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‘It’s important for the industry to start using CPT as a currency over CPRP’
By Rohit Gupta
Television reaches 183 million homes or close to 800 million individuals. No other medium or platform in India comes even close to the kind of reach television has. With nearly 8 to 10 million households being added yearly and currently with 65% penetration, television still has room for further growth. It is for these reasons that Television will be a medium of priority for brands seeking a wider reach, essentially brands present nationally. Over the last few years, TV has portrayed an encouraging story with year on year growth of close to 15% in revenue. Television will continue to be the mainstay of any media plan in a country like India for a long time.
However, we have had our share of setbacks in the last couple of years. First, it was the demonetisation drive that caught us off-guard. It was at least three months before major genres could recover while niche channels took longer. This has resulted in the overall growth rates coming down to single digits last year. Similarly, we had a great start to the current fiscal too before GST derailed the momentum. Although recovery was seen in a few months the impact will be felt in the annual growth numbers in March. The overall growth in Ad revenue for the current fiscal would be around 10%.
Growth rates have come down from the highs of 15-16% to what is expected to be around 10% for the current fiscal, a substantial fall. Hopefully, now that the GST has been implemented and the economy is on an upswing we should again witness growth rates similar to 15%. FMCG, the largest category spending on TV, also faced the brunt of demonetisation and GST. Now, having moved past both, the sector is back with strong results. With new players being added every year the sector functions on strong fundamentals. Even categories like Telecom, Auto, Handset Manufacturers, E-commerce and Consumer Durables have been performing well.
Previously, advertisers preferred below-the-line as a medium of choice over television for reaching out to rural audiences. This was due to the absence of a television measurement metric for the rural markets. BTL activities were expensive and not to mention difficult to evaluate for effectiveness. Now, with BARC reporting rural viewership data, the scenario is not the same. Advertisers are well informed about the viewership trends in rural and can make an informed decision with regards to their media spend. This has provided wind to the sails of FTA channels over the last two years. Added to this is the growth in viewership, which can further grow with targeted programming.
Mainline channels face the issue of limited inventory. Currently, the challenge for broadcasters is with the English Niche genre. As per the new rating system introduced by BARC, the genre has shrunk sizeably. In addition, the ratings are also unstable with fluctuations every week, thus making it difficult to monetise effectively. What’s ironic is the fact that across the country English language content is received well across platforms, the English language as a medium of education has been the highest ever, English movies are doing well at the Box Office, but somehow the English Genre on Television seems to be taking a hit. It is important for Advertisers to recognise the fact that the SEC A, premium audience consumes this content and hence these genres need to be given their dues. Hopefully we should witness a comeback by advertisers on the English genre soon. But the fact is that it has been a challenge over the past two years.
Kids genre has been stable. Similarly, other genres have also been performing well. Obviously, for Hindi GEC’s it’s the tent poles properties that sets one apart from the other. Impact properties are important as they deliver on both, ratings and revenue. We saw that with ‘KBC’ and ‘Super Dancer’. Whereas, in the case of smaller channels especially the niche genre, perception plays a very important role.
As for the way business is done, I think it’s important for the industry to start using Cost per thousand (CPT) as a currency over Cost per rating programme (CPRP). Globally, media buying is done based on Cost per thousand (CPT). It is a common denominator that helps you compare across mediums such as TV, print and digital. It lets you compare CPM’s and decide which medium or channel of communication is more efficient and thus make an informed decision. This makes the whole exercise of media planning and buying streamlined and easy to understand.
Invariably, the top three channels in every genre will always command a premium, that won’t change. Deals depend on several factors including client deliveries, properties offered etc.
Advertiser Funded Properties or Branded content is being done. It is due to the high cost associated with it that it’s not a common practice instead advertisers prefer sponsorships and ad spots. However, brand solutions do help in building brands and in the process also builds stronger business relationships with clients. It also helps in obtaining a premium as well. In the future, we could see more brands wanting to break the clutter through innovative exercises.
At the core of our business, the most crucial element is client relationship management. It is all about how you manage your relationship with the client. When we deliver on a client’s expectation they always return with a larger share of their business. As a network, our focus has always been to develop long-term relationships with clients, both big and small. We work closely with brands to ensure that they get enough value from the network for them to come back to us, year after year.
As far as digital is concerned the medium is growing but it is not at the cost of TV. The audiences are not the same. Digital is growing independently by catering to a separate set of individuals, and in fact, it has eaten into the shares of other mediums like print. Since it is a new medium the growth rates will be high.
(The writer is president, network sales and international business at Sony Pictures Networks India)