Madison Group CEO Vikram Sakhuja on TRAI tariff order, Ekam & media landscape

Sakhuja articulates his vision for the media in the near future future

In a highly VUCA media world, over I’m going to attempt to answer the question of what’s in store for media in the near future. Today 11000 TV and radio advertisers, over two lakh print advertisers, 1500 OOH advertisers and 300 large - 2 lakh long tail online advertisers think long and hard about how to spend their marketing budgets.

On one hand, it costs 30-40 crore to do a significant national launch, advertising on IPL can exceed a 100cr for some advertisers. A YouTube masthead or a TOI jacket costs excess of a crore, a 10-day OOH plan in Mumbai can cost over a crore. Yet an average advertiser spends under five crore a year on TV, two crore on OOH and lakhs on other mediums. At the top, there are only 12 advertisers with spends more than 500 cr. At a brand level, an equal number (12) spend more than 100 crore.

For all of them, budget management boils down to making trade-offs between mediums and media objectives. By mediums I mean TV, print, radio, OOH, digital, cinema, and media objectives: reach, frequency, SOV, weeks on air, advertising size and “impact vs regular” inventory.

How media shapes in the future will depend on how advertisers, agencies and media owners use different mediums across these fundamental media objectives.

Reach: When it comes to reach we have close to 200 mn TV homes but only a handful of advertisers – large FMCG, political parties and telecom that reach both urban and rural. Even within urban most aggressive plans reach about 70% of TV homes once/month and about 45% three times.

Byron Sharp amongst other media pundits says that reach is most important, yet at an India level we are reaching less than half. Question to ask is whether that 60% reach overall urban better or 95% reach among a particular market.

Frequency: At a campaign level, TV typically operates at a 3-5 frequency, online at 7-8, print at 1 or 2. Yet paradoxically as consumers we often see the same ad perhaps three times in an hour while watching a movie or a game. Question to ask here is do we truly understand the concept of media frequency?

SOV: Most advertisers track SOV/SOM closely as they find that competitive spends have a bearing on their business. Best way to get a client to spend is to tell them that their competitor is spending. Fact is media salience does drive brand choice but do we need to do it over a campaign or a financial year.

ACD: TV copy length is coming under a microscope even as print sizes are increasing. Digital has expanded the ad range from 6” to long-form video. Rather than approach copy length by the medium question is one of optimizing the effectiveness and efficiency of creative length (typically using analytics).

Impact vs. regular: Impact unquestionably helps cut clutter and build awareness. Used well it builds equity. However, it comes at a premium. New advertisers hoping to make a quick mark in the Indian market opt for an impact heavy strategy, while legacy marketers approach impact more judiciously. Question to my mind is do brands have an impact strategy?

WOA: Often the variable that is traded off most. It is felt that it is better to have a campaign that is noticed over an always-on one. Indeed, we have only a few brands who are always-on on TV, display, social, search, performance; but most TV and all print, OOH, radio, cinema activity is typically sporadic and behind specific marketing initiatives. Why is WOA not given more importance?

Current thinking has carved the pie across TV - 38%, print - 32%, digital - 19% (search 6%, display/video 7% and social 6%) OOH - 5.5% and radio - 3.5%.

How will this media scenario change in the near future? If the future follows the past we will see the following:

TV will be the base medium for building awareness and consideration. More TV channels will continue to launch, rate/10” will not increase and may even fall. Fragmentation will lead to an increase in CPRP. CPRPs within a genre will be competitive. Reach will be precious. Overall it will cost more to reach less. There will be the occasional super Premium Impact program that becomes a “tribal moment”.

The power of others seeing the same thing as you, in the same room and across India at the same moment, cannot be overstated. If I see a Dominos RCB spot during IPL, and I discuss it with a friend who I can safely assume has seen it, a certain legitimacy is created that is called Cultural Imprinting.

Digital Video will grow on the back of OTT, YouTube, Jio, MX Player, ShareIt and other video consumption and sharing platforms. Digital video has two roles: on advertising, the TV vs. digital video debate will net out at one complementing/supplementing, rather than replacing the other. On content, video will have an amazing run limited only by a brand’s ability to embrace content assets.

Social will grow on the back of great psychographic targeting and delivery of outcomes and again grow proportionate to brand’s ability to create content based assets.

Search will grow but more modestly as CPC’s go up and the ROI on search reduces

Print will have a bumpy ride. It will remain a medium for a call to action and announcement of new news unless it reinvents itself. Categories will put it more under the scrutiny of effectiveness than any other medium. Comparisons will inevitably be with digital. Newspapers will struggle to balance yield with outlays.

Digital display will grow but less than video. Here the contextual, performance oriented, rich media, tech-enhanced nature will lead to banners winning the battle versus print. Voice will emerge as a display medium

Radio and cinema will grow as outlays remain modest and local marketing importance grows. OOH will gain from traffic count measurement that is now available at least in Madison and also grows. Put this way, if nothing changes, one could see similar trends in the next t years as we have seen in PMAR 2018. In 2021 we could well see digital being the second most dominant medium.

But I think an alternative more exciting scenario is possible. This, however, is predicated on the occurrence of three disruptor events and two changes in how advertisers market their brands.

· Disruptor events are TRAI channel pricing, digital data measurement, and data privacy

· Marketing changes are true integrated marketing and increased localisation

Disruptor events

TRAI channel tariff order

When TRAI channel tariff order is enforced, channel availability per home will reduce from approx. 350 Channels to 100+50. So, today most GEC channels have 90%+ distribution and about 35% weekly reach. After TRAI these channels could land up having 30% distribution and 30% reach.

Reality is that an average home watches 16 channels. It is just that with so many more available there is surfing and some snacking and reach extension. Once these extraneous channels go out we will see individual channel reach reduce, ATS go up, and overall fragmentation will reduce. More channels will also go FTA, but carriage fees will also increase. There will be moreexperimentation with consumers opting in and out of channels on a monthly basis.

Today there is a high degree of substitution possible between channels. In a post TRAI world, we will need a combination of channels to build reach and no two channels will be completely substitutable. Life will also be more dynamic. Using past four week data to predict the next four weeks will become challenging. It is a good time for a media planner to make a difference.

Digital measurement

The most accountable medium does not have a measurement currency. We don’t have a currency on digital AdEx, no currency that tells us about viewability and viewership/listenership. Sure, we are fed data by publishers, and we also have our own tags that we track, but there is no industry currency. Ekam was supposed to be one and huge amounts were spent to keep the infrastructure going, but for completely manmade reasons this has not emerged. If it comes we will get a currency on digital viewership and an official read on integrated reach between at least TV and digital video.

This can redefine the 27000 cr video+ (23500+3500) industry.

I believe TV and OTT have the common lean back consumer habit to viewing which will lead to a lot of crossover advertising between the two platforms. I also think the OTT content ecosystem will allow advertisers the deal structuring that we used to do with private producers in the DD era.

This will also allow a narrowcast of a broadcast medium. We can choose markets and genders or ages and cut some wastage.

Data Privacy

As a consumer who owns my data will have a profound bearing on how the digital marketing evolves.This is not a current issue in India but is a simmering one in more developed digital economies.

The detractors say that global digital media giants have the power and ability to manipulate our behaviour as well as profile us if they control our data. The supporters say having consumer data has led to contextual marketing, psychographic marketing and programmatic marketing that has made messaging to consumers more relevant. Indeed, these are powerful tools for any marketer that goes a long way in improving targeting and explaining how media works.

As a marketer it would be a shame to lose this tool. But with great power comes great responsibility. It is obvious that data needs to be anonymised. That is a given. The crux of the issue lies in internalising the difference between targeting and profiling. It is ok to target me, but please don’t profile me. The difference is subtle but significant. If we cross the line, there is a danger of the entire digital media juggernaut crashing.

Two marketing practices will impact the way we spend

Act truly integrated

We have talked integrated marketing plans for decades but we still act in silos. Sometimes an idea binds the media together, but is this integrated?

There is a term called consumer journey or path to purchase that tracks a consumer from the time the trigger for the category happens to when purchase and post purchase happens. In this journey the potential media touchpoints are when the consumer is engaged in the activity of listening, viewing, reading, searching, shopping, socialising, learning or gaming. What brands can do with media at these touch points is the opportunity to get consumers to see us, think about us, experience us, buy us and share their views about us.

Today over 90% of a brand’s marketing budget is involved in getting ads to be seen. As they move to other aspects of the marketing funnel, how the money is spent will change dramatically.

Biggest catalyst to that will be CPT (or CPM). Today we evaluate a TV plan in CPRP, print in rate/sqcm, radio in rate/10”, OOH in rate/site, digital in CPT or CPO, etc. This needs to move to an apple to apple CPT. Over this we can add outcomes and measure CPO.

Increased localisation

We need to factor India’s heterogeneity much more into our marketing plans than we do currently. We approach plans as urban vs rural, 8 metro vs rest of India urban, HSM, 4 southern states, Maharashtra and West Bengal, and on socio economic basis through an increasingly NCCS AB skewed classification. Way forward is for brands to fine tune their battlegrounds. From spray and pray to seek and prey. We have several examples over the years like Ghadi, Santoor, Thums Up, etc that have built dominant regional positions.

So, what’s in store for media in the near future is essentially harder working outcome based marketing. Brand budget growth follows an arithmetic progression while demands from marketing forces increase at a geometric progression. The following six forces will shape the advertising spend market.

1. Expansion of marketing funnel: We used to make trade-offs between Mediums and Media Objectives (R/F/SOV/WOA/ACD/Impact). This was largely about getting consumers to see an Ad. Now we will additionally make trade-offs between getting them to see, explore, experience, buy and share across the journey. If that happens TV will lose relatively and all others will gain.

2.Integrated Reach will continue to be critical: More media touchpoints will be required to get reach. Marketers will seek it in an integrated manner. Campaigns will maximize reach and optimize frequency across media. CPT will become the common currency that equates the cost of an impression across media.

3. Greater Localisation: it will become increasingly impractical and inefficient to market to one India. Additionally, the trade-offs between markets will become sharper than our current P1, P2 classification. Greater digitisation and channel selection will lead to more localisation. TV will be used as a local medium more than it ever has. Digital, OOH, radio, the cinema will work in combination better than they work in a silo. Print will need to redefine its value to a local marketer and will find a huge role.

4. Integrated Reach:, CPT, and greater localisation will lead to more intelligent media selling. All Mediums will have a role. From selling Media like onions and potatoes, there will be a need to find brand building solutions. In the near though not immediate future, media in India will get truly integrated as smart devices get connected in what we know as IOT.

5.Data and technology will revolutionise targeting: We will increasingly target geographically, psychographically, contextually and behaviourally. We will increasingly retarget sequentially with customised messaging. Any medium with digital backbone leverage this capability.

6.We will decode how media works: Increasingly through a combination of marketing analytics and real-time attribution, we will understand what sequence of Media drives consumer behaviour for each category

(The author is Madison Group CEO Vikram Sakhuja. The views expressed here are his own and may not subscribe to them)

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