believed that advertising was “salesmanship in print” and always tries to provide the reason why people should buy the advertiser goods. Organization handles advertising in different ways. In small companies, advertising is handled by someone who is in the sales or marketing department. A large company will often set up its own department, whose manager reports to the wise president of marketing. To perform all the advertising activities there are different advertising agencies. Different agencies have different policy and criteria for its client and they create competitive edge on that basis only. Function of Advertising Agencies Professionals at advertising agencies and other advertising organizations offer a number of functions including: Account Management – Within an advertising agency the account manager or account executive is tasked with handling all major decisions related to a specific client. These responsibilities include locating and negotiating to acquire clients. Once the client has agreed to work with the agency, the account manager works closely with the client to develop an advertising strategy. For very large clients, such as large consumer products companies, an advertising agency may assign an account manager to work full-time with only one client and, possibly, with only one of the client’s • S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 29 product lines. For smaller accounts an account manager may simultaneously manage several different, though non-competing, accounts. • Creative Team –The principle role of account managers is to manage the overall advertising campaign for a client, which often includes delegating selective tasks to specialists. For large accounts one task account managers routinely delegate involves generating ideas, designing concepts and creating the final advertisement, which generally becomes the responsibility of the agency’s creative team. An agency’s creative team consists of specialists in graphic design, film and audio production, copywriting, computer programming, and much more. • Researchers – Full-service advertising agencies employ market researchers who assess a client’s market situation, including understanding customers and competitors, and also are used to test creative ideas. For instance, in the early stages of an advertising campaign researchers may run focus group sessions with selected members of the client’s target market in order to get their reaction to several advertising concepts. Researchers are also used following the completion of an advertising campaign to measure whether the campaign reached its objectives. • Media Planners – Once an advertisement is created, it must be placed through an appropriate advertising media. Each advertising media, of which there are thousands, has its own unique methods for accepting advertisements, such as different advertising cost structures (i.e., what it costs marketers to place an ad), different requirements for accepting ad designs (e.g., size of ad), different ways placements can be purchased (e.g., direct contact with media or through third-party seller), and different time schedules (i.e., when ad will be run). Understanding the nuances of different media is the role of a media planner, who looks for the best media match for a client and also negotiates the best de Types of Advertising Agencies Full service Agencies A full service agency is one that includes the four major staff function-account management, creative service, media planning and buying and accounting planning, which is also known as research. A full service advertising agency will also have its own accounting department, a traffic department to handle internal tracking on completions of project, a department for broadcast and print production (usually organized between creative departments) and a human resource department. Specialized Agencies Many agencies do not follow the traditional full service approach. They either specialize in certain function (writing copy, producing art, or media buying) audiences (minority, youth) or industries (health care, computers, agriculture and S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 30 business to business communication. In addition there are specialized agencies in all marketing communications areas, such as direct marketing, sales promotion, public relations, events and sports marketing and packaging and point of sale. Industry Focused Agencies Numerous agencies concentrated on certain fields or industries such as agriculture, medicine and pharmaceuticals, health care and computers. These agencies handle a variety of client from within that field, so they are able to apply their particular expertise in those areas, making them essential full service. Minority Agencies Agency that focuses on ethic group or minority agencies is minority agency. This agencies are organized in much the same way as full service agency ,but they as specialize in reaching and communicating with their particular market. Creative Boutiques Creative boutiques are advertising agency, usually small (2 or 3 people to a dozen or more) that concentrate entirely on preparing the creative execution of client marking communications. The focus on the organization is entirely on idea, the creative product. A creative boutique will have one or more writer for artist in staff. There is no staff for media, research, or strategy planning. typically this agencies can prepare advertising to run in print media out doors and on radio and T.V. creative boutique usually serves companies, but it sometimes retain by advertising agencies when they are overloaded with work. Media-buying Service Media-buying Service specializes in the purchase of media for clients. They are in high demand for any reasons but three reasons stand out. First, media has become more complex. As the no. of choices grows-think of the proliferation of new cable channels, magazines and radio stations. Second, the cost of the maintaining of competitions media department has escalated. Third, media buying services offer by media at a low cost because they can group several client purchases to gather to develop substantial buying power. Virtual Agencies Virtual agency is agency that operates as group of freelancers and is paid accordingly. This type of agency does not use conventional office space. The advertising agency is a representative between media and advertiser. A major roll of the advertising agency is the purchase of media time and space. Advertiser Agency Research Suppliers S. V. Institute of Management Media
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry Advertiser Agency 31 Media Research Suppliers Large companies, at each levels of advertiser, media and agencies will have their own internal research department, and each will also be purchasing data externally from some outside research supplier. An advertising agency is a firm that specializes in the creation, design, and placement of advertisements, and in the planning and execution of promotional campaigns for products and services of their client The basic techniques that is adopted by different advertising agency are  Basic appeals  Attention getting headline  Slogans  Testimonials  Product characteristic.  Comparison of product  Repetition Some of the famous advertising agencies in India are as bellow. 1. Ogilvy & Marther Pvt. Ltd. ( O&M) 2. J.Walter Thompson Association Ltd. (JWT) 3. Mudra Communications 4. FCB-Ulka Advertising Ltd. 5. Rediffusion – DY&R 6. Mccann Erickson (India) Ltd. 7. R K Swamy/BBDO Advertising Pvt. Ltd. 8. Grey World Wide 9. Leo Burnett India Pvt.Ltd. 10. Contract Advertising (India)Ltd. That’s why for effective agency follows the below procedure and pays complete concentration on it.  Research  Media selection  Creative work  Production S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 32 Indian Media and Entertainment Industry The Indian Entertainment and Media Industry have out-performed the Indian economy and is one of the fastest growing sectors in India. It is rising on the back of economic growth and rising income levels that India has been experiencing in the past years. This is significantly benefiting the entertainment and media industry in India as this is a cyclically sensitive industry and it grows faster when the economy is expanding. An add ed boost to the entertainment and media industry in India is from the demographic point of view where the consumer spending is rising due to increasing disposable incomes on account of sustained growth in income levels and reduction of personal income tax over the last decade. The Indian Media market has been on an upswing in the last 5 years and 2007 has been no exception. What is even more heartening is that the estimates in the TYNY 2007 report, which looked very ebullient at the time, have been met. New media have grown at high rates in line with their expected potential. However, traditional media have not been disadvantaged by this, and they have continued to show strong growth, though their share of the total media pie has expectedly shown a slight dip. The main reasons for this are:  Willingness of emerging advertisers to pay for impact  Expansion of traditional media into new markets and formats, which is helping them demand value  A strong business environment that supports this growth Increase in advertisers’ spends on traditional media to maintain status quo and their willingness to look at new media (which also tend to be cheaper options) to create differentiation and grab attention Shift in focus from conventional target consumers (Housewife, aged 25-45 years), to include the Male and the Youth, who are the primarily being targeted through new mediums like Mobile and Internet, and Radio and Niche Publications. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 33 The current size of the industry as a whole is estimated at US$ 7 billion in 2004 and is expected to grow at a CAGR of 14 per cent to US$ 13billion by 2009. The Filmed Entertainment and Television segment dominate the industry followed by the Print, Radio and the Music segments. Inner circle represents shares in 2004 and outer circle represents projected shares in 20 Indian Media and Entertainment Industry Size Over the last several years, Indian Media & Entertainment (M&E) Industry has consistently out performed most other sectors in terms of growth. Standing tall at an estimated size of Rs. 513bn in CY2007, it is expected to continue to grow at a S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 34 steady pace of 18.3% CAGR during CY2007-11.While traditional segments like Television and Print continue to account for the largest shares of the overall pie, it is emerging segments like Internet advertising, Radio and Animation and Gaming, which are expected to register higher growth. In terms of size, we believe that the Indian M&E industry has just touched the tip of the iceberg. In CY2007, the Indian M&E Industry accounted for a mere 0.9% of the Global M&E Industry, which stood at US $1,432bn and is expected to grow at a CAGR of 6.6% over CY2007-2011. A buoyant economy and extremely favorable demographics are the two key macro-economic constituents on which the Indian Media industry stands today. Media Industry generally tends to exhibit cyclical nature wherein it grows faster when the economy is buoyant and we believe the time is right for the Media industry to bask in the glory of India Shining story. In perspective, according to a McKinsey report (MGI India Consumer Report), if India continues on its steady growth path over the next two decades, a major transformation will take place in the Indian consumer market. Income levels will triple and result in India taking over as the fifth largest consumer market (currently twelfth). Such strong growth and higher incomes will move over 291mnpeople out of desperate poverty and India's middle class will swell by almost ten times from its current size of 50mn to 583mn people (41% of population/ 128mn households) by 2025. Income growth will be the fastest in the urban areas where average real household incomes will increase by 5.8% whereas rural incomes will accelerate by 3.6% over the next two decades. Moreover, as higher disposable incomes propel consumer spending, more money will flow into leisure activities giving a steady impetus to M&E Industry. Besides the macro-economic factors, we believe steady advertising growth, liberal government regulations and convergence of diverse platforms will be the key growth drivers for the Media industry. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 35 Indian Print Media Indian print media has evolved through a series of revolutionary events.This has rendered the market highly fragmented with approx. 1900 news publications for a circulation figure of just 200 million. The segment hence provides for several opportunities as listed below: • Tapping the reading population As per the latest readership survey NRS 2005, the reach of the print media (dailies and magazines combined), as a proportion of the reading population (i.e. 15 years and above) is only 27 per cent. The global average readership is estimated to be over 50 per cent. This highlights the significant potential of the print media market in India. Further, as literacy (as measured in the NRS) grows by nearly eight points and even higher in the rural areas, the potential of the print media assumes a significant proportion. This can be illustrated from the fact that one of the reasons that Dainik Jagran, India’s leading daily hasbeen able to retain its leadership position for the last three years isbecause the number of literates in Uttar Pradesh, Bihar and Jharkhand(strong Dainik Jagran markets) has grown explosively. Time spent on reading has also gone up quite significantly from an average of about 30 minutes daily to around 39 minutes daily over the last three years, further contributing to this growth potential. • Build a pan-India presence Due to low levels of literacy and India’s marked regional diversity, the print media segment is characterized by a large number of players dominating specific geographies (See Table below). Vernacular news dailies thus dominate the market with a 49 per cent share. Regional dominance is not just typical of only vernacular papers- even English news dailies have managed to gain dominance only in specific pockets. As a result, there are hardly any players with a pan-India presence. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 36 • Leveraging a fragmented market The print media market today is highly fragmented with most publishers being family owned. These publishers hence had low access to capital and information and thus concentrated only in the geographical location in which they were the leaders. However, this trend is now changing and publishers are looking to expand their market though both organic and inorganic routes. With an added push of foreign investment being allowed in the print media segment, this segment thus offers significant investment opportunities More than 220 million readers of English and vernacular language newspapers and magazines & It is close to 10% of the total base Newspapers account for 90% of the market, Magazines account for 10%market share. Revenues expected to grow from USD 2.38 bn in 2005 to USD 4.37 bn in 2010. Subscriptions contribute 57% of the total revenues, rest by Advertisement Print media. Print media players continue to add new properties and territories. Deccan Chronicle launched its much awaited flagship daily Deccan Chronicle in the Bangalore market. DCHL also entered the financial daily segment with the launch of Financial Chronicle in Hyderabad,Chennai, Bangalore and Mumbai. HT Media expanded the presence of Hindustan in UP. However, the print segment is reeling under 30% increase in newsprint prices since the past six months on account of  Closure of two mills in North America (end-CY07) resulting in consolidation of capacity,  Shortage of waste newsprint for Chinese newsprint plants resulting in global price increase of US$35per ton,  High prices of crude oil and wood and increase in newsprint demand in USA due to presidential elections.  Sharp depreciation in rupee in the past three months as against the earlier trend of appreciating rupee. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 37 Notwithstanding the threat from Television and emerging media like Internet and Radio, the Print Media in India continues to dominate the M&E space attracting the highest revenues in terms of advertising. In CY2007, the Print Media segment in India stood at Rs149bnregistering a yoy growth of 16.5%. Newspaper publishing, which accounts for 87% of the segment, registered a 16.6% yoy growth whereas Magazine publishing, which contributes the balance, grew at a marginally lower rate of 15%. Going ahead, Print Media is expected to deliver a 14% CAGR in overall revenues during CY2007-11 driven largely by advertising revenues as circulation growth is expected to witness a slowdown. Print Media Industry Size Print Media in India - Expanding Geographies S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 38 We attribute this unique feature to the following: Family owned businesses - Most Newspaper businesses in India are family owned and have a strong regional focus. Moreover, due to lack of funds and localized nature of the newspaper business, most of them have remained content in their own boundaries. Strong Entry barriers - Newspaper business has extremely strong entry barriers owing to strong brand equity, readership loyalty and requirement for a wide distribution network. Moreover, as advertising revenue in a region is generally absorbed by the top-two players, in most cases it makes competition unviable. Niche focus - In general, Regional newspapers (Hindi + Vernacular) offer local and regional focus to their readers, often issuing several different regional editions. The content and circulation of English-language newspapers, on the other hand, is largely focused on the primary urban centers. Hence, both enjoy their own set of readers and advertisers, which have left enough room to expand within. Nonetheless, the scenario is fast changing. Post opening up of FDI in the sector, several players have attracted large investments and also tapped the IPO market to raise funds. Equipped with a large war-chest of money, these players have broken from their regional strongholds expanding into newer geographies, launching new editions and even venturing beyond Print. We believe this trend will pick up further momentum in the future as Print companies taste the benefits of ad-bundling (arising out of the ability to offer advertising in multiple editions) and derive synergies from common infrastructure and brand equity. Key Concerns Rising Newsprint Prices The cost of production of a newspaper is directly linked to the cost of newsprint, which varies with the market price of newsprint, availability and location of printing facilities and the number of pages used. Newsprint costs generally account for almost 50-70% of total expenses for a publishing business. Below we have enumerated newsprint costs for our Print Media universe vis-à-vis their total expenditure and revenue. Newsprint costs vis-a vis Expenditure & Revenue S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 39 Newsprint prices vary according to quality. Newsprint is a freely traded commodity on the international markets and exhibits price volatility. India imports almost 70% of its newsprint requirement. The English newspapers generally use higher quality and mostly imported newsprint compared to the regional players which use a mix of imported and domestic newsprint. In our Print Universe, the ratio of Imported: Domestic newsprint stands at 90:10 for Deccan Chronicle, 70:30 for HT Media and 35:65 for Jagran Prakashan. After bottoming out in July 2002 at US $430MT, newsprint prices were on a steady rise for almost four years and peaked at US $640MT levels in July 2006. The rise in newsprint prices during the period was attributed to steady demand and cost push inflation. In FY2008 however, most Print Media companies reaped the benefits of lower newsprint costs on account of the dual benefit of declining newsprint prices and rising Rupee. Print scores over Television due to inherent advantages. Print, as a medium, has certain inherent advantages over other mediums particularly TV, which helps the segment retain higher portion of advertising revenues: • Newspaper advertisements have a better shelf life and visibility unlike TV where viewers flick through channels during commercials. Ability to communicate lengthy, detailed and complex information, forms and descriptions is also unique to print. • Several advertisements are best conveyed only though the print medium including tenders, cinema listings, corporate communications. Moreover, ads relating to sectors like education, real estate, financial products, etc. are also better suited for print. • Certain categories like classifieds related to jobs, matrimonial and services offered are reserved for Print (Internet is now posing a threat). • Newspaper easily wins over TV in case of ease of targeting audience by demographic and/or region. Print also again scores over TV in case of reach of the local ads. • Print ad costs are drastically low in India compared to the TV ad spots making print the affordable medium for a larger number of advertisers. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 40 Structural factors to Drive Print Media growth in India While advertising revenue growth is largely related to strong economic growth in the country, we believe Newspaper publishing in India is set to grow owing to the following inter-related structural growth drivers: Low Penetration One of the key factors influencing allocation of ad spends towards different media platforms is reach. The reach of Print Media in India is significantly low at 38% constrained by poor literacy and income levels. However, its reach in the urban areas at 58% is substantially higher compared to the rural areas at 30% (FICCI-PwC Report on Media, 2008). Even though, reach of Print media is lower than television, it is witnessing faster growth in terms of reach compared to television. Moreover, the print media penetration is higher among people in the upper socio-economic classes, in % terms, compared with those in the lower brackets. However, due to the sheer number of people falling in the lower brackets, the number of print readers in the lower strata outnumbers the readers in the upper strata on an absolute basis, indicating strong headroom to grow readership numbers. Improving literacy levels According to NRS 2006, literacy levels in India have risen from69.9% to 71.1%. Literacy levels in urban areas at 85.3% witnessed a 90bp rise whereas rural areas at 64.8% witnessed a higher rise of 120bp during 2006. Moreover, readership (dailies and magazines combined) increased to 222mn from 216mn. This has led to significant scope for growth for newspaper publications in terms of untapped potential readers. The fact that out of the 359mn people in India who can read but do not currently read any publication, 68% can read Hindi indicates strong potential for readership growth. Also, 20mn of these literate non-readers belong to the upscale SEC A and B segments (higher socio-economic brackets), which can help publishers attract strong advertising revenues. Improving affordability Rising income levels coupled with aggressive marketing by print media companies is also driving growth of Print Media in India. It should be noted that, each regional daily is read by almost 7-9 readers compared to 2-3 readers for English dailies, which indicates the potential for higher circulation as affordability improves. Moreover, growing efforts by Print Media companies to push up circulation in terms of discounted cover prices and incentives(subscription schemes) have not only accelerated penetration of dailies, but have also helped push multiple dailies into homes. Convergence - Playing its part in Print Media Sitting on huge cash piles and with the ability to generate strong cash flows, Print Media companies have started to realize the importance of convergence of media platforms and moving beyond their core business. Rising competition, the need to S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 41 capture a larger advertising pie and ability to derive cross-synergies are some of the key reasons necessitating this transformation. We believe the Print Media companies in India have just embarked on a global trend, which has We expect the Indian print media industry, estimated at Rs144bn, to grow at a CAGR of 14.8% to Rs282bn over FY06-11E. Advertising revenue should clearly lead the growth with a CAGR of 16.8%, whereas we anticipate circulation revenue growth of 8.8%. A booming economy, increasing literacy, rising incomes and low media penetration are some of the factors driving the growth in India print media. India is one of the fastest growing print media markets in the world. In 2001-06, the Indian print industry grew at an 8.8% CAGR, against 1–3.5% growth for most other markets globally over 2001–06. Going forward, we expect strong economic growth, rising incomes and rising literacy levels to accelerate India’s print media industry growth. We estimate the print media segment will grow at 14.8% CAGR over 2006-011E, based on a 16.8% CAGR in advertising revenue and 8.8% CAGR in circulation revenue. India is one of the few markets in the world where newspaper readership is growing, driven by rising income levels and increasing literacy. In addition, there is a literate population of about 300m who do not read newspapers, which provides for opportunity of growth in readership. Print has 47% share of advertising pie Over the last decade, increasing penetration of cable and satellite TV has shifted market share from newspaper advertising towards broadcasting. This trend, however, seems to have stabilized over the last few years. Strong growth in sectors such as retail, real estate, telecoms, and financial services has led companies to target penetration in Tier II Tier III cities. In these markets, local print advertising is an effective means of communication, with positive implications for print sector growth. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 42 While newspapers in India are not gaining ad spend at the same rate as other media, especially TV and Internet, newspapers still capture a significant share of overall advertising. In 2006, print advertising’s share stood at 47%, which still makes it largest revenue generating advertising medium and higher than the global average of 42-45%. We expect newspapers to be a key beneficiary of S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 43 Newspaper and Magazine Advertising in India. The Indian press is, for the most part, independent and privately owned. A few newspapers are linked, officially or ideologically, to political parties. Owners can and do dictate editorial policy. Both the English and the “language press” (nonEnglish) tend to support the Indian government on foreign policy issues. Newspaper readership is steady, despite the rapid growth of electronic media. Newspapers remain relatively in expensive, and the print media, especially the English language press, are feistier and more apt to criticize the government on domestic issues than their electronic counter parts. n India boasts more than 43,000 newspapers and magazines published in English and dozens of other languages. Hindi publications have a 36% share of the total circulation of newspapers and magazines; English publications have a 17% share. The Urdu press is the third largest. Other major language newspapers with a circulation of at least 100,000 are in Tamil, Malayalam, Bengali, Gujarati, Marathi, Telegu, Kannadaand Punjabi.n India’s language press is booming. The past20 years have seen a remarkable growth, with circulation trends pointing up. In 1997, the Prasar Bharati Act was en acted, giving BBC-style autonomy to the formerly state-controlled TV and radio networks, Doordarshan and All India Radio. By early 1999, a draft broadcasting bill, which would provide a regulatory framework for the industry, was awaiting action. Private cable and satellite television reach the entire country; two dozen satellites beam signals to India, and some subscribers have access to as many as 50channels. Television is assuming tremendous importance in the country, especially among the growing middle class. Viewer ship is estimated at nearly 300 million. Radio is the most popular means of information and entertainment, particularly for the rural and illiterate population. All India Radio has a countrywide network of regional broadcasting and programming center as well as a national channel that broadcasts in Hindi, Urdu and English. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry S. V. Institute of Management 44
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 45 The Market: The Display advertising component of the Newspaper market in India for calendar year 2007 was valued atRs.9,290 cr. This is a growth of 18% over calendar 2006 (Rs.7,856 cr.) as against the 17% predicted by us in last years report. Print, despite being the biggest incumbent medium, continued to attract the largest share of advertising spends. The India Print story is in stark contrast to the threat being faced by the medium globally. The major reason for the revenue growth has been the consistent hike in Card Rates of major players, in spite of increased competition in the top 8 Metros and stagnant Average Issue Readership (AIR) numbers. While this has been made possible due to the continued dominance of publications in their home markets, rate hikes in some part have also been imposed to offset their entry into new markets. Rate hikes have taken place at both the premium and the popular ends of the product spectrum. Expensive English print became even more expensive with leading brands making forays into new markets or improving relative readership contribution from smaller markets. On the other hand the local retail market continued to strengthen its media investment in regional publications. Here increased colour options helped publications improve their yield from advertisers.60% of total volume consumption in 2007 was in colour as against 52%the year before. Publications are also actively looking at ways to tap into the local advertising market with “Go Local” drives by way of new Supplements. With restrictions on OOH medium usage in some cities, publications are increasingly targeting retailers and cashing in on their diverted OOH spends. Leading publications are also creating new avenues for growth through forays into other languages and formats. Publications are using e-paper versions by targeting NRI population, which gives them over 75% of the total hits. However, it would take some time before this avenue begins to generate real value. Publications which promoted their Classifieds portals as separate entities have succeeded in penetrating segments like Matrimonials, Real Estate and Jobs. The Players: Within each language there are one or two players that have seen over 25% growth and others which are closer to 10% levels. Typically the big players have got bigger. While some players have grown on the back of increased offerings and entry into new markets, others have done so on the back of Rate Hikes and improved Colour to B/W ratios. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 46 The Product: • Death of the Front Page as we know it: Product innovation is the name of the game today. TOI has made the half front-page gate fold a regular feature and most other publications have followed suit. It has become a very attractive option for advertisers as well. • Rise of the Tabloid: Even though broadsheet still remains the popular format, there is an increasing accent towards smaller formats. The newly launched Mail Today (JV between Associated Newspapers Ltd with Living Media India Ltd) and Metro Now (JV between HT Media and BCCL) have indicated that there might be a subtle shift towards ‘Tabloidisation’ of the Indian market. Factors such as increasing cost of newsprint and shift in reader preference (young readers who find newspapers dull have shown interest in this format), might only accelerate this trend. • Move to other Languages: 2007 witnessed the transition in areas such as Business papers which have always been considered the domain of the English press. Economic Times broke the trend by launching a Gujarati edition in Ahmedabad and a Hindi edition in Delhi. Business Standard was not far behind with its launch of Hindi editions for Delhi and Mumbai. • The launch of supplements designed for special interest areas such as lifestyle, technology, entertainment, education and careers. The Reader: The Indian reader has never had it better. While 2 years back everything appeared plain vanilla, today, he or she has a choice of multiple flavors and publishing houses are more than willing to cater to his or her tastes. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 47 The Future: 2008 will continue to be an exciting year for print. We do not expect the digital wave to dampen our attachment to the morning daily. Rising literacy levels and limited access to Internet will be the key reasons why print will continue to grow. Just as in 2007, this year will see a host of new launches. While existing print players will diversify in related genres and enter new geographies, non-print players will enter print to diversify. Newsprint prices are on the rise and the next few quarters will continue to see increasing prices and shortages. This will put pressure on margins, forcing publishers to look at new formats and revenue streams. Private Equity players and bankers will also continue to explore investment opportunities in Indian media houses. Growth in transport infrastructure will result in the launch of commuter newspapers across cities. For instance, Delhi's underground, which did not exist before 2002, will have 100 stations in three years' time and is expected to carry 3 million commuters, mostly in the age group of 15-45, daily. This is the TG most coveted by advertisers and media houses are already launching publications to tap in to this bunch, with Metro Now being the pioneer. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 48 Newspaper publishing - Standing tall in India Contrary to popular belief and in defiance to global trends, Newspaper publishing still stands tall in India accounting for similar share of advertising pie as the popular idiot box (television).Newspaper publishing, a thriving business in India, generated Rs130bn in revenues during CY2007out of which 61% came from advertising and the balance from circulation. In terms of advertising revenue growth, it once again outpaced television registering a robust 21.2% yoygrowthduringCY2007 as against 20.8% growth in advertising on television. Going ahead, the industry is expected to register a 13.9% CAGR in overall revenues during CY2007-11 largely driven by advertising revenue growth. Newspaper Publishing Industry size Revenue Model skewed towards advertising. The Print Media model involves dual stream of revenues - advertising and circulation. While advertising revenues are generated from sale of advertising space in a publication, circulation revenues are a function of the number of copies sold and pricing of the publication. This nature of dual stream of revenues requires newspaper publishing companies to create a balance between both streams to achieve maximum potential and sustainability. A typical newspaper publishing model has the following structure. Newspaper Publisher Business Model S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 49 Print Media in India – Readership Even in terms of overall readership, the Regional dailies (Hindi and vernacular dailies) dominate the pie with The Times of India being the only English daily to feature in the Top-10 list. Moreover, the Regional dailies have a readership: circulation multiple of 7-9 times compared with English newspapers of 2-3 times. This is primarily due to higher cover prices of Regional newspapers compared with English newspapers and the readers of Regional newspapers are generally from the lower socio-economic segment S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 50 Top Ten Newspapers by Readership However, despite having higher number of registered newspapers, higher readership and a better proportionately distributed readership (urban + rural), the Regional dailies commands a lower share of the print advertising pie. English dailies (including Business dailies) attract the highest advertising revenues with approximately 50% of ad-spend followed by Hindi and other Indian language newspapers with approximately 25% of ad-spend each. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 51 Industry life cycle The life cycle of the print media is shown below it shows that the industry in the growth stage its earnings are increasing year by year from the year 1995 its earnings were 24500 mn and in year 2007 it has increased to 118064 it shows the constant growth in the industry and the reasons behind the growth of industry are that the literacy level increase, due to that more people are reading the newspaper, even the government support the industry, in 2005 budget the government the service tax over the space for advertisement INDUSTRY LIFE CYCLE 140000 118064 120000 100000 97633 80000 73004 64471 R ) o l M n i ( . s 60000 59639 40000 20000 32396 24500 27950 26360 35064 29796 42125 39857 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 in television but it was untouched for print media and due to that there was a sudden boost in the income for print media from year 2005 to 2007. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 52 CAGR 140000 118064 120000 100000 14% 80000 ) o l M n i ( s R 60000 40000 24500 20000 0 1995 2007 And as the industry is in growing stage and chance of earning are high more players are attracted towards the investment in the industry compounded annual growth rate of the industry is 14% and it shows the profitability of the business that is there are more chance of earning good profit in the industry which can be seen from the figure shown below. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry PEST ANALYSIS S. V. Institute of Management 53
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 54 • Political Factor: 1. Service tax on development and supply of content for use in advertising purpose (advertising cost increases). Scope of certain existing services expanded [Section 65] All the changes in respective services specified below have come into effect from 01.06.2007 (i) Sale of space or time for advertisement, other than in print media Sale of space or time for advertisement, other than in print media is chargeable to service tax under sub-clause (zzzm) of clause (105) of section 65. The scope of this service has been expanded by substituting the explanation 2 to the clause (zzzm) which defines print media. The new explanation states that print media does not include business directories, yellow pages and trade catalogues which are primarily meant for commercial purposes. Consequently, sale of space for advertisement in such publications will also be livable to service tax under this service. (Source: Amendments by the finance act 2007) 2. Sales of space for advertisement in print media left out of the ambit of service tax. Service tax increased from 10% to 12%. Sale of space or time for advertisement service, excluding that in print media and that by broadcasting agency, brought under the service tax net. 3. The pre-conditions of FDI in print. • At least three-fourth of the board of a print media company with FDI must be a a Indians. • All key editorial posts must also lie with resident Indians. • Any print media company wishing to change its share-holding pattern must get a a prior government approval. (Source: Equity master union budget – 2006-07) 4. Foreign Investment in Print Media Only 26% FDI is allowed: the government allow 26% F.D.I limit for the investment in print media in that 100% F.D.I is allowed in non news segment which includes magazines like scientific magazines but in news segment only 26% F.D.I is allowed due that foreign players are restricted. And in the company ¾ of the board member should be Indian only and should be having control in their hands. Budget 2002-2003 S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 55 The process of economic liberalization in India, which began more than a decade ago, has taken another significant step, namely opening up a very sensitive sector. The print media Government of India in June 2002 had decided to allow 26% foreign direct investment (FDI) in news and current affairs print media. Technical and medical publications have been allowed a higher FDI of 74%. The decision, taken by the Union Cabinet, reverses the 1955 Cabinet resolution prohibiting any foreign investment in print media. A detailed policy statement on FDI in print would be issued shortly. Foreign investments in news agencies, however, remain barred. The government has attempted to address the concerns of political parties that fear FDI in print might lead to foreigners controlling the Indian media. The Opportunity The desire for foreign help is palpable. India has 49,000 publications, but annual revenues total just $1.1 billion. While they can be vibrant and gutsy, most are starved for technology, marketing, and capital to expand. (Source: ibef july-sep 2008) 5. IPC (Indian Penal Code): The Indian Penal Code makes criminal defamation a noncognisable offence. Thus, criminal proceedings can be initiated against a newspaper, TV or radio channel if the complainant is able to satisfy a magistrate that a statement made about him/her was on the face of it defamatory. Civil suits for defamation are also possible under Indian law. Two significant aspects of the defamation law impact on the press. First, once a case of defamation is taken to trial, the matter is deemed to sub-judicial and cannot be commented upon. Second, where the person claiming to be defamed is the Prime Minister or the chief minister of a state, the prosecution can be launched by the public prosecutor; in other words, at the state’s expense and without the person claiming to be defamed having to appear in court. This enactment has been used by the chief ministers of some states to launch vexatious litigation against the press, with a view to causing harassment and cowing newspapers and other members of the media deemed to be ‘unfriendly’. While there are no apparent restrictions on the free coverage of groups or issues, there are some restrictive enactments in place to deal with contempt of the judiciary, and breach of legislatures’ and Parliament’s privileges. Criminal contempt, the offence chiefly concerning the press, is defined as any publication that interferes with or undermines the administration of justice or has a tendency to do so. In 1997, A.K. Singh filed a criminal case under Sections 500 and 501 of the Indian Penal Code against Raman Kirpal; A.K. Bhattacharya, the then editor of The Pioneer, Lucknow and Delhi; Ghanshyam Pankaj, editor of the S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 56 Hindi daily Swatantra Bharat; and Sanjiv Kanwar and Dipak Mukherjee, printerpublisher of The Pioneer and Swatantra Bharat, respectively. After a 10-year-long trial, Chief Judicial Magistrate Suresh Chandra pronounced his judgment on September 3, 2007, holding the reporter and the other accused guilty. The Judge said in his order that it had been established that the interview published by the accused was concocted and defamatory. He also said that the accused persons had failed to prove that the reporter had actually taken the interview. (Source: vakilno1.com/bareact/Indian penal code.asp) 6. MRTP act on news: While general legislation exists to regulate monopolies and cartels – the Monopolies and Restrictive Trade Practices Act – this has been ineffectual in curbing the formation of monopolies and cartels of private media companies. In the absence of restrictions on cross-media ownership, such monopolies in fact straddle various units of the media. Thus, private monopolies and cartels of the media do exist. Such monopolies and cartels are found largely in the press, but some media barons have overlapping interests in television and FM radio. Media monopolists are generally proestablishment and support the governments of the day to ensure that their monopoly positions are not threatened. These monopolies exist mainly to enrich the owner of the media company. State authorities have in the recent past not taken any action against private media monopolies. This is largely because such monopolists support ruling dispensations, are adept at gauging the popular mood about political parties and see no difficulty in swearing or switching allegiance to those in power. (Source: legalserviceindia.com/article/print.asp) 7. Act for surrogate advertisement, 2004 This Act may be called the Prohibition of Publication or Telecast of Vulgar, obscene and Surrogate Advertisements and Re-mix Songs by Print and Electronic Media Act, 2004. (Source: Adverting and promotion management by Beltch & Beltch, Page no.) 8. Custom duty on import of newsprint. The total requirement of newsprint in the country today is around 10 lakh tonnes. The domestic production of newsprint by the existing manufacturers can fully meet the country's demand, as the installed capacity is around 12 lakh tonnes. Currently, approximately five lakh tonnes of newsprint are being imported at the cost of around Rs 1,000 crore to the country's exchequer. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 57 Currently on import of newsprint, there is five per cent. "Due to negligible duty on import of newsprint, large quantities of the same are being dumped from South-East Asian countries, Russia and America and the indigenous industry is suffering badly. The above duty is even less than the duty on raw material i.e., waste paper whereon the duty incidence is 9.2 per cent (basic duty five per cent plus SAD four per cent). WTO bound rate for newsprint is 25 per cent," FICCI said. But duty was bound to be reduced because of the increase in the price of news print globally and due to that government reduce the duty from 5 percent to 3 percent and due to that import can be done at easy rate But import on newsprint for newspaper is exempted from the import duty. The present newsprint policy of the Government of India is as follows: a) Not less than one-third of the annual production of indigenous newsprint will be reserved for small and medium newspapers. b) Import of newsprint is allowed to actual users. (Source: www.bangladeshnews.com.bd/2007/07/01/budget-hasmeasures-to-contain-price-hike-scopes-for-job-creation/ 40k.htm) 9. Coping with Regulations: Marketers can cope with advertising regulation in various ways: • Monitor regulations and pending legislation: Monitoring legislation and gathering intelligence on possible changes in advertising regulations is crucial since advertising regulations change from time to time. In many countries, the prevailing mood is in favor of liberalization with the important exception of tobacco and alcohol advertising. • Lobbying: Local governments or international legislative bodies can be lobbied usually jointly by advertisers, advertising agencies and the media. But too much lobbying carries the risk of generating bad publicity, especially when the issues at hand are highly controversial. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 58 • Legal remedies: Advertisers may also consider fighting advertising legislation in court. In Chile, outdoor board companies, advertisers and sign painters filed suits in civil court when the government asked advertisers to place outdoor boards several blocks from the road. In the European Union, advertisers appealed to European commission or the European court of justice to overturn local laws. • Modify marketing-mix: Tobacco marketers have been extremely creative in handling advertising regulations. A widely popular mechanism to cope with tobacco ad bans is brand extension or surrogate advertising. For instance, the Swedish Tobacco Co. whose brands have captured more than 80% of the Swedish cigarette market started promoting sunglasses and cigarette lighters under the blend name, its best-selling cigarette brand, to cope with a complete tobacco ad ban in Sweden. In the United Kingdom, Hamlet, the leading cigar brand, shifted to other media vehicles following the ban on all TV tobacco advertising in the United Kingdom in octomber1992. Hamlet started using outdoor boards for the first time, installing them at 2,258 sites. It ran a sales promotion campaign at a horse race where losing bettors got a free Hamlet cigar. it also started selling a video cassette with about 20 of its celebrated commercials. In South Korea, Virginia slims pitched itself as a man’s cigarette because the Korean law banned advertising that targeted women and young adults. (Source: Anil Varma, “Advertising Industry facts and regulation”, chapter no. 3, page no. 67) S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 59 • Economical: Attracting foreign investment Most Indian print players continued to dominate the local regions and did not enter new territories, mainly due to lack of funds. However, foreign investment regulations were relaxed in 2002. Currently, up to 26% foreign direct investment (FDI) is permitted in newspapers and periodicals dealing with news and current affairs. In non-news publications, 100% foreign investment is permitted. Since the changes in the regulation many foreign investors have taken strategic stakes in the domestic print media companies. Domestic Company Jagran Prakashan HT Media Jagran Prakashan Deccan Chronicle HT Media Henderson Dainik Bhaskar Amar Ujala Ushodaya Enterprises Investor Independent News& Media Public (IPO) Public (IPO) Public (IPO) Amount Invested (Rs. bn) 1.7 3.7 3.3 1.5 Henderson Warburg Pincus DE Shaw 1 1.5 1.2 Blackstone 12 Source: Ficci PWC, companies Global crises: Due to global crises in the whole world the corporate has control their expenditures and due that they had restricted the their advertising expenses which directly affect the earning of different medias and this also affect the print media earnings because advertising income contributes 75% of their total earnings and due to these reduction their earnings are negatively affected. (Source: Economic times (gujarati) page no. 2 date: 4th nov, 08) S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 60 GDP v/s Growth of Print Media: GDP has no relation with Print media’s growth, as the given graph reveals that in 2004 GDP was 8.5% and growth rate of print media was 15.29%. In 2005 GDP decreased by 1% and growth of print media also decreased by 0.39%. Effect of GDP growth: GDP V/S GROWTH RATE OF PRINT AD 10 8.5 8 22.81 9.6 9.4 21 7.5 15.29 14.9 25 20 15 6 10 4 5 2 0 PERCENTAGE PERCENTAGE 12 GDP growth rate Print ad growth rate 0 2004 2005 2006 2007 YEAR (Source: cii presentation july 2008) In 2006 GDP increased by 1.9% and growth of print media also increased by 7.3% and in year 2007 GDP increased by 0.2% and growth rate of print media also decreased by 1.6%. As the entire picture reveals the situation that whatever change in GDP incur same happened to the growth of print media. As per 11th five year plan the GDP growth was forecasted round about 8.40 to 8.90 which shows the decline rate, so as per Angel broking survey 2008 the estimated growth of print media will also be decreased. Contribution in GDP: Another favorable thing is that the contribution in GDP of print media is increasing at increasing rate, in year 2006 the contribution as 0.29%, in year 2007 it increased by 0.04% to 0.33% and the estimated contribution in year 2008 is 0.38% which is 0.05% increased compare to year 2007. (as per NRS) Effect of inflation: Inflation rate has positive relation with the growth of print media advertising because when inflation rate increases the purchase of an individual also get S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 61 increases and that lead corporate to advertise more. Thus, this increased advertisement of corporate lead the print media to grow more. On the other hand when inflation rate decreases purchase of an individual also get decreases and at that time generally corporate do not prefer to increase the frequency of the advertisement. Inflation vs Growth of print ad 7.4 25 22.81 7 5.8 percentage 6 5 15.29 21 4.5 14.9 20 15 4 3.2 3 2 10 percentage 8 Infaltion Print ad growth 5 1 0 0 2004 2005 2006 2007 year (Source: cii presentation july 2008) As in given chart when inflation rate decreases to 4.5% in year 2005 from 7.4% of year 2004, the growth of print media advertising also decreased to 14.9% in year 2005 from 15.29% of year 2004. While in year 2006, inflation rate increased to 5.8% from 4.5% of year 2005 and the growth rate also show the same picture, it increased to 22.81% from 14.9% of year 2005. Story remains same in year 2007 also. Slowdown in the economy: Historically, the advertising industry has had a strong correlation with the growth in the economy. Between 1996 and 2006, the advertising industry grew at a CAGR of 11%, while the economy grew at an average 6%. While, circulation revenues for newspaper companies are recession-resistant, 61% of their revenues come from advertising, which is very sensitive to the overall trends in the S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 62 economy. Any slowdown in the Indian economy and the consequent impact on disposable income could adversely affect advertising income. Further, ad spend is influenced by a number of factors including the Indian economy, the performance of particular industry sectors, shifts in consumer spending patterns and changes in consumer sentiments and tastes. For e.g. in 2QFY08, the print companies faced pressure on the ad revenues as a slowdown was witnessed in the retail and real estate sectors. (Source: equity master November 30, 2007) Increasing disposable income: In India, the disposable income of people is increasing year by year, purchase power also get increased. People are spending more money day by day that lead advertiser to increase their frequency of advertisement. Even the 6 th pay commission also increases the purchasing power of individual. (source: equity master march 26, 2008) Increase in price of newsprint: The cost of production of a newspaper is directly linked to the cost of newsprint, which varies with the market price of newsprint, availability and location of printing facilities and the number of pages used. Newsprint costs generally account for almost 50-70% of total expenses for a publishing business. Below we have enumerated newsprint costs for our Print Media universe vis-à-vis their total expenditure and revenue. Newsprint prices vary according to quality. Newsprint is a freely traded commodity on the international markets and exhibits price volatility. (Source: angel survey april-2008) Geographical expansion: The national players are penetrating regionally because the regional and especially rural market is also showing more potential. The numbers of readers are increasing in rural area, reasons for that are, 1. Increasing literacy level S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 63 2. Increasing awareness level of stock market 3. Regional newspaper are also providing news of Business, Classified etc. Low cost of production (small players can easily survive): Less technological changes in every business make small players to grow faster or help to survive up to some extend. Same is the situation in print media industry where the technological changes are very nominal and that give a chance to small player to survive. The changes in industry are only in Production capacity and the cost related to production like increase in paper cost which is nominal in nature. Higher literacy levels: In 2006, the literacy levels increased to 71.1% as compared to 69.9% in 2005. While rural literacy is at 64.8%, urban literacy touched 85.3%. Currently Indian print media is estimated to reach over 220 m people, and has immense growth potential since close to 370 m literate Indians are believed to not be served by any publication. Also, the reach of newspapers is only 27%, as compared to the global average of 50%. Lower cover prices: Earlier, due to strong hold over a region, the newspaper had higher cover charges. However, with increasing competition and venture into newer regions the companies have reduced the cover prices to augment more sales. Many English dailies are sold for as low as Re 1 or Rs 2. The initial subscription offers of ‘DNA’ and ‘Hindustan Times’ (HT) in Mumbai, during their launch period, further reduced the cost of the newspaper to around 50 paise for an average issue. Higher ad spends: Print media accounts for 48% of the total Rs 137.5 bn advertising spend in the country. However, the ad spend in India is just 0.4% of GDP as against 0.5% in China, 1.3% in the US and a world average of nearly 1.0%. With rising consumerism and growing interest from domestic and global brands in Indian market, the growth in ad segment is expected to be strong. As per the registrar of newspapers, there were approximately 6,529 daily newspapers as of March 2005. No single newspaper had a national circulation. In 2006, India had the second largest circulation of newspapers with 88.9 m copies per day; second only to China with 98.7 m copies a day. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry Base Population Any Publication Any Daily Any Hindi Daily Any English Daily Any Magazine Urban & Rural Urban Rural (m) % (m) % (m) % 18 10 4 24 0 42 84 16 17 0 22 94 40 77 14 63 8.1 36 15 27 5.1 17 2.2 16 6.7 1.6 0.3 59 7.6 34 25 4.6 14 (Source: NRS 2006) S. V. Institute of Management 64
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 65 • Sociological factors: ASCI NORMS: WHY SELF-REGULATION IN ADVERTISING In recent years the quantity of false, misleading and offensive advertising has resulted in consumers having an increasing disbelief in advertising, and a growing resentment of it. Misleading, false advertising also constitutes unfair competition. It could lead to marketplace disaster or even litigation. If this kind of advertising continues, it won’t be long before statutory regulations and procedures are imposed which make even fair, truthful, decent advertising cumbersome if not impossible. This certainly will affect your ability to compete and grow. The Advertising Standards Council of India (ASCI) (1985) has adopted a Code for SelfRegulation in Advertising. It is a commitment to honest advertising and to fair competition in the market-place. It stands for the protection of the legitimate interests of consumers and all concerned with advertising - advertisers, media, advertising agencies and others who help in the creation or placement of advertisements. As the Code becomes increasingly accepted and observed pro-actively, three things will begin to happen. 1. Fewer false, misleading claims 2. Fewer unfair advertisements 3. Increasing respectability Which, only means more freedom for you to practise your craft or carry on your business effectively. As a member of ASCI, you can mould the course of Self-Regulation and participate in the protection of healthy, effective advertising. You can have a say, through S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 66 the Board of Governors, in the further development of the Code and future appointments to the Consumer Complaints Council (CCC). Membership of the ASCI (open only to Firms) entitles you to appoint your nominee to discharge your function as a member, including standing for election to the Board of Governors and voting at general meetings. Why not have a say in matters affecting your own destiny? Why not make Self-Regulation truly work for you? In India, as in several advanced economies, there is only ONE BODY for Self-Regulation in Advertising – the ASCI, which is concerned with safeguarding the interests of consumers whilst monitoring/guiding the commercial communications of Practitioners in Advertising on behalf of advertisers, for advertisements carried by the Media, in their endeavours to influence buying decisions of the Consuming Public. Bad effect on children: Parents have a different opinion according to them the excessive information and products thrown at them via the media, print and visual, spoiled the children. Most marketers were targeting kids even for products that had nothing to do with children. Since most middle class families have both parents working the marketer tries to work through the children on the guilt of the parents and thus encourage children to make very unreasonable demands. International Marketing Conference on Marketing & Society, 8-10 April, 2007, IIMK 71 Language barriers: Language is one of the most alarming barriers in international advertising. Numerous promotional efforts have misfired because of language-related issues. Given the bewildering variety of language, advertising copy translation mistakes are easily made. In general, there are three different types of translation errors: simple carelessness, words with multiple meanings and idioms. Religious barriers: Many of the trickiest promotional issues occur in the area of religion. In Saudi Arabia, for example, only veiled women can be shown in TV commercials. Such restrictions create problems for hair care advertisers. P&G overcame that constraint by creating a spot for pert plus shampoo that showed the face of a veiled woman and the hair of another woman from the back. In Brazil, Pirelli, the Italian tire maker, ran into problems when it used an ad with a Christ-like depiction of Ronaldo, the Brazilian soccer star. The ad showed Ronaldo with his arms spread and a tire tread on the sole of his foot, standing in place of the “Christ S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 67 the Redeemer” statue. The ad drew heavy criticism from the Brazilian church authorities and the Vatican. In France, after protests from local bishops, Volkswagen withdrew a billboard campaign involving an ad the relaunch of Golf with a modern version of the Last supper. Culture barriers: Advertisers must escape cultural traps by getting inputs from local staff, distributors or ad agency people. The Hofstede cultural grid is useful in understanding the influence of culture on global advertising. The grid classifies national cultures on various dimensions: power distance, uncertainty avoidance, individualism, masculinity, and long termism. Power distance refers to the degree of inequality that is seen as acceptable within the country. Ads that position products or services as status symbols may be effective in countries with large power distance (e.g, the Arab countries, Indonesia, Mexico). Source: Global CEO, july 2005. the icfai university press. All right reserved. Deceptive Advertising: Sometimes, advertisers give untrue and misleading information. It can take quite a number of forms like making a claim which it cannot fulfill, publicizing false benefits, use of ambiguous phrases, etc.; for example, the advertisement of fairness cream for men. Advertisers often take the help of puffery (praising the item to be sold with vague claims, without specific facts) to achieve their goals. One of the major areas of concern for the regulatory authorities is whether advertisers can substantiate the claims which they are making. Comparative Advertising: In the mad rush to outweigh the competitor, advertisers are using comparative advertising, which has always been there in the advertising world; it appears when owner of brand X claims that his product is better than brand Y of the competitors; for example, the advertisements of Mountain Dew of PepsiCo and Sprite of Coca-Cola. This has been extensively criticized by various researchers, because of the wrong perceptions in the minds of the consumers. More and more companies are resorting to “masked” comparative advertising. By this, the name of the competitor is not directly mentioned. But the question remains whether it is S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 68 advisable or not? Another question that comes to mind is “how effective comparative advertising is?” Ads to Kids: As per a study conducted by Business Today, ever year, kids between the age group of 8 and 12 in India spend a whopping sum of around Rs.20, 000 cr, starting from the clothes to food and recreation. This figure is enticing the marketers to target the children with specific advertising, and is also another cause for concern to the advertisers. They are targeted through TV and print media. According to experts, the problem is not in using children in advertising, but with the context in which they are used. Let us take the example of baby shampoo (name of the company withheld). The problem here is that there is no adult who is shown supervising the child near the swimming pool. The Children’s Advertising Review Unit (CARU) of the batter business bureau (BBB) keeps a close eye on kid’s advertisings and advocates that adults be shown supervising children if the product and service are supposed to be risky. Tobacco and Alcohol Commercials: Advertising related to tobacco (in any from) is under the scanner of the government of many nations including India. It has an adverse effect on the, population, especially the young. Tobacco companies have a tough challenge ahead of them in using advertising to target potential customers. Similarly, the advertisements of alcohol brand are restricted in many from media, but the advertisers are smart enough to use the name of their brands for other products. For example, McDowell’s No.1 is advertised through the product “mineral water” this known as surrogate advertising. Condom Ads: There is a heated argument going on about the use of advertising to promote condoms. Certain sections of the society feel prickly when these advertisements are shown in front of their children. Some people might call this hypocrisy, but one has to keep in mind the Indian values and ethics when advertising any product related to this category. Most of the time, an advertisement for condoms shows a couple in their wedding attire, i.e., the focus is mostly on the nuptial bed, but the biggest market for condoms lies outside this context. This is another aspect to be looked into. The ‘X’ Factor: A debate had been initiated a few years ago regarding the portrayal of women in advertising. On close examination of the ads featuring women, it is observed that, S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 69 mostly, mo0dels having perfect bodies are preferred. For example, the cover page of a fashion magazine features photographs which are not conducive to Indian culture. According to Scott A Lukas (teacher at Lake Tahoe Community College), “Women’s bodies are objectified in common ways. In the case of many popular ads, the objection comes through stereotyping.” Women are used extensively by different advertisers to promote their products. RTI Act: The landmark Right to Information Act of 2005 with several implications to news media and good governance would have remained dormant had newspapers not given the coverage in 2006 and 2007. The coverage of contentious issues and the ones which would not have got into public domain started making head lines in 2007. Newspapers started taking RTI route as a source for news and for “investigative journalism”. In the process the news media got a new opportunity to reinstate their credibility and unleash an era of transparency in public affairs of the country. Volume I, No. 7 September, 2008 Transparency Review S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 70 • Technological factors: 30000 color copy in an hour is available with new machines: Scanners : Colors: Yellow, Meganta, Cyan, Black Which are major color. Ink: Pilofranic nature Paper: Green shade paper Machines There are Three types of machine which used in producing or printing newspaper or magazine. They are as below: City line machine: German machine which has capacity to print 20 copy in one print Way Mack machine: Swiss machine which has capacity to print 24 copy in one print 45 GSM machine: An Indian machine which is capable to print 24 copy in one print Indian and swits machine can print 35000 copy per hour. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry S. V. Institute of Management 71
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 72 Five Force Analysis Substitute Products Bargaining power of buyer Rivalry among competing sellers Threats from new entrants S. V. Institute of Management Bargaining power of supplier
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry • Rivalary: Major Newspaper daily in industry ranked on readership: English Newspaper Daily No ALL publication 1 Times of India 2 Hindustan Times 3 The Hindu 4 Deccan Chronicle 5 The Telegraph 6 Mumbai Mirror 7 The Economic Times 8 DNA 9 Mid Day 10 The Tribune (Source: Impact November 2008) 08 R 1 6789 3277 2243 1225 1008 775 743 676 571 429 08 R 2 6712 3523 2121 1151 1019 895 752 710 535 466 change -77 246 -122 -74 11 120 9 34 -36 37 % change -1 8 -5 -6 1 15 1 5 -6 9 English Magazines No ALL publication 1 india today 2 reader digest 3 general knowledge today 4 competitio success review 5 Outlook 6 Wisdom 7 Stardust 8 diomand cricket today 9 the week 10 business today (Source: Impact November 2008) 08 R 1 2402 1594 1350 899 665 598 553 469 446 416 08 R 2 2141 1355 1225 794 573 477 438 400 336 326 S. V. Institute of Management change -261 -239 -125 -105 -92 -121 -115 -69 -110 -90 % change -11 -15 -9 -12 -14 -20 -21 -15 -25 -22 73
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 74 Competition is very high The regionalism aspect is clearly visible in the newspaper sector. The print media is further divided on the basis of the languages. Of the daily newspapers, about 46% are vernacular, 44% are in Hindi and 10% are English. Hindi and vernacular language newspapers offer a local and regional flavour to their readers. The content and circulation of English-language newspapers, on the other hand, are largely focused on the primary urban centers. Approximately 7% of the population in urban areas read English-language newspapers, compared to a readership of only 0.3% of the population in the rural areas. (Source: IRS 2005) In contrast to this, Hindi-language newspapers have a proportionately larger readership in rural areas, in addition to their strong presence in urban areas, with a readership of approximately 15% and 5% of persons in urban and rural areas, respectively. The newspaper industry is regionally divided, with existing players enjoying strong brand loyalty. For e.g. Times of India follows strong brand loyalty in Mumbai and it was difficult for Hindustan Times to enter Mumbai. The newspaper industry has relatively high entry barriers due to the strong brand equity of existing players. Also, existing players have strong control over the distribution network, making it difficult for new players to enter. Newspaper Jagran Prakashan Times of India HT Media Deccan Chronicle The Hindu The Telegraph Deccan Herald Punjab kesari Place of strong hold Uttar Pradesh and Uttaranchal Mumbai Delhi, Bihar, Jharkhand Andhra Pradesh Chennai Kolkatta Bangalore Punjab Source: Companies, Equitymaster Political lobbing: Times of India made the political lobbing with ministers in the government for making the fdi restriction with other players and put pressure on the government to restrict the entry of FDI in India. If FDI is allowed in India allowed then its obvious that the domestic players competition will increase and their market share will be reduced but they restricted the entry for certain period only but in 2002 government open the sector for FDI. Tie up with foreign players: S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 75 To fight with domestic players and to increase the market share these local companies made a tie up with the foreign players due to which the flow of capital will increase as well as they will bring new technology and by this they will be far ahead of their domestic counterpart and due to this their market share will increase with not giving more stake to the foreign players and having the control over the business by having 3/4 of the member in the board of the company. Higher income for advertising in national players (regional players are earning less): Because the national players are having their foot hold in the whole country so if any individual or a company wants to give advertising in news paper they will go for national players only because of their presents every where the reach of advertisement is also increased and due to that it becomes beneficial for the company who is giving advertising in news paper but this kind of benefit is not available for regional players because they are present in particular region only and not in whole country so if a company gives any advertsient it will be restricted to that particular region only. Income of circulation: Income of circulation is higher than income from advertisement for vernacular paper and vice versa for national news papers that is the national players are having their majority because of their presence in whole country the companies are attracted to give ad in national level news paper due to this their reachness will be high because of higher number of reader and due to that they national players are having most of their income that is around 75% to 80% of their income is from advertisement only but they are having only 15% to 20% of their income from subscription because of their presence at national level and not having that much presence at the regional level but for the regional level the main source of income is from the subscription that is around 20% to 75% because they are having presence in particular region only and due to that they are not having much of their revenue from advertisement, their earnings are around 25% to 80% earning only. And it also depends on the presence of that regional player in the particular region. Marketing Strategy: New schemes in subscriptions by different news paper: now due to higher level of competition in the newspaper business the companies are implementing aggressive marketing strategies and coming with different marketing schemes due to which they are able to increase their earnings and can increase their market share for eg Divya Bhaskar had come in Gujarat with the schemes of coupons and gift after collceting that coupon for one month and due that it sales was increased tremendously but than after certain period of time its competitors like Gujarat S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 76 samachar and sandesh also came with the same scheme and at that time the sales of divya bhaskar was affected. Low switching costs increase rivalry: When a customer can freely switch from one product to another there is a greater struggle to capture customers. Low levels of product differentiation: It is associated with higher levels of rivalry. Brand identification, on the other hand, tends to constrain rivalry. Industry shakeout: A growing market and the potential for high profits induces new firms to enter a market and incumbent firms to increase firms to increase production. A point is reached here the industry becomes crowded with competitors, and demand cannot support the new entrants and the resulting increased supply. The industry may become crowded if its growth rate slows and the market becomes saturated, creating a situation of excess capacity with too many goods chasing too few buyers. A shakeout ensues, with intense competition, price wars, and company failures. Family owned businesses: Most Newspaper businesses in India are family owned and have a strong regional focus. Moreover, due to lack of funds and localized nature of the newspaper business, most of them have remained content in their own boundaries. For example Jagaran Prakashan is Market leader in terms of market share only because they have strongly grabbed the market of North to east region. Like wise every company have their own competent area. Newspaper Jagran Prakashan Times of India HT Media Deccan Chronicle The Hindu The Telegraph Deccan Herald Punjab kesari Place of strong hold Uttar Pradesh and Uttaranchal Mumbai Delhi, Bihar, Jharkhand Andhra Pradesh Chennai Kolkatta Bangalore Punjab Source: Companies, Equitymaster S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 77 • New entrants: Fragmented industry The regionalism aspect is clearly visible in the newspaper sector. The print media is further divided on the basis of the languages. Of the daily newspapers, about 46% are vernacular, 44% are in Hindi and 10% are English. Hindi and vernacular language newspapers offer a local and regional flavour to their readers. The content and circulation of English-language newspapers, on the other hand, are largely focused on the primary urban centers. Approximately 7% of the population in urban areas read English-language newspapers, compared to a readership of only 0.3% of the population in the rural areas. (Source: IRS 2005) In contrast to this, Hindi-language newspapers have a proportionately larger readership in rural areas, in addition to their strong presence in urban areas, with a readership of approximately 15% and 5% of persons in urban and rural areas, respectively. The newspaper industry is regionally divided, with existing players enjoying strong brand loyalty. For e.g. Times of India follows strong brand loyalty in Mumbai and it was difficult for Hindustan Times to enter Mumbai. The newspaper industry has relatively high entry barriers due to the strong brand equity of existing players. Also, existing players have strong control over the distribution network, making it difficult for new players to enter. Newspaper Jagran Prakashan Times of India Place of strong hold Uttar Pradesh and Uttaranchal Mumbai S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry HT Media Deccan Chronicle The Hindu The Telegraph Deccan Herald Punjab kesari 78 Delhi, Bihar, Jharkhand Andhra Pradesh Chennai Kolkatta Bangalore Punjab Source: Companies, Equitymaster Strong Entry barriers Newspaper business has extremely strong entry barriers owing to strong brand equity, readership loyalty and requirement for a wide distribution network. Moreover, as advertising revenue in a region is generally absorbed by the top-two players, in most cases it makes competition unviable. Cost of production is low anyone can easily enter in the industry: For any industry the major problem is cost of production. Here in this industry the cost of production is comparative less and that thing is positive for new entrants. New player can easily have their business Common Technology: In this industry role of technology is not that much visible. Only different types of machine for printing. Scanning & packaging. Low switching cost: Cost of newspaper is very negligible that’s why for an individual switching cost to newspaper is low. Intense Competition: Due to low cost production and low switching cost for buyer, there N number of newspaper and magazines are available which makes industry more competitive. In such industry where competition is very high, entry is not easy at all. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 79 • Threat from Substitute: A. Television to newspaper: 1. News channels In television constant update of the news is available so changes taken are speedy and get that information at that particular time only whereas in newspaper no at time update is available as well as you cannot able to get fresh news in newspaper. Top 20 news channels and their share in over all TV channel (source: TAM people meter system) 2. Marketer’s influence towards children to target: S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 80 In current era of advertising world, advertisers are focusing on children for everything. Companies s have seen that television advertising can make an effect on children which print advertising can not in 20 times (Source: equity master Aug 29, 2007) 49% stake of FDI in television (print only 26%) Television is the most competitive substitute of print media. The major plus point of television is that government has allowed FDI in television up to 49% while in print media it is only 26% allowed. This factor has the threat that television can grow faster with the help of foreign players. Regional channels through television players are penetrating in semi urban / rural area. • Advantages (i) It is most effective as it has an audio-visual impact: The biggest advantage of television as a medium of advertising is it has both the effect, audio and visual. An advertiser can use all the creative tools that one can use in advertisement. Another good thing with television advertisement is that it the only medium that uses two organ of human body which are highly effective, eyes and ears. While the print media advertisement only provide the visual effect but can not provide motion in it. (ii) With catchy slogans, song and dance sequences, famous personalities exhibiting products, TV advertising has a lasting impact. For example, who can forget Aamir Khan saying “ Thanda Matlab Cocacola” or Sachin Tendulkar in Pepsi advertisement. (iii) With varieties of channels and programmes advertisers have a lot of choice to select the channel and time to advertise. Now channel have also stands for specific area like News, Sports, Entertainment, Music channel. If we go more specific then we have Business News and Cricket as sports channel. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry (iv) 81 With regional channels coming up any person even illiterates can watch the advertisements and understood it by seeing and hearing is another good advantage of television. • Limitations (i) TV advertisements are usually expensive to prepare as well as to telecast advertisement. The most expense in television advertisement is of production of advertisement. An advertiser need to have director, models, music director and also need to book a production house which is very expensive in nature. Then after advertiser will have the expenditure of telecast of that advertisement. (ii) With almost every manufacturer trying to communicate their message through TV advertising the impact among the viewers is also reducing. Now-a-days people are switching on channels whenever there is a commercial break which is called Zapping in advertising terms. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 82 B. Internet blogging to Magazine 1. Increasing internet user Year over year the penetration level in internet is increasing up to 2005 it is increasing like anything but in year 2006 shows the decreased figure than year 2005 and then again year 2007 reveals increasing trend in internet penetration. The decrement in year 2006 can be because of change in its source. YEAR Users Population % Pen. Usage Source 1998 1,400,000 1,094,870,677 0.1 % ITU 1999 2,800,000 1,094,870,677 0.3 % ITU 2000 5,500,000 1,094,870,677 0.5 % ITU 2001 7,000,000 1,094,870,677 0.7 % ITU 2002 16,500,000 1,094,870,677 1.6 % ITU 2003 22,500,000 1,094,870,677 2.1 % ITU 2004 39,200,000 1,094,870,677 3.6 % C.I. Almanac 2005 50,600,000 1,112,225,812 4.5 % C.I. Almanac 2006 40,000,000 1,112,225,812 3.6 % IAMAI 2007 42,000,000 1,129,667,528 3.7 % IWS Source: JuxtConsult, 2007 As many numbers of people penetrate to use internet, it can be harmful for print media because as many number of people increase using internet big advertiser will be attracted towards it. If advertisers start to be attracted by internet than they S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 83 will give advertisement on internet, share of print advertisement will decrease because the budget of advertiser is fixed always. Also the number of people who are regular user increased by 15% in 2007 compare to 2006. Those who are occasional internet user are increased by 212% in year 2007. Urban India Internet Users by Type, 2007 2007 (M) 2006 (M) Total urban Internet users 30.32 23.6 Regular Internet users (at least once a month) 25.17 21.95 Occasional Internet users (less than once a 5.15 1.65 month) Growth (%) 28 15 212 Source: JuxtConsult, 2007 The some of the best things that newspaper providing is provided by internet also and people use internet for that also. As given in below table that number of people who are using internet for Job search, checking news and checking sports which are also given by newspaper. The interest and habits of individual is getting changed day by day. Urban India Online Activities by Regular Internet Users, 2007 (%) Rank Online Activity 200 7 200 6 Change 1 E-mailing 95 94 1 2 Job search 73 53 20 3 Instant messaging 62 37 25 4 Check news 61 53 8 5 Online music 60 48 12 6 Chatting 59 49 10 7 E-greetings 58 57 1 8 Check sports 57 35 22 9 Online games 54 35 20 10 Dating/friendship 51 27 25 Source: JuxtConsult, 2007 S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry Percentage Internet Penetration (YOY) 5.00% 4.50% 4.50% 4.00% 3.60% 3.60%3.70% 3.50% 3.00% 2.10% 2.50% 2.00% 1.60% 1.50% 0.70% 1.00% 0.50% 0.30% 0.50% 0.10% 0.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 % Pen. Year Classification of internet user based on users characteristics URBAN POPULATION URBAN POPULATION LITRACY POPULATION ENGLISH KNOWING PC LITERATE CLAIMED USER ACTIVE USER IN (MN) 250 205 77 65 46 32 Icube report 2007(source: PITCH FEB-2008) S. V. Institute of Management 84
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 85 Urban penetration(in mn) ACTIVE USER CLAIMED USER PC LITERATE ENGLISH KNOWING in mn LITRACY POPULATION URBAN POPULATION 0 50 100 150 200 250 300 amount Demographic break up of internet user working woman College student school going kids older man young man Non-working wonen (source: PITCH FEB-2008) Percentage 11 21 14 15 33 6 Demographic break up of internet user is showing the types of internet user and other details of them. It is also a noticeable point for magazine because the internet user includes woman (working and non working), college students, young man and old man. Almost majority is covered here. • Advantages (i) Information from all over the world is made available at the doorsteps. (ii) User can see the advertisement at their own time and as per their requirement. • Limitations (i) It is not accessible without a computer. (ii) It is not very suitable for general public. (iii) It is not suitable for illeterate and those having no knowledge about the operation of Internet. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 86 Online shopping: Internet facilitates an individual to purchase any product while he/she is watching an advertisement online. This facility is very useful when the target audience is based on high on ID personality as per Freudian theory of personality for the product like Domino’s Pizza. While in news paper the reader has to visit that shop and has to give the order. 2. Internet Blogging Another big threat of internet is ‘Blogging’ – a specific blog for specific group like: 1. 2. 3. 4. 5. News Cricket Movies Automobile lover Music and lots of other blogs are available online which are giving direct competition to magazine. Magazines were the only medium to reach to specific target segment one can reach to women segment to IT professional but after introduction of internet blogging. There is a positive thing for magazine is that still the internet blogging is not considered as a creditable source. The Top Ten sites internet users browse in India are the following: 1. 2. 3. 4. 5. 6. 7. 8. Yahoo Google India Google Orkut Rediff Youtube Blogger.com Windows Live S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 87 9. Rapid Share 10. Wikipedia (Source: http://www.sybrant.com/blog/?p=59) C. Radio: Radio with Newspapers Characteristics of Newspapers Newspaper brings 'immediacy' to a communication. Newspapers also have the authority of the written word, and are good at presenting detail. As a print S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 88 medium, the national press suffers from clutter and from the fact that the reader can and does edit ruthlessly to avoid advertising. What radio adds: In planning radio adds frequency with little zapping, and this is real frequency in that exposures take place in real time; radio also reaches non-readers so it can significantly increase coverage; in most sectors, adding radio also means increased share of voice thus overcoming clutter In communication Radio brings intrusiveness to a press campaign, and there is less ad avoidance; radio can bring to life ideas which might seem flat on the page; radio can more strongly convey the brand's tone of voice (important for service brands); radio brings brand messages closer to the individual, speaking in a more personal way than press; radio allows brands to emphasize specific key times of day (press reading is spread across the day) Geographic variation flexibility means radio allows geographical variation on top of a national press campaign Radio with Magazine: Magazines are useful to advertisers because of the relationship they have with the readers, who consume them in a personal way. They allow targeting by lifestyle and interest group. In many magazines the ads are seen as part of the magazine experience. Weaknesses of magazines include the fact that lead times can be very long depending on the title's frequency of publication, the high levels of clutter, and the reader's inclination to simply turn the page. What radio add: S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 89 In planning Radio adds frequency and there is little zapping; radio also extends coverage well beyond the magazine readership; radio allows tighter timing - time of day, day of week and even week of month; radio also offers a greater share of voice for most categories, which means overcoming clutter. In communication Radio brings intrusiveness to a magazine campaign, and there is less ad avoidance; radio can bring to life ideas which might seem flat on the page; radio can more strongly convey the advertising tone of voice (important for service brands); radio allows brands to speak to consumers close to certain activities driving, cooking, housework etc In detail Radio offers fast turnaround within the long copy deadlines of magazines, and the opportunity for geographical variations • Advantages (i) It is more effective as people hear it on a regular basis. (ii) It is also useful to illiterates, who can not read and write. (iii) There are places where newspapers reading may not possible, but you can hear radio. For example, you can hear radio while traveling on road or working at home; but you can not read newspaper. Similarly, while driving you can hear a radio but cannot read a newspaper. • Limitations (i) A regular listener may remember what he has heard. But, occasional listeners tend to forget what they have heard in Radio. (ii) The message that any advertisement wants to communicate may not be proper as there is no chance to hear it again immediately. There may be some other disturbances that distort communication. (iii) In comparison to Television, Radio is less effective as it lacks visual impact. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 90 D. Outdoor media: Hoardings While moving on roads you must have seen large hoardings placed on iron frames or roof tops or walls. These are normally boards on which advertisements are painted or electronically designed so that they are visible during day or night. The advertisers have to pay an amount to the owners of the space, where the hoardings are placed. Posters Poster are printed and posted on walls, buildings, bridges etc to attract the attention of customers. Posters of films which are screened on cinema halls are a common sight in our country. Vehicular displays You must have seen advertisements on the public transport like buses, trains, etc. Unlike hoardings these vehicles give mobility to advertisements and cover a large number of people. Gift Items from manufacturers When you buy a cycle, the shopkeeper sometimes gives you a key ring to hold the cycle key. Some jewelers give small purse or boxes when you buy a jewellery. Sometimes manufacturers give diaries, calendars, purse, etc. to buyers and prospective customers. In all these items the name, address and telephone number of the manufacturer, or trader or service provider as well as descriptions of the products in which they deal in are printed. These items are normally items of daily use given freely to the customers. While using, the user remembers the products as well as the producer. E. SMS advertising the new medium The latest trend in advertising world is SMS advertising, which is growing at very high rate only because of its own attribute. The attribute is that an individual will always check the SMS before deleting it. Even it will not have chance for zapping or zipping like in television commercials. Even by creating a database, the SMS advertising can reach to the target audience. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry Medium Reach Cost Strike Rate Television Radio Internet (Banner) Email PRINT MEDIA Billboards Moving Media Telephone Fax Standard Mailers Personal Interaction SMS One of the Highest Medium High High HIGH Medium Medium Medium Low High Low Very High Medium Medium Extremely Low HIGH Medium High High Medium High High Good Poor Dropping Extremely Low HIGH Medium Medium Medium Low Medium High EXTREMELY HIGH EXTREMELY LOW 91 EXTREMELY HIGH The above table reveals the comparison of SMS advertising with other mode of advertising. It is the only medium which has higher reach and strike rate with lowest cost while in Print media reach, strike rate and cost are high. For small advertiser the SMS advertising is more affordable and preferable, if advertiser wants to advertise his product in print medium there are vernacular newspaper and magazines available that have comparative less cost. • Bargaining power of Supplier: Few major players Though there are over 500 paper and newsprint production units in India, not even 10 per cent of theses are big or dynamic enough to turn out quality paper products at a competitive price. There are three major players in supplying the raw material of newsprint, which is used in printing the newspaper. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry • • • • • 92 Hindustan newsprint Ltd. (HNL) - Calcutta Tamil Nadu Newsprint and Papers Ltd. - Chennai MP Rama Newsprint Ltd.- Mumbai Mysore Paper mills – Bangalore NEPA papermills - Nepanagar Over 60 per cent of the newsprint production in India is concentrated with a few state-owned units by Hindustan Newsprint Ltd (HNL) and Tamil Nadu Newsprint and Papers Ltd (TNPL). Switching cost is low Switching cost of newsprint is very nominal and there are options that easily provide raw material with lower cost. Short supply The wood pulp which is used as a raw material of newsprint is in short supply. The biggest stumbling block for production units keen on attaining self sufficiency in wood pulp is the prevailing environmental laws, which prevent the industrial plantations of private sector on degraded land stretches. The Indian paper and newsprint industry has already urged the Government to amend the laws with a view to permit them to make use of the degraded land for raising plantations of fast-growing trees. But, the Government is yet to respond. So many of the leading paper mills in the country have taken to social forestry schemes under which small and marginal farmers are provided saplings and know-how for raising plantations of fast growing trees with an assurance of a buy back at a remunerative price. Many of the paper production units are now using bagasse, rice and wheat straw instead. Though an estimated 55-million tonnes of bagasse is available, only eight per cent is currently put to use for paper production. Many paper and newsprint production units are working towards becoming selfsufficient in wood pulp and other feedstock’s, used in paper manufacturing. Like Ballarpur Industries Ltd (BILT) has now drawn up a 20-million Euro plan for the modernization and augmentation of the facilities at Sabha Forest Industries (SFI) of Malaysia, acquired earlier. South India-based Seshasayee Paper and Board Ltd, is now close to commissioning its new pulp production mill designed for boosting the pulp production. Once the expanded pulp mill capacity is in place, the company will initiate work on boosting its paper manufacturing capacity with an additional S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 93 investment of Rs 3,000-million. The modernization programme will see its inhouse pulp production going up to 440-tonnes a day from 240-tonnes a day. Differentiated input (quality, cost value added ) Differentiation input is the only point which shows the bargaining power of supplier over here. There is at some part differentiation in quality of newsprint is higher in Hindustan newsprint Ltd. (HNL) – Calcutta and TamilNadu Newsprint and Papers Ltd. – Chennai that’s why they are having the nearly 60% share of newsprint business. Another thing they are in business from many years so they do have the learning curve and experience benefit. Major customers of suppliers. 1. 2. 3. 4. 5. Jagaran Prakashan BCCL Hindustan Times Deccan Chronicle Malaya Manorama Threat of forward integration: There is not any kind of chance of threat of forward integration of supplier in this industry because of: 1. Lack of Financial resources 2. Not having big Brand name 3. Not having experience in this business  Expansion in capacity Tamil Nadu government-owned enterprise TNPL has unveiled an ambitious action plan to invest Rs.10,000-million for expanding its production capacity to 4,00,000-tonnes a year from the present 2,45,000tonnes. TNPL known for its range of products including printing and writing paper and copiers and newsprint, is also mulling to put up a cement production unit that would make use of waste lime sludge generated from its paper-making operations and fly ash generated in its power boilers. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 94  Other Big player’s entry. On the other hand, Paper Boards and Specialty Papers Division (PSPD) of the FMCG (Fast Moving Consumer Goods) giant ITC has gone in for an innovative range of products with an eye on emerging as the largest outfit in the paper production sector. “Our specialization in producing valueadded paper boards has made us realise the huge potential for creating gifts and toys for 200 million children, from the new borns to 15 years of age,” is ITC’s aim. Its Bhadrachalam facility is now producing 4,00,00 tonnes of paper boards and fine paper a year. The PSPD has a unique business and revenue generation model. It started operations in 1979 in Bhadrachalam primarily because it was a forest area and provided access to raw materials. However, by early 80s strict regulation on the use of forest resources was introduced and this forced PSPD to look for alternative sources of raw materials. Thus it forayed into the farm forestry programme by tying up with small and marginal farmers to raise plantations of fast growing trees. Export of paper and other things are ban so suppliers power will increases due to domestic purchase: Bargaining power of Buyer: There can be three types of buyer in the print media industry and they are as below: 1. Advertising Agencies 2. Small and medium companies S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 95 1. Advertising agency: The advertising agencies are the first layer buyer of this industry. Basically they play the role of mediatory, they contact different corporate or corporate contact them to make corporate promotion strategy and promotional activity also. Agency make advertisement and they also contact appropriate media to publish or telecast the advertisement. The advertising agencies do have little influence on print media players because they are the mediatory one and because of them industry player gets advertiser. Even the switching cost for agencies is not much higher but again the preference of advertiser also plays a vital role over here, if the newspaper or magazine does have strong brand name like ‘TIMES OF INDIA’ then agency can not suggest advertiser not to advertise on that particular newspaper. 2. Small and medium companies: The small and medium companies can not afford the expense of agencies. So, they craft the advertisement in house and then contact newspaper or magazine to publish their advertisement. In such situation they do not have any influence on newspaper or magazine. 3. Consumer Consumers are the common people who purchase newspaper or magazine. They purchase it for news purpose or reading habit. They purchase it in very nominal prices so they do not have any influence to print media. They are the real consumer and only because of them industry is having existence but they do not have influence more than content of any news which is the most key success factor of any newspaper or magazine. Overview of Five Force Analysis Threat from new entrants/entry barriers Rivalry against competitors Threat from substitute S. V. Institute of Management Bargaining power of buyers Bargaining power of suppliers
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry Low Low to moderate Moderate Moderate to high High 96 √ √ √ √ √ • B C G Matrix The Boston consulting groups (BCG) Growth-Share Matrix. One of the first and best known of the portfolio model is the growth share matrix developed by the Boston consulting group. It analyzes the impact of investing S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 97 resources in different businesses on the corporation’s future earnings and cash flows. Here the vertical axis indicates the industries growth rate and the horizontal axis shows the business relative market share. The Boston consulting group’s model of print industry Jagran Prakashan 2 1.5 BCC L 1 1.14 H T 0.9 0.87 0.5 0.12 Publication group Jagran prakashan Bennett Coleman & co The Hindustan times Deccan chronicle group Malayalam Manorama group market share 35% 30.71% 12.18% 6.60% 5.18% S. V. Institute of Management 0.3 0.35 D C A B P M M o t s 0.1 0 0.19 0.18 0.15
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry ABP group others 98 6.28% 4.05% The growth share matrix assumes that a firm must generate cash from businesses with the strong competitive position in the mature market. Then it can fund investment and expenditures in industries their represents attractive future opportunities. Thus, the market growth rate on the vertical axis is a proxy measure for the maturity and attractiveness of an industry. The model represents business rapidly growing industry as more attractive investment opportunity for future growth and profitability. Similarly, the relative market share is a proxy fir its competitive strength within its industry. It is computed by dividing the business’s absolute market share in dollars or units by that of the leading competitor in the industry. Resource Allocation and Strategy Implications of print industry Each of four cells in the growth-share matrix represents a different type of business with different strategy and resource requirements. In the B C G matrix of print industry the overall growth of print media is shown is 21% Here we had taken 6 top companies having the maximum market share .the companies are 1.jagran prakashan 2.bennett Coleman & co ltd. 3.hindustan time’s 4.malayam manorama 5.ABP group ltd. & others. Here from the matrix sheet it has been seen that most of the companies are in the growth stage. And after calculating the relative market share it has seen that most of the companies fall in the star group or the build (question mark) group. 1. Strategy recommendation for star (high growth, high market share): Stars generate large amounts of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate; therefore the cash in each direction approximately nets out. If a star can maintain its large market share, it will become a cash cow when the market growth rate declines. The portfolio of a diversified company always should have stars that will become the next cash cows and ensure future cash generation. Here in print industry jagran prakashan is the market leader with the growth & share of 18% and 35% respectively. Its have newspaper dainik jagran in Hindi language which is highest sold daily in India with a strong base of 16.5mn readers (IRS R2 2007) and a daily circulation of 2.5mn (ABC JJ 2007) First published in 1942 as Jagran, the paper is now published in in 37 editions (five launched in the S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 99 last couple of months) across 11 states. Dainik Jagran enjoys the distinction of maintaining its lead over the other Hindi newspapers, and its readership base is substantially higher than the Top-five English dailies combined. JPL has selectively entered the English Print Media with the launch of two new offerings viz., City Plus (English weekly infotainment) and I-Next (bilingual compact tabloid) in its existing as well as new markets. It also has Hindi magazine sakhi which have high market. And also it joined with the TV 18 for Hindi/regional business dailies .its highly active in northern part of India. Strategy for leader (jagran prakashan):  Expand (cover) the market: As per readership survey done by IRS, It clearly shows that Rajasthan and chattishgarh are the open market for the jagran prakashan. Here it interviewed 13654 readers in Rajasthan. It clearly shows that dainik bhaskar is the market leader and it covers 5744 reader in survey. And in chattishgarh it interviewed 2606 reader dainik bhaskar is the market leader it covered 1095 readers. So its shows positive market foe the jagran prakashan. Because jagran prakashan cover entire Hindi belt and it already cover 40% of the population there is one survey by angel research shows that 68% of the population of the India read Hindi language also low newsprint cost help the jagran prakashan because it purchase 65% newsprint from the domestic market. So its shows positive market for the jagran prakashan. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 100 New edition and alternative media: For maintain the market share jagran prakashan should have produced new edition and try to add more supplement to attract the costumer. Because print media companies enjoy extremely high operating leverages once their edition launches stabilized and start generating strong advertising revenue. Due to it generates free cash flow and thus they invest certain alternatives which generate good income for them. Radio is the growing industry right now. Growth of radio industry in 2007 is 325 as compared 2006 are 28% it shows 4% increased in one year, also its competitor H T MEDIA & BCCL have there own radio station which shows positive growth. So radio should be a profitable venture for the jagran prakashan. 2. Strategy recommendation for build(question mark): Question marks are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is large net cash consumption. A question mark (also known as a "problem child") has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 101 analyzed carefully in order to determine whether they are worth the investment required to grow market share. In this group relative market share of the company is lower and market growth rate is high. This group shows market opportunity in the market. All players who are come under this group are trying to increase their market share. Here companies like BCCL, HT EDIA, D C, ABP LTD, MM & others are come Strategies for Bennett Coleman & co: As per growth wise Bennett Coleman & co is the highest in India with the growth rate of 22% which is higher than market leader jagran prakashan.market share of BCCl is 30.71 which is lower than market5 leader. The Times Group is one of the largest media services conglomerates in India. It is headed by brothers Samir and Vineet Jain of the Sahu Jain family. It reaches out from: 11 publishing centers, 15 printing centers, 55 sales offices, Over 7000 employees, 5 dailies including two of the largest in the country with approx 4.3 million copies circulated daily , 2 lead magazines , 29 niche magazines ,Reaching 2468 cities and towns , Turnover in excess of USD 700 million .readership of times of India is less then dainik jagran because of language problem. Strategies:  Come with flanker product in northern region: Northern region is the very big region. In the northern region HT MEDIA and Jagran Prakashan have very good market share. Here BCCL still doesn’t find a space at northern region. So if it have ti grab the market share it should have to come with the newspaper with specific hindi language. Because in the northern part most of the people prefer hindi language newspaper.  AD rates: Compare to the other BCCL charged higher rates. So its shows negative impact in the revenue growth .there is one survey done by Angel research shows that times of India loose it advertising revenue up to 5% in the year 2006 because of high ad rates, S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 102 Strategy for (followers) HT Media, Deccan Chronicles, Malayala Manorama and A B P Ltd.:  LESS sensitive towards newsprint prices : HT MEDIA and Deccan chronicles are high sensitive toward newsprint price. News print cost of Deccan chronicles is 432cr and cost of H T MEDIA is 204. which is higher than market leader. So news print cost of the both company account almost half of the company’s expenditure. Because Deccan chronicles purchases 90% of its newsprint from the international market. And HT MEDIA purchase 75 % of its newsprint from the international market. This shows the impact on its revenue. Because newsprint price in international market is rise up to 10 to 12% its shows 2% increase in the newsprint price. Because of the hike in price company have to pay more money to the newsprint provider. So from our point of view follower should have to purchase newsprint from the domestic market, newsprint quality of the domestic newsprint is very good . even B C CL and Jagran prakashan also purchase newsprint from the domestic market.  Established relationship with the local advertiser and the advertising agency: Most of the revenue come from the advertising. So it is important to maintain relationship with the advertiser and advertising agency.  Editorial content: Content should be specific and attractive. Content of the HT MEDIA and Deccan chronicles magazines and newspaper is not very good. So for improving the content it should have hire intelligent and creative editors and journalist. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 103 G.E 9 CELL Matrix of Print Media Competitive Strength/Market Position Business strength weightage BCCL Score HT Score Jagran Score Market share 0.2 8 1.6 8 1.6 10 2 Cost of production Bargaining power of buyer Bargaining power of supplier 0.1 8 0.8 8 0.8 8 0.1 8 0.8 7 0.7 0.1 7 0.7 7 0.15 10 1.5 0.2 9 0.15 8.5 Profitability Growth Brand image Score M.M Score 6 1.2 4 0.8 0.8 7 0.7 5 0.5 10 1 6 0.6 6 0.6 0.7 9 0.9 6 0.6 5 0.5 6 0.9 8 1.2 7 1.05 6 0.9 1.8 7 1.4 8 1.6 6 1.2 5 1 1.275 8 1.2 9 1.35 5 0.75 6 0.9 8.475 7.3 D.C 8.85 6.1 5.2 Industry Attractiveness Industry Attractiveness Weightage Rating Score Growth 0.25 7 1.75 Competition 0.20 6 1.20 Opportunity/Threat 0.25 7 1.75 Political factor 0.15 4 0.60 Uncertainty & Risk 0.15 5 0.75 Total 6.05 For the GE nine cell matrix on the Y axis we have define Industry Attractiveness that is measured on the parameter like Market Growth, Market Size, Industry Profitability, Intensity of Competition, Government Rules and Regulation and Domestic Economic Condition. Market Growth is important because by this parameter we can find that that industry is growing at which rate if is higher then GDP growth rate then industry Growth is Good define Kotlar and it is lesser then GDP growth rate then it is considered as a attractive market. India’s GDP of last three year is about 8% while market is growing at a rate of 18-19% last eight Years. Source: http://www.assocham.org/prels/shownews.php?id=1281 S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 104 GE 9 Cell matrix JP HT BC CL jp D C M. M Competitive Strength Point Industry Attractiveness GE9 cell matrix it is about the study of the industry attractiveness that is about if the investment in the industry is made than will it be profitable to stay in that industry for a long period of time and will be able to earn a good profit. Generally 9 cells are studied for position of that industry and its future conditions. This includes study of all the factors affecting the industry like political factors which is one of the main factors taken in to consideration while studying the attractiveness of that industry for print media the factors taken in to consideration FDI limit that is 26% for news segment and 100% for non news segment. This may be prove to restrict or may be proved to be beneficial for the company. Even the government may put restriction by putting control over the functioning of the companies through several norms and regulations putting ban on certain kinds of advertising. And due to that the political factor has been given the weightage of 15% out of 100%. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 105 . Growth rate: Then after growth rate of that particular industry is taken in to consideration because on the basis of the growth rate only the position of the company in the product life cycle can be known. In print media industry the growth is taken to study before investing last 4 years growth is shown in the below figure. Growth rate of print media ad 22.81 25 percentage 20 15.3 21 15 15 Growth 10 5 0 2004 2005 2006 2007 year (Source: Pitch February 2008) It shows that there are ups and down in the industry but the industry is in the increasing stage which is seen from the year 2004 to 2007. And the weightage given to growth of the industry 25%. level of competition It is very high in the industry and the players are always fighting for making the highest share and covering the larger market and try to earn maximum from advertisement and circulation and due to that more weightage is given that is of 20%. Opportunity and threat: It related to that particular industry are taken in to consideration before entering in to that particular industry, it just like pros and cons of that industry if the opportunities in that industry are more than the industry is in the growth stage. In the print media also there are many opportunities available as compare to threat. Like as India is a developed country industries are growing and due to that to S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 106 make buyer aware about their product and due to that income for print media is going to increase. Even the literate population is also increasing in India. Due to that readership of newspaper will increase. But as the literacy level increases the people are more attracted towards the internet usage which is one of the biggest for the print media advertising. . One of the biggest opportunities for the print media advertising is that still 359 mn literate adults don’t read any publication. Now number of 24*7 readership has been increased which is giving constant update of news and it is the major threat for print media. The weightage given to opportunity and threat are 25% because they are playing important role for print media advertising. Uncertainty: If in any industries if uncertainty is more, than development of that industry is quite difficult, but there is no factor as of uncertainty in the print media advertisement, though external factors are affecting to the industry but they are common for all the industries. Here uncertainty is less so it is given less weightage of 15%. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 107 Business strength And on the basis of the information the ranks are given to the factors taken in to consideration which are necessary to study the attractiveness of the industry, the highest rank is given to those factors which are very important for the industry and which affect the development of the industry. the highest rank is given to those factor which are very important for the development of that industry. In this industry the highest ranks are given to the factors like growth rate and level of competition which plays an important role for the development of the industry. Now after considering industrial strength and its attractiveness, the study of different players and their position in the industry is necessary to be studied on the basis this study position of different players is studied by taking certain factors taken in to consideration and different weight are assigned to different factors. Now the first point taken in to consideration is the relative market share of all the major players on the basis of that the position new entrants can be known. And due to that highest weightage is given of 20%. And on that basis different ranks are given to different players in the industry on the basis of their market share in the industry. Company name Jagran Prakashan BCCL HT D.C M.M Market share 35% 30.71% 12.18 6.6% 5.18 Rank 10 8 8 6 4 Cost of production is an important point to study the earnings of that company, if the cost of production is high than it will directly affect the earning of the company. But it was seen that in the cost of production it includes cost of print includes paper, ink and plates. Generally if price of any production material increase it will affect to all the players of the industry, eg increase in overall price of paper affect the profit of all the players.And the company who is facing this kind of problem less are given the highest rank and the weightage given to this factor is 10%. Bargaining power of buyer and supplier: S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 108 Bargaining power of the buyer is low for the industry and due to that less weightage is given of 10% only. And even the bargaining power of the the supplier is also less in India because in the industry most of the newsprint is imported and it is 70%, so less weightage is given of 10%. Profitability: It is the major point to be taken in to consideration if the current players are earning good profit then other players will be attracted to invest in the business, but if the current players are facing difficulty in earning good profit then it will not motivate others to invest in the print business and on that weightage is given of 15%. And the ranks are given on the basis of their profit where BCCL got the highest rank of 10 and Malaya manorama got the lowest rank of 6. Growth: The growth factor is taken in to consideration that in future is there any further growth in the business and on that basis it is decided whether to invent in the business or not, here the growth of BCCL is higher that is of 22% so BCCL is given the highest rank, then after Jagran prakashan got the share of 20% and rank given is 8, the lowest rank given to MM of having growth of 12% and the rank given is 5th. Weightage given to the growth is 20%. Brand image: The weightage given to the point is 15% because in many areas sales are depend on the brand image of that particular company. Here jagran prakashan is given good brand image in whole northern region and having 40% of India’s readership and it is given the highest rank and than after the highest rank is given to Times of India of 8.5, and the lowest rank is given to Deccan Chronicle because of its late try in many southern region and the rank is 5th. And after the given weightage the score is calculated on the basis of which the allotment is done in different cell of the matrix and on that basis the position of that particular player can be known and from the 9 cell matrix of the print media the position of the top 5 players can be known and on the basis of their score the allotment is made in the different cell, Jagran prakashan, Bennett and columan company Ltd and Hindustan Times lies in the same cell of high priority cell and in that the company are in growth and build stage. They are in this cell because they are having the highest market share and properly using their resource properly. But the Deccan Chronicles and Malaya Manorama lies in the cell of medium priority where the hold is required because they are facing high competition, not using proper resources, and newsprint cost of the daccan S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 109 chronicles is higher because it imporet 90% of the newsprint from the international market. Here the benefit for the daccn chronicles is that it can easily import from outside at low cost. So if these companies properly use the resources then only they can move to upper cell and eve they have to study properly the region in which the leader are not present in that area these player can cover the market share. Driving Force S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 110 The force due to which the industry is driven and due to which its earning is directly affected, forces may be directly or indirectly affecting working of the industry. The driving force for the print media are government policies, literacy level, increase in industrialization, increase in the young population. Government policies: Government policies directly affect the working of the industry that is if the government make the smaller change in the policy related to media it will directly affect the print media. When in budget the service tax on the on the space for advertising was increased from 10% to 12% for the television but it was not increased for the space for advertising in print media and due to that cost for advertising in television media and due to that there was increase in the demand for print advertising and it is having the maximum reach to different region of the country which is beneficial for the corporate. Growth of Small Scale industries: From the above table it is seen that the growth of small scale enterprise increases due which number of advertising in the news paper will increase because generally small SMALL SCALE ENTERPRIZE No. of units ( lakhs) 130 125 128.44 120 123.42 115 118.59 110 105 113.95 109.49 100 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 Source: www.rbi.org.in, Economic Survey 2007-08, chapter 8 Scale Company would like to target the customers in the regional area only and the print media is the best source for reaching the regional areas of that particular state, with the help of advertisement they would like to increase their sale and the regional level of newspaper are the best platform to reach their target customers. Increase in level of literacy: S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 111 Now the level of literacy also increases in India and due to that it is directly related to increase in revenue of the print media, because people are more interested to know about things going around them, and now the newspaper are also providing more information about stock exchange and people are also attracted to know about the stock market which also plays an important role in the increase of print media and so print media is directly affected by the increase in level of literacy. Revenue Drivers S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 112 Generally most of the company depends on the revenue to grow further and to increase their business, if the company is not able to earn notable revenue at that time its future is under scanner. In print media advertising the revenue drivers are the major sectors that spend in print advertising. Here we have mentioned all the top 10 sectors that spend more in print advertising. They are as given below: Top Sectors % Share Education 17% Services 12% Banking/Finance/Investment 10% Auto 7% Retail 5% Corporate/Brand Image 4% Durables 3% Personal Accessories 3% Telecom/Internet Service Providers 2% Personal Healthcare 2% (Source: Adex India (A Division of TAM Media Research)) Education Sector 14% rise in Print advertising of Education sector during Jan - May '08 compared to same period in 2007. ‘Educational Institutions' garnered a high share of 67% in Print during Jan - May '08. Tamil Nadu leads in advertising of Education sector in Print during Jan - May '08. ‘Planman Consultant India Pvt Ltd' was the number one advertiser of Education sector in Print during Jan - May '08. Educational Institutions' had max. share ( i.e. 67%) of overall Education sector ad pie in Print followed by 'Coaching Centre/Competitive Exam' and 'Computer Education' with 15% and 10% share respectively. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 113 (Source: Adex India (A division of TAM Media Research) Among the Sub Categories of Education sector, max. Advertising growth of 46% was registered under 'Computer Education' in Print followed by 'BPO/Call Centers' and 'Vocational Training Institute' with 40% and 32% share respectively during Jan - May '08 compared to Jan - May '07. ‘Planman Consultant India Pvt Ltd', 'Vellore Institute of Technology' and 'SRM University' were the top 3 key advertisers of Education sector in Print during Jan - May'08. During Jan - May '08, Tamil Nadu, Andhra Pradesh and Uttar Pradesh were the Top 3 states in advertising of Education sector in Print. Top 5 states accounted for 57% of overall Education sector advertising in Print during Jan - May '08. During Jan - May '08, Non Metro Newspapers had the highest share of Print advertising of Education sector i.e. 63% followed by 'Metro' and 'Mini Metro' Newspapers with 24% and 13% share respectively. Since 2004, there is steady increase in number of advertisers of Education sector in Print. Service Sector: Services sector includes categories like Properties/Real Estate, Internet /SMS service, DTH Service Providers, Hospitals/Clinics, etc. Top 5 segments accounted for more than 75% share of overall Services sector Print advertising during 2007. ‘Hospital/Clinics' and 'Travel & Tourism' had close competition for the 2nd position with 15% and 14% share respectively during 2007. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 114 (Source: Adex India (A division of TAM Media Research) ‘Tata Sky’, 'New Era Entertainment Network' and 'Air India' were the top 3 advertisers in Services sector in Print during 2007. During 2007, 4 of the top 10 advertisers in Services sector belonged to 'Travel & Tourism' segment and 3 from 'Airlines' segment. The top-10 list of new entrants in Services sector advertised in Print comprised 6 brands of 'Properties/Real Estate' and 3 from 'Internet/SMS service' segment. Banking/Finance/Investment: Print advertising of 'Financial Industry' up by 10% during FY 2007-08 compared to FY 2006-07. Banking & Financial services' segment had the largest share of 63% of 'Financial Industry' in Print during FY 2007-08. ‘SBI' was the number one advertisers in 'Financial Industry' advertising in Print during FY 2007-08. Metro and Non Metro Newspaper together accounted for 90% of overall Financial brands advertising during FY 2007-08. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 115 (Source: Adex India (A division of TAM Media Research) Top 10 Financial brands share aggregates to 14% of overall 'Financial Industry' advertising share in Print during FY 2007-08. Public Issues of 'DLF ','Emaar MGF', 'Reliance Power' and 'Omaxe Ltd' made it to the Top 10 brand list of 'Financial Industry' during FY 2007-08. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 116 Opportunities Increasing readership The readership in print media in the newspaper and magazines sows favorable data for the advertising in newspaper and magazine. 45 % of any publications readership is in the urban area. The above graph shows that, even globally the majority people are interested in reading hardcopy rather than the digital content in the all age groups. There is appositive impact in the newspaper and magazine advertising industry, is that it boost up the advertising publishing in the print media. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 117 According to the survey majority respondents including male and female denies that they will not read their favorite magazines or newspaper if it will be available in digital form. This will have the good opportunity for the newspaper and magazine advertising even globally Literacy levels According to NRS 2006, literacy levels in India have risen from 69.9% to 71.1%. Literacy levels in urban areas at 85.3% witnessed a 90bprisewhereas rural areas at 64.8% witnessed a higher rise of 120bp during2006. Moreover, readership (dailies and magazines combined) increased to222mn from 216mn. This has led to significant scope for growth for newspaper publications in terms of untapped potential readers. The fact that out of the359mn people in India who can read but do not currently read any publication, 68% can read Hindi indicates strong potential for readership growth. Also, 20mn of these literate non-readers belong to the upscale SEC A and B segments (higher socio-economic brackets), which can help publishers attract strong advertising revenues. Geographical Expansion The leading players are expanding their geographic area in the country as seen in the following table Publishing House HT Media & BCCL (JV) New Edition MetroNow Segment City-centric Daily Tabloid S. V. Institute of Management Region Delhi
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry Ht Media (JV with WSJ) Mint Times of India Economic Times (Gujarati) Bangalore Mirror City Plus Times of India Jagran Prakashan 118 Financial Daily Delhi, Mumbai, Bangalore Regional Financial Daily Gujarat Daily Tabloid Free English Infotainment Weekly Jagran Prakashan I-Next Bilingual Daily Business Standard Business Standard Regional Financial Daily (Hindi) Deccan Chronicle Financial Financial Daily Chronicle Source: PWC Waterhouse report Bangalore Delhi/NCR, Bangalore UP, Uttaranchal Delhi, Mumbai Hyderabad, Chennai Because of the geographical expansion done by the major players the reach of newspaper will also increase and the local as well as national advertiser will get the benefit of this expansion. The expansion is also done world wide of Indian newspaper in which they are publishing the advertisement. The players of newspaper and magazines are also targeting the NRI population and publish the newspaper and magazine. For e.g. List of overseas editions for many dailies 1. 2. 3. 4. 5. Sandesh – weekly in Chicago ABP – Fortnghtly in US Malyalam and Madhyaman Manorama – daily in Dubai, Buhrain Gujarat Samchar – weekly in New York Divya Bhaskar – Fortnightly in Newyork Demographic expansion Age % of population Under 15 years Between 15-59 years Above 60 years Population Demographic Shift 1997 2002 37.20% 33.50% 56.10% 59.30% 06.60% 06.90% S. V. Institute of Management 2007 30.00% 62.30% 07.50%
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry POPULATION DEMOGRAPHIC SHIFT 70 POPULATION (%). 60 62.3 59.3 56.1 119 50 40 37.2 33.5 30.0 30 20 7.5 6.9 6.6 10 0 1997 2002 Under 15 years Between 15-59 years 2007 Above 60 years There is an increase in the demographic population shift because of this the consumption of newspaper and magazine is also increased and the advertiser will have the opportunity to giving the advertisement in particular segment. The advertisement related to younger children could be shown in their supplements like Bal Bhaskar issued by Divya Bhaskar. The advertising targeting to the group of above 60 years age group like advertisement of financial services, insurance, etc. Demographic Transformation Of India (In USD) POPULATION (MILLION) 2001200502 06 2009-10(E) Rich (Above 115,000) 2 9 20 High Income (57,000 – 115,000 9 17 33 Consuming class (23,000 – 57,000) 48 74 120 Working class (10,200 – 23,000) 221 285 404 Needy (Below 10,200) 726 710 613 (Source: FICCI PWC Research) S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 120 Population (In Million) Demographic Transformation of India 726 710 613 800 700 600 500 400 300 200 100 0 2 9 20 9 17 33 120 48 74 404 285 221 Rich (Above High Income Consuming 115,000) (57,000 – class 115,000 (23,000 – 57,000) Working class (10,200 – 23,000) Needy (Below 10,200) Income As there is a continuous increase in working class and needy class, the reach ness of newspaper and magazines will increase in the offices, at homes, during the traveling, etc. Service Tax There is not any service tax is applied on the print ad space, as a result any big player can have the opportunity to give the advertisement in full page and it can also increase the frequency of the advertisement. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 121 Threat Online Advertising Online advertising is a one type of digital form of print advertising, the advertising spend on internet is also increasing at 32 % in 2007.Many companies in India started online advertising to reach the public faster- it is in fact, a supplement to traditional advertising. For example, to promote admission to professional courses or for various competitive exams, the young and educated segment has to be tapped. The changeover has started and experts see a promising future for online advertising which is growing rapidly in India as the internet users increases, Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 No. of Internet Users in India 14,00,000 28,00,000 55,00,000 70,00,000 1,65,00,000 2,25,00,000 3,92,00,000 5,06,00,000 7,20,00,000 12,00,00,000 Source: Advertising Express, August 2008, E-Advertising, pp. 17 Even the various sectors are also interested to do the advertisement online, as the following table shown. The online banner ad spend per Internet user is only about $ 1.20 (Rs 52.50), which could be $ 1.60 (Rs 70) by the end of the year, Sectors Telecom Financial Services Technology Travel Automobile Consumer Durables FMCG Online Services Entertainment % Spends 6 24 11 12 11 9 5 11 7 Source: Advertising Express, August 2008, E-Advertising, pp. 17 S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 122 Almost all the leading dailies have their internet editions. It is used by the advertisers to reach the NRI. Many dailies provide “e-paper” version with search options like • Monetized by dailies like Hindu • Free access in the case if TOI and HT Declining reach in Urban For any newspaper or magazine the most powerful factor is its reach that how many people read it in particular area or region. The reach of print media in urban area is declining in was 46% in 2007 compare to 48% in 2006. This figure shows the negative trend to newspaper and magazine players 24*7 news channels on TV. As the numbers of news channels are increasing, it will create a threat for the newspaper, because the frequency of the advertisement is high as compared to the newspaper. In the magazine the lead time is very high, so it might be not preferable for the industry players for giving the advertisement. Blogging on Internet As the different types of magazine target to the different audience, the blogging on the internet is also target to groups with equal interest. So it will create the competition for the circulation of magazine and it will have an impact on the advertiser also. The advertiser will go for the online advertising. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 123 Key Success Factors Reach ness: As compared to the other media vehicle, the reach of newspaper and magazines are high. According to the RNI there are 18, 07, 38,611 different newspaper copies are circulated daily, including urban as well as rural area. 8,668 no of magazines are available in different language in different region in India. The circulation of • Business Today - 4,16,000 • Business India - 2,91,000 • Out Look Business- 2,26,000 • Business World – 2, 24,000. Advertisers have the different target segment according to their product need and they can have the benefit of these high reach in of the magazines Preferred Segmentation The newspaper and magazines have their own different segments. The advertisers have a great benefit for this, because they get the proper media vehicle for giving their advertisement to their targeted audience. For example the ads related the beauty products will target the women’s magazines. Corporate advertisers will prefer the Business magazines. The Times of India has launched the “Education Times” as additional supplement, in which it has advertisement of all Educational Institution, job Portals, etc. S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 124 BIBLIOGRAPHY BOOKS : 1. Jaishri Jethwaney and Shruti Jain, “Advertising Management”, Oxford higher educatio, 2006, pg 467 – 486. 2. Kruti Shah and Alan D’souza, “Advertising & Promotion an IMC perspective”, Mcgraw Hill companies, 2008, pg 670 – 674. 3. Anil Varma, “Advertising Industry Trends and Regulations”, Prentice Hall of India Pvt Ltd, 2004, pg 12 – 88. MAGAZINE : 1. Kruti Shah, “An overview of Indian media”, IMPACT, November 2008, pg 17 – 20. 2. A Sengupta and Noopur Agrawal, “ E – Advertising “, Advertising Express, August 2008, pg 12 – 18. 3. Deepti Aggarwal, “Print continuing the growth streak”, Pitch, February 2008, pg 46 – 52. 4. Pitch bureau, “Television Holding the ground’, Pitch, February 2008, pg 56 – 60. 5. Jayshree Maji, “Outdoor Gaining from clutter”, Pitch, February 2008, pg 64 – 66. 6. Deepti Aggarwal, “Internet weaving a wider net”, Pitch, February 2008, pg 70 – 74. 7. Purva Panchal, “Radio More music to ears”, Pitch, February 2008, pg 78 – 82. 8. Chandrashekhar and N Shridhar, “Online advertising”, Advertising Express, September 2008, pg 33. REPORT : 1. Economic survey 2007-08, Chepter-8 WEBSITE : 1. www.ciiionline.org S. V. Institute of Management
    • In Depth Study Of Newspaper & Magazine Advertising In Advertising Industry 2. www.indiamart.com 3. www.economictimes.indiatimes.com 4. www.Thompsonrouters.com 5. www.adindia.com 6. www.adex.com 7. www.afaqs.com 8. www.equitymaster.com 9. www.pib.com 10. www.nic.com 11. www.angelbroking.com 12. www.tamindia.com 13. www.exchange4media.com S. V. Institute of Management 125