It?S been a difficult year with lots of twists and turns for the Indian economy, and specifically for the Indian advertising, media and marketing industry with slowing consumer demand and rising interest rates impacting its growth story. Growth projec-tions made in the beginning of 2011 had to be scaled down as for various industries but we ended up achieving lesser. Alongside, the industry continued to grapple with issues such as measurability, lack of right content, stringent regulations even as digitisation remained a distant dream.
The year 2012 is expected to be even more challenging as India and rest of the world prepares to face another slowdown brought on by the European debt crisis, rising fuel prices, depreciating rupee, among other factors. To understand the specific challenges waiting for the industry and the opportunities therein, BrandWagon invited eight experts?LV Krishnan, CEO, TAM Media Research; Apurva Purohit, CEO, Radio City 91.1 FM; Siddharth Roy Kapur, CEO, UTV Motion Pictures; Kunal Bahl, founder and CEO, Snapdeal.com; LK Gupta, chief marketing officer, LG India; Damodar Mall, president?integrated food strategy, Future Strategy; Ashok Lalla, leader?digital, South Asia, Mindshare and Pramod Bhandula, managing director, JCDecaux India?to identify the top trends for 2012 in the fields of television, radio, films, e-commerce, marketing, retail, digital and out-of-home (OOH) advertising, respectively. And it does seems that keeping costs low will be the survival mantra for the new year.
In 2012, the function of marketing will have to undergo radical changes to adjust to the uncertainty of the current global economic scenario. ?For instance, brands will rely more on below the line initiatives because ATL has higher chances of spillover. With pricing under pressure, promotions by brands will be looking to increase total value of purchase for consumers?gifts, value-additions with complementary products, bundling, etc.? says LG?s Gupta. In retail, most of the organised players will focus on food with a greater thrust in 2012. According to Future Strategy?s Mall, dependency of techno-logically advanced cold storage will reduce the number of visits to kiranas and supermarkets for day to day food requirements.
?While multiplexes have penetrated the metros successfully, 2012 will see films making inroads in hinterland with satellite technology. The New Year will also witness marketing and public relations gaining importance,? says Kapur of UTV Motion Pictures talking about the changing trends in the films industry.
Read on to know more about the sector-specific trends.
TELEVISION
‘Content marketing to hold the key’
LV KRISHNAN
CEO, TAM Media Research
– Rural India to lead from the front: The last couple of years saw a new growth spurt led by digitisation. Today, the TV scenario in urban and rural India in terms of penetration of the medium does not look different ? for 68 million TV homes and 60 million C&S (cable and satellite) homes in urban India, there are 73 million TV homes and 56 million C&S homes in rural India. What has queered the pitch in favour of rural India is that one in three C&S homes in rural India has turned digital as compared to one in seven C&S homes in urban India! Precisely for this acceleration, TAM?s TV measurement panel expansion is gearing up to cover rural India in the coming months.
w Audience fragmentation not so soon: While choice of content is on the rise, the much awaited fragmentation of audience is not necessarily going to come true, at least in the immediate short term. Analog distribution networks are running to capacity and are adding new channels only at the expense of old ones through replacement. So new channels are adding audiences only on the digital platforms, where we still see growing fragmentation! But given that analog networks on an all-India level have a larger market share (over 75% skew), fragmentation is decelerating pan-India.
w Need to educate people on digitisation benefits: Educating the common man about the advantages of digitisation lies ahead. Even in the four metros, it is only the cable TV homes within the city limits that will necessarily need to access cable TV feeds via a digital set top box (STB) before June 2012. This means, full digitisation of the 7 million cable TV homes in the four metros of which 2 million are receiving the TV channel
feed via digital STB will mean an addition of only 5 million to the 40 million TV homes across the country already receiving channel signals via a digital STB. That is just a 12% growth, unless TV homes in other markets of the country aided by cable/DTH operators voluntarily also start accessing TV content via a digital STB!
– Polarities in audience aggregation: When it comes to television, a continuous panel based measurement has played a huge role in understanding the audience consumption of the medium. From just a four-city metro based panel over a decade back, today?s measurement covers over 165 cities in urban India and is slated to touch almost 250 cities/towns in 2012! Market leaders in different genres with deep financial pockets are bringing high quality content to engage audiences. Thus we see polarities in audience aggregation ? a few programmes engaging a large set of audiences on one side and a large set of programmes engaging few audiences on the other end of the scale. Elderly women, housewives and kids with higher engagement time with television are showing more loyalty in terms of fewer switches between programmes or switches only within their preferred set of genres while chief-wage earners and the youth are increasingly becoming more unpredictable in their choice of content.
– Smaller channels to cluster around bigger channels: As digital platforms penetrate more TV homes, their ability to serve more content to subscribers interested in specific genres coupled with their strong marketing approach will lead to bigger audiences and higher engagement with content. The bolder content broadcasters using their network clout will aggressively start to extract viewer pay revenue to build on fragmented future advertising revenues. Channels with smaller audience shares will cluster around the larger share accumulating channels to enter segmented audience profile homes providing them small pay revenues as well as to provoke advertisers to notice them for the seasonal brand campaigns! The first signs of this is already apparent with FMCG categories such as detergents, soaps and toothpastes slowly giving way to personal cosmetic products such as skin creams, deodorants and grooming gels in the ladder of advertising in segmented profiled channels.
– Marketing of content to wield more power: There will be no dearth of space either in existing genres for newer channels to come up genres or for newer genres to come up. But businesses differentiated strongly by their content, backed with strong marketing, packag-ing and pricing will start luring away audiences from existing content across genres. Big-ticket events on GEC, sports, news and movie genres will always aggregate audiences irrespective of platforms.Thus for probably the first time in Indian broadcasting, from 2012, marketing of content will start gaining power over distribution of content which has held sway till now.
Pramod Bhandula
MD, JCDecaux India
OOH
?Street furniture, Metro to offer more OOH options?
w Street furniture to grow in importance: With the advent of the street furniture concept in India more cities may opt for service-oriented and socially responsible street furniture formats.
w Aesthetics to reign: The outdoor advertising policies of many cities may be revised to reduce visual clutter and promote user-friendly formats.
w OOH operators to adapt to city norms: The major operators in top cities will start aligning their strategies with the city administrations’ vision of providing service-oriented formats.
w OOH to be more popular: The categories which have till now not used OOH medium as their communication vehicle will start including these new formats in their media plans. Luxury can be one example.
w New policies for 40 cities: New policies/ advisories would be issued to the top 40 cities from the ministry of urban development.
w Metro to offer more advertising options: With the introduction of metro rail in more cities the advertising opportunities will see a surge.
w Consolidation among OOH agencies: Media houses/ agencies will have to start thinking of consolidation given the increased fragmentation in the industry.
Kunal Bahl
Founder and CEO, Snapdeal.com
E-COMMERCE
?Consumer focus, margins & right talent essential?
w Margins will matter going forward: There is a focus on building topline (sales) now. This trend will evolve to focus on gross margins next year, and operating profits the year after that.
w Analytics-driven marketing to take over: In 2012, the forward looking, smarter companies, will move from mass media campaigns and focus more on data driven marketing techniques that ensure every rupee of marketing spend is measured.
w Talent crunch to get more severe: As more e-commerce firms enter broad and niche categories, a lot of smart, talented professionals would move in. Companies that are able to attract the right talent at the right speed will win.
w Leaders to emerge: Next year will demonstrate the execution capabilities of firms. Those who can build tremendous growth velocity, while ensuring excellent customer experience, and demonstrate a clear path to profitability, will stay ahead of the pack. Leveraging technology in a smart, meaningful and customer centric manner will be key as well.
w First significant M&A deal could happen in India: We will not see non-travel e-commerce firms go public for about two-three years. M&A(9mergers and acquisitions) is the other exit option, with many global companies looking to get a foothold in India.
LK Gupta
Chief marketing officer, LG India
Marketing
?Leaner and sharper marketing to prevail?
w Niche concentration: Brands will move into below-the-line activation. Focus will lean towards conversion of customers at store and on-ground level.
w Heavy on toppings: With pricing under pressure, promotions by brands will look to increasing total value of purchase ? gifts, value-additions with complementary products, bundling, will increase.
w Net gains: The digital space will see increasing advertising clutter. More local and micro-local brands will find value in targeting middle-income/upper income consumers.
w Dot.com digs in: Online purchases will see exponential growth in the short term and even affluent and middle-class small-town consumers will be buying online.
w Local call: Large ad agencies will lose business in new media and below-the-line (BTL) to smaller, specialised agencies. At the same time, domain expertise in areas such as digital and mobile marketing, customer relationship management will be sought by brands.
w Innovation is the key: In product design and R&D, the emphasis will be on innovating for cost reduction and simplification. At the same time, brands will extract higher prices from top-of-the-line products with product innovations that enhance experience.
Siddharth Roy Kapur
CEO, UTV Motion Pictures
FILMS
?Shorter content to draw in audiences?
w Digitisation to make films more accessible: Films will become much more accessible to audiences in remote towns via satellite technology.
w Marketing and promotions: Skilfully executed marketing initiatives to contribute to a good opening weekend for a movie.
w New technologies to result in new revenue streams: Advent of new emerging platforms and technologies will lead to newer revenue streams.
w Short content to become more popular: New-age directors who can feel the pulse of today?s audiences will soon bring in the trend of watching short format entertaining content on non-theatrical platforms.
w Production houses will look for de-risking: Pre-sales deals which include satellite rights, music rights, home video rights and new media rights can help recover 40- 45% of the production cost of the film.
w Preference for local flavours: Increasing preference for local flavours will see regional cinema growing in the coming years.
w More co-productions with global players: Considering that some countries have reached a saturation point, while others have stringent protec-tionist policies in favour of local cinema, India is an emerging media and entertainment hot spot for international players.
RADIO
?Radio to ride digital wave?
APURVA PUROHIT
CEO, Radio City 91.1FM
w Digital and radio are made for each other: We will soon witness the big fat Indian wedding of digital and radio. Both the media operate on the hinges of interactivity. When used together they can create a ripple effect like no other. The two mediums can supplement and complement each other in a synergised manner. Whether in promoting each other or becoming distribution pipelines for the same content, similar consumer behaviour on both will bring them closer.
w Non-music content gets richer: As regulators open out content further, there will be a greater emphasis on delivery of current affairs, local city news, local sports, etc., with FM driving reportage of city specific information to a higher level of immediacy.
w RJs become the voice of the city: In smaller cities, our radio jockeys (RJs) are fast donning a celebrity-like status. RJs can play a huge role as local influencers and increasingly, brands and social organisations and even the government will learn to use their voice well and responsibly.
w Product promise wherever, whenever: Traditionally, radio consumption was skewed to at-home listening with 96% listeners tuning in from their homes and 4% while commuting. But now we are seeing almost 20-30% of listeners tuning in from their mobile phones. Going forward, we are definitely going to see a tweak in content.
w Local businesses: The impending Phase III of the FM radio policy is going to expand the radio footprint in smaller cities. And with this, local businesses will tremendously benefit by virtue of having access to a new medium. Radio is a viable option for small and medium enterprises since it is low on cost yet high on reach.
Retail
?All about eating & shopping for food?
Damodar Mall
President – integrated food strategy, Future Strategy
w Kitchens are getting complicated: Increasingly, eating together does not mean eating the same thing. The trusted family kitchen is having to churn out significantly more variety of dishes and cuisines, beyond the standard ?ghar ka khaana?. This kind of proliferation happened on the bathroom and dressing table shelves ten years back. The family soap, cold cream and talc got replaced with individual preferences and everything around personal care industry morphed completely, as a result. The entire home kitchen system will now undergo transformation, changing industries that serve the kitchen, along with it.
w Grandmom and mom have serious competition: Knowledge of winning recipes and smart tips have been powerfully handed down through the female family lineage, over the generations. This pheno-menon reflected itself in the mar-keting and advertising communi-cations of food brands. The family network of culinary knowledge is for the first time being seriously replaced by Google uncle, Wiki aunty and celebrity chefs like Sanjeev Kapoor. For homemaker women, churning out cuisine that was not taught by moms and aunts is actually becoming a ?marker? of being educated, aware and smart. This is impacting the way culinary knowledge and ingredients are sourced, transforming both industries in the process.
w Shopping being shaped by the cold chain at home : The larger refrigerators at home with bigger ?veggies? and ?frozen? sections are impacting the way we shop. You no longer need to buy veggies or milk every day since you can store three to four days? supplies nicely in your refrigerators. Low shelf life, fresh foods- vegetables, fruits, milk, curd, batters, pastes?will be the next big categories that will shift to the modern retailers.
Ashok Lalla
Leader- digital, South Asia, M indshare
DIGITAL
?A new roadmap for ideas?
Most digital marketers look at 2012 as the year when the mobile will take centre stage, and mobile web will draw brands closer to their audiences. Then there?s talk of 3G and the potential it has for marketing, and the convergence of media and how it?s influencing marketing planning. There?s also enthusiasm about the growing user base in the digital space (web and mobile). But I?d like to share a perspective on digital in 2012 that goes beyond these aspects and shows how digital being more than digital may well be the biggest digital trend of 2012.
w Ideas central: Smart marketers will realise that at the end of the day it?s not the digital media or the technology or the applications created that will define success for their brands. It?s the ideas. Ideas that lead the rest of the digital ecosystem to spread and amplify the brand?s message and create a mean-ingful connection with audiences.
w People as media: The essence of being social is not merely focusing on the sites that a brand is present on. Neither is it the marketing thrust done through the sites. But it?s about making one?s audience one?s media. It?s about a whole new approach to digital media and how its key components are seen. The faster brands get people into their media plans, the faster they will go from doing social to being social. And will find that marketing will take care of itself. Through people. As media.
w Un-advertising: A common feature of most digital marketing (and even social marketing) is that it?s usually used to run ad messages cloaked as updates, posts, videos, polls, contests, etc. 2012 will see a shift in this approach by smart marketers who will embrace a refreshing new way to use digital where the space is used to reach out and connect with consumers in their context, rather than the context of the brand. The un-advertising approach to digital will look at communication ?consumers inward? and not ?brands outward?. A subtle, yet potent change in how digital can be made to work harder for brands. Clearly, 2012 is when brand owners must look beyond digital being just digital, and start accepting and adopting a new approach to digital.