Description
Describes about overview of media industry.
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Table of Contents
Media Industry Overview ...................................................................................................................... 2 Sales in Media......................................................................................................................................... 3 Television ................................................................................................................................................ 6 Print Media ............................................................................................................................................. 9 Radio ..................................................................................................................................................... 12 Out Of Home......................................................................................................................................... 15 Internet ................................................................................................................................................. 17 Conclusion ............................................................................................................................................ 18 References ............................................................................................................................................ 19
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Media-industry overview
Indian Entertainment and Media Industry Overview
The Indian entertainment and media (E&M) industry has out-performed the Indian economy and is one of the fastest growing sectors in India. The Indian economy has been growing at a fast clip over the last few years, and the income levels too have been experiencing a high growth rate. Above that, consumer spending is also on the rise, due to a sustained increase in disposable incomes, brought about by reduction in personal income tax over the last decade. All these factors have given an impetus to the E&M industry and are likely to contribute to the growth of this industry in the future. Besides these economic and personal income-linked factors, there are a host of other factors that are contributing to this high growth rate. They are: ? ? ? Low media penetration in lower socio-economic classes (SEC) Low advertisement spends Liberalizing foreign investment regime
Key developments:
Entry of new players The year 2005 saw the entry of new players across all segments of the E&M industry. Some examples of the same are: the entry of the Reliance Group in the filmed entertainment and radio segment that bought a majority stake in Ad labs, the entry of the Tata group, through its subsidiary Videsh Sanchar Nigam Limited (VSNL) and Thomson Group also recently announced its partnership with Tata Sky Limited for manufacturing set-top-boxes and providing sales service and support network for their DTH customers. Foreign investment The sector recently witnessed increasing foreign investment inflows especially in the print media. In the broadcasting space, most channels beaming into India (such as Walt Disney, ESPN-Star Sports, Star, Discovery, BBC etc.) have established foreign investment subsidiary companies for content development and advertising airtime sales. Current status of the industry and its growth potential The size of E&M in India is currently estimated at INR 353 billion and is expected to grow at a compounded annual growth rate of 19 percent over the next five years. The television industry continues to dominate the E&M industry by garnering a share of over 42 percent, which is expected to increase by a further 9 percent to reach about 51 percent.
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Future outlook With rapid advancements in technology, we believe that convergence will play a very crucial role in the development of the Indian entertainment and media industry where consumers will increasingly be calling the shots in a converged media world. Broadband access and Internet Protocol (IP) will be the technology enablers that will evolve this new breed of consumers. In the converged world of tomorrow, content and access will no longer be in short supply. Opportunities for consumers to access and manipulate content and services will not only be abundant, but overflowing. However, consumer time and attention will be limited. Thus, established approaches of pushing exclusive content through non-linear-channels or networks to mass or segmented audiences will no longer guarantee competitive advantage.
Sales in Media
There are around 1 lakh advertisers in India which includes Print and Electronic media. Media sales managers must not only think fast in the media business, they must also think in creative and innovative ways. The aim of media sales department is to maximize revenues. The long term goal of a media sales team is to get their fair share of advertising revenue. It is important to note that long term goal is to get a fair share and not an unfair share. A fair slightly more than the fair share goes unnoticed but if the organization gets greedy to get a major chunk of the advertising revenue the competitors can gang up against the offender. The four main objectives of a media sales department is to 1) To get results for customers 2) To develop new business 3) Retain and increase current business 4) Increasing customer loyalty There are strategies that guide the sales force about what approach they must adopt while managing sales. They should decide on certain factors such as whether to concentrate on agencies or direct business or similar factors like whether to sell for share or sell for rate approach.
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Apart from the options mentioned above, while making a selling the sales person has to execute certain strategies like:1) 2) 3) 4) Selling solutions to advertising problems. Support in creating value for the product. Becoming the preferred supplier. Innovating etc.
Different strategies are adopted by different media sales department. Media with a flexible supply such as newspapers, magazines, internet websites etc can add up supply (in the form of pages) when demand rises therefore sales department in such mediums encourage advertisers to buy more. Compared to this, media such as television, cable, radio etc cannot add supply as and when demand increases. Some points about the various mediums: Newspapers: - Newspapers have to innovate in the form of new sections in the form of editorial content, new sections etc. Local newspapers have major competition from local cable television, local radio etc. Newspapers structure their rate card to encourage more advertisers to buy more space more often. This is because they can readily add up pages. Price negotiations happen over the favourable positions and the longest running advertising. A method of selling low rated spots in mediums such as TV are bundling them together with high rated spots by discounting the high rated spots where you cannot buy one without the other. But this strategy is not applicable to newspapers where every single unit is sold according to the rate card and on its own merit. Television: - Demand pricing is found in case of television where the supply cannot be stretched to meet higher demand for highly desirable spots. TV networks sell majorly on the basis of price and not added value as they are selling a non-differentiated commodity. (If every station adopted a strategy of selling for rate and tried to do what was the best for all stations and for the market, they would all come out ahead, as in the Prisoners’ Dilemma. On the other hand, the temptation is invariably too great for one station to do what is perceived in the short term to be in its best interests and will sell for share on each pending piece of business. But no station operates in a vacuum) Internet - Today, eBay is the largest used car dealership in the world. Fifty percent of all used cars sold in America are sold on eBay. Over 60 percent of all the people who buy a new car conduct research on the Internet before going to a dealer’s showroom. They come armed with the latest information—let the commission-hungry car salesperson beware. The Internet has transformed the automotive business. It has transformed the book-selling business. It is transforming the airline ticket-selling business and the travel business.
Structure of Sales Team:The structure of a sales team will be dependent on the mission, goals, strategy being adopted by the firm. A local television channel may have a national sales team, an agency sales team and a retail sales team. Another type of structure for a sales team may be that of organizing sales department according to categories such as fashion, cosmetics, automotive, retail etc.
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The advantage of organizing sales people by categories/verticals is that salespeople in each category become experts in that category. There is also a drawback of this system. If radio or television sales persons deal with an agency that has accounts in several categories, then several sales people will call on the agency. Generally agencies prefer one person calling on them from one media organization. Compensation also has a role to play in the determination of the sales structure because compensation will be linked to the sales that a salesperson is bringing and there will be some areas which provide a media organization with a major part of their business. There is also a product oriented sales structure whereby some television network companies may have a prime time sales team, a daytime sales team or a sports sales team. Some important questions that the sales team should ask are: 1. What is the level of flexibility in our sales structure? 2. Can we simplify our sales structure? 3. Are our best people closest to the customer? 4. Are our customers very comfortable in doing business with us and how responsive are we towards the difficulties and problems of our customers? 5. Does our current structure support our sales and sales management strategies and current market conditions? Qualities and skills needed to succeed in Radio media sales: People who work in radio media sales sell advertising time. Depending on the role, sales are made either by telephone or face to face. ? ? ? ? ? Communication skills (verbal and written) Good at developing and maintaining relationships Presentable Self-motivation and ambition Ability of the sales person to promise creative solutions to clients
Responsibilities of Sales Executive: ? ? ? The Sales Executive will offer advertisers media placement services Should do cold calls to expand client base Follow up on leads and referrals generated at corporate headquarters
Recruitment: ? ? ? ? Ads in newspapers, magazines Approaching consultants Employee references Campus placements
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Television
TV advertising mainly concentrates on the 18-49 age bracket. The primary sales management strategies are based on Demand Pricing, concentrating on both national and regional sales, concentrating on agencies etc. There are two means of revenue generation: 1) Subscription Fees and 2) Advertisement Advertisement generates around 70% of the revenue and the remaining 30% is generated from subscription fee. In the case of advertising on television there are three parties that are involved. They are:1) Creative boutiques/agencies 2) Media planners and 3) Media buyers Creative boutiques create commercials based on the media briefs that they receive. Media brief will be sum total of all the aspects such as the source of business, marketing objectives, target audience, budgets etc. Some of the top creative agencies in India are McCain, Group M and JWT. Media planners have functions such as deciding as to who is the target group, which television channel to put the advertisement on etc. Some of the top planners and buyers in India are Group M, Medicine etc. Media Buyers decide on the rates, spots, viewership and they also negotiate with the channels. Planners have their own softwares for optimizing that is this software helps the planners to identify what alternatives are available, evaluation of various options and making the right decision. Examples of such softwares are EXPERT (by Kantar Media Research, U.K’s second largest media group), Media Express, ADEX Data etc. Medicine group has its own software and does not use EXPERT. The above mentioned parties have to take into account the following parameters before making a decision:1) CPRP i:e Cost per Rating Point 2) TRP i:e Television Rating Point and 3) GRP i:e Gross Rating Point = ? TRP 4) Reach and the frequency of viewing (frequency varies from 3+ to 5+). The salesperson’s job includes maintaining a balance between reach and frequency of viewing. Sales people have to deal with advertisers, planners and buyers.
Functions of Sales Managers: 1) Research: - The first and foremost task of a sales manager is to conduct a background research and be fully acquainted with all the relevant data. 2) Put up the image of the company: - The sales manager is the representative of the company so the image of the company depends totally on the actions and behavior of the sales personnel. 3) Fix up meetings: - The next task at the hand of the sales manager is to fix up meetings with the potential clients and make a presentation.
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4) Create deals: - In the meetings the sales manager’s job is to create deals for the clients. There are two types of quotes that the sales manager can put forward: ? Normal quote ? Special Quotes(difference between prime time and afternoon slots) 5) Negotiations: - Because of the high level of competition there are a lot of instances where the negotiation skills of the sales manager can come in handy. He should make all possible efforts to get the best deals for the company. 6) Tactics for bill generation (Card rate and effective rate):- this is very essential function of the sales manager. He should be ensure that the payments should be made as soon as possible.
Sales Organization Structure:
The hierarchy in the sales organization structure is in the following way: ? National Head ? Regional Head ? Vice President ? Additional Vice President ? Senior Sales Manager ? Sales Manager ? Senior Sales Executive ? Sales Executive ? Management Trainee Sales people should be presentable and be aware of the sales techniques. They have to do a lot of research which includes aspects such as tracking advertisers on competitors’ channels.
Recruitment: - Is done through
1) 2) 3) 4) Campus drives in MBA colleges Directly recruiting people with prior experience On the basis of recommendations Poaching from competitors (of people with contacts)
Selection Criteria:1) 2) 3) 4) Common Sense Presentable Knowledge about industry Proficient in sales techniques
Training:-The sales managers are given training which covers the following aspects:1) 2) 3) 4) Sales Objectives Preparation of deals Approach Presentation
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5) Industry Overview 6) Latest technologies used in the sales process. 7) TAM(TV Audience Measurement) software training
Evaluations: - Evaluation is done on the basis of target achievement (mostly year account
sometimes monthly evaluation is also done).
Quotas/Targets: - Quotas are set on the basis of past data, industry performance and
future plans. In assigning the quotas or targets to the various sales people client’s budget is taken into account.
Key Account Management: - In TV industry every channel has certain key accounts
which are their most valuable customers in order to maximize revenue from this particular segment key account management practices are in place. There is a key account head that directly interacts with the client.
Distribution Channels: - There can be two types of distribution channels. The first kind
of channel is that of the sales people dealing with either the media planners (agencies) or directly approaching the companies for selling spots. The second type of distribution is that where the media organization deals with the satellite distributors who are responsible for telecasting of the TV channels. The kind of distribution channels to be adopted depends on the strategies of the media organization.
Value Added Services: - This is provided in terms of special offers like additional spots
being provided while booking certain number of spots. Companies holding large accounts are sometimes also made sponsors for certain shows.
Customer Relationship Management: - Customer Relationship Management is used
for maintenance of list of agencies and to keep track of customers. It also helps in data warehousing and management.
Sales Support Activities: - In order to further the relations with the clients various sales
support activities are undertaken in the form of organizing functions, award shows, dinners, movie premiers etc. At an individual level the sales manager can take the client out for dinner or drinks.
Computer Based System: - Apart from the various optimizing softwares a wide use of
Microsoft Office for data base management is done.
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Print Media
The modern advertising techniques make use of many ways to convey messages to the consumers. Print media however, is one of the oldest forms of advertising methods and has the advantage of reaching a wider target audience. Types of Print Media: ? ? ? ? ? Newspapers: Newspapers are the most popular forms of print media. The advertiser in this case can choose from a daily newspaper to a weekly tabloid. Magazines: Magazines also offer advertisers an opportunity to incorporate various new techniques and ideas. Magazines are one such form of print media that give a more specific target group to the client. Newsletters: Newsletters also form an important part of print media. These target a specific group of audience and give information on the product. Brochures: Brochures give detailed information about the product. These are mainly distributed at events or even at the main outlet when a consumer needs to read in detail about the product. Posters: Posters are forms of outdoor advertising. The message in a poster has to be brief and eye catching as it targets a person on the move.
Apart from these media, direct mail marketing, flyers, handbills/leaflets, banner advertising, billboard advertising, press releases etc are all the various types of print media. Indian Print Media Industry Overview Current Scenario The structure of the Indian print media industry is highly fragmented with importance to regional dominance. The Indian print media segment primarily comprises newspaper and magazine publishing. Book Publishing also forms part of the print media though currently the share is not substantial. The print industry is expected to grow from Rs 128 bn in 2006 to Rs 232 bn by 2011, at 12.6% CAGR. While the newspaper industry is estimated at Rs 112 bn, the magazine segment is valued at Rs 16 bn.
The Indian Newspaper industry is one of the largest in the world. It publishes the largest number of paid-for titles in the world. In 1997, the total number of newspapers and periodicals published was 41705, which include 4720 dailies and 14743 weeklies. The highest number of newspapers was published in Hindi, 16864
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Newspapers in India are measured on two parameters, circulation and readership. ? ? Circulation is certified by the Audit Bureau of Circulations which is an industry body. It audits the paid-for circulation of the member newspaper companies. Readership is estimated by two different surveys, The Indian Readership Survey (IRS) and the National Readership Survey (NRS).
Print Media Sales A job in print media sales essentially involves the selling of advertising space to media agencies or companies direct. Graduates are often targeted for entry level jobs in media sales and they are rewarded with competitive basic salaries, good commission/bonus schemes, the potential to travel and most publishing companies offer excellent training courses. An advertiser will choose which section of the newspaper to appear in (classified, recruitment, inserts or display) depending on their individual requirements. Often a local newspaper will have a weekly supplement or magazine which also offers advertising opportunities. Print Media space is either sold by: ? ? Linage: These advertisements are worked out by charging a set amount per line. Often used by very small companies or in the recruitment section, linage ads are very cost effective. Single Column Centimeters (SCC): this is a rate worked out by how many vertical centimetres an advert measures by how many column inches across. For example if the SCC rate was Rs 300, for an advertisement which is 4cm down by three columns across the cost would be Rs 300 x 4cm x 3 columns which are Rs 3600. Display or semi display: These are usually the advertisements found within the front half of a newspaper or regional supplement. Often companies add their logo, graphics or photographs to make the advertisement more eye catching. Companies will be quoted rates on the size of advert e.g. ¼ page, ½ page and whether or not they want colour in the ad. Extra charges are often added for more prominent positioning too e.g. back page, top right hand page, early in the news section.
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Functions of the sales manager: ? ? Make a list of the clients based on the verticals, for instance, the different verticals can be: automobiles, education, banking and financial services. Service the existing clients who advertise in the paper or are related. This can be done by: ? Giving them information about new schemes ? Planning any campaign ? Publicizing any ongoing sale ? If they need any print media support, help them with it. ? Introducing various schemes such as providing additional advertisements or discounts. Getting business from new accounts by going to the market, meeting with the companies, giving them information about rates offered and advertisement placements. Handle other issues related to billing etc. as in a way they are the face of the company.
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Earlier the print industry did not require much of sales personnel. But recent times have witnessed a decline in the print industry because of availability of a plethora of other options. So now the sales department has become more pronounced in the organisation as more of sales people are required to do the job.
Organisation structure:
VP (Sales)
Group Head/ Group Manager
Team Leader (Automobiles)
Team Leader (Education)
Team Leader (Banking & Financial Services)
Account ManagerMaruti
Account ManagerHonda
Account ManagerFord
Senior Executive
Senior Executive
Recruitment & selection practices: In print media industry, selection is done preferably of people from media background with a prior work experience of 1-2 years. Recruitment is mostly done from: ? ? Training: Generally, training is not provided in this sector as attrition rate is very high. The general trend is that people leave in a year or so. So generally the supervisor assists for a time span of 7 days & after that the sales executive is on his own. Compensation: It is on the basis of fixed pay plus sales incentives over and above the fixed pay. The compensation is decided on the basis of Key Resource Attributes (KRAs) which gives weightage to the following attributes: 1. Revenue: The revenue that a sales person generates is taken into account while evaluating him for compensation. 2. Market Share: The market share that a sales executive captures for the company in comparison to the competitors also plays a crucial part in deciding his compensation.
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B-Schools Advertising School
3. Yield: Last but not the least is how much money he is able to generate per square centimetre. Yield here basically refers to the amount after discount. Therefore, it signifies the rate that the salesperson commands in the market. Customer relationship management: There is a presence of a BPO cell in some companies but on a very small scale. Their role is also limited to handling complaints and giving information about schemes. Computer based systems: Companies like HT Media have an SAP system in place. It is used for client and billing data. But most of the things are done on paper or on mail or print outs. Sales support activities: As such there is no sales support activity. But most of the time the sales personnel are provided with a laptop and a sales kit, which comprises of the rate cards and important papers.
Radio:
Radio ad spends account for about 4 percent of the total advertising spends in India today, having grown from just 2 percent in 2004. The growth has been propelled by the emergence of the private FM industry in India. In terms of sheer reach, the Indian radio industry has been dominated by the state owned All India Radio (AIR), which covers 91 percent of India's area and reaches 99 percent of the population. However, the turning point for the industry came with the Phase 2 privatization reforms when the government rationalized the licensing fee by fixing it at 4 percent of the gross revenues. This, for the first time, made the business model viable for companies, and consequently many large corporate houses entered the private FM business. From 21 operationalized private FM stations before the phase 2 licensing, the number of stations shot up to over 205 by the March 2008. The industry now boasts of players such as Radio Mirchi and Big FM with a pan-India presence. Consequently, the radio industry is estimated to have grown at an impressive CAGR of 19.7 percent over 2006-08.
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It is estimated to have reached a size of INR 8.4 billion by end of 2008, a growth rate of 13.5 percent over the previous year. Growth in the future is likely to come through continued increase in the number of radio stations after phase 3 licensing, further liberalization of regulations as well as better ability of the radio stations to sell space. As regional businesses in India start to spend more aggressively on advertising to build brand consciousness, they are likely to turn to media like radio and print which are highly cost effective for regional ad campaigns. On the whole, the radio industry is expected to grow at a CAGR of 14.2 percent over 2009-13 (compared to 19.7 percent over 2006-08) and reach a size of INR 16.3 billion by 2013
.Sales: Sales in the radio industry are mainly the Advertisement Space selling. The time slots are sold to the advertisers and the revenue is earned through it. Since radio earns nothing from subscription as it is free to air, it has only one source of revenue i.e. selling of advertisement time. The marketing and programming teams sell the station to the audience and the media ad sales team sells the station to corporate and retailers (advertisers). The radio sales strategy is very different from any other because radio stations need to keep following up with clients and agencies for campaigns. Very few radio deals are made annually they are mostly on per campaign basis. So if you are a sales person handling DHL, just because they were on your station one month doesn’t mean you will ebb on their next campaign. Fresh pitches are needed. The organization of the Sales structure is given below:
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Sales Head
Manager
Manager
Executive
Executive
Executive
Sales teams normally have a national sales head, managers and executives. Managers handle teams with executives, and handle separate lists of agencies and all the clients they handle. Example: One team is in charge of servicing Mindshare in Mumbai (they handle ICICI, Tata Motors, HPCL) and another for MAXUS (they handle Vodafone, TATA sky, NDTV imagine etc.) Also many stations have a separate team for corporate sales and separate team for retail sales. Pricing Structure: Radio sales are done usually on a per 10 second rate basis. Rates differ from 1) 2) 3) 4) City to city, From station to station, From time band to time band It can differ from deal to deal.
It can be negotiated. It can be Rs. 300/10 sec (BIG FM when they launched) to Rs. 1800/10 sec (Radio Mirchi at their prime). Value added services given by sales people are sponsorship tags, RJ mentions (not recommended. You want to keep your RJ brand and endorsement free), association with certain shows, barter deals to back the rates, extra seconds if extreme case.
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Out of Home :
OOH Media broadly describes a variety of advertising vehicles, which reach consumers where they shop and travel. These include: ? ? ? ? Billboards / Hoardings Street Furniture: Bus queue shelters, phone kiosks and newsstands. Transit/Airport/Malls: Buses (sides and fully-wrapped), trains, station platforms, commuter rail cards, underground, airports, malls, trucks, taxi tops. Spectaculars and Walls: Large displays draped or hung on sides of buildings, murals, animatronics displays.
OOH displays are intended to get people's attention while they drive or walk. OOH advertising is an effective way to remind the audience of the product being advertised. This works as an impact medium for national advertisers as it reinforces the impact of a particular brand. Industry Overview: Today, the Out-of-Home (OOH) market is estimated to be at Rs. 6.0 - 7.0 billion and it accounts for approximately 6.0% of the total ad spends in India. As shown below, the OOH ad spends in India compare favourably to the worldwide ad spend on OOH. The OOH industry in India is largely unorganized with very few organized players such as Times OOH, Clear Channel, Selvel, Vantage, Pioneer, Portland and Laqshya. The OOH market is highly fragmented, with no significant dominant players. The fragmented nature of ownership makes OOH a difficult medium for advertisers to deal with.
(Source: Advertising Expenditure Forecasts, October 2004 by Zenith Optimedia.)
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A successful OOH vehicle requires a minimum critical mass of targeted audience. As a result, this medium finds widespread acceptance for large advertisers in metro cities and a few large towns. With increased incidence of advertising spends by local advertisers, the attractiveness of OOH as a medium, in smaller towns could increase. Sales Organization: As this sector is largely unorganised and consists of a number of small, local operators often there is not much to say in terms of sales management. The owner puts up his contact number on the site and is contacted by the prospective advertiser. For organised players like Times OOH and Laqshya we see that they have a basic sales team headed by a Sales Manager. There is no clear basis of classification of territories/ industries that are handles by a particular team. The sales people contact prospects and pitch for their outdoor sites communicating the benefits to the customer. These benefits can be in terms of: ? ? ? ? ? ? ? ? Demographic Coverage: Sites can be classified on the basis of targeted audience as in wide coverage and focussed target audience coverage. Captive audience: As in how much time people spend near the site as this enhances the probability that the advertisement would be watched and would impact the person. Eye level visibility Cost efficiency Quality of display boards Ambience around the site: This factor is important in case of Delhi Metro as advertisers pay higher to have their products advertised on high quality display boards in ultra-modern ambience. Unavoidability Various OOH formats to suit all brands, creatives and budgets.
The salesperson has to sell the outdoor site to the advertisers. The sales process remains the same as in other industries. Basic sales training is provided to the salespeople and their evaluation is done on basis of achievement of set targets. However, targets are difficult to set in this industry, especially for new sites. For them, sites are valued based on the benefits (like coverage, visibility etc.) they provide to the customer. In addition to a dedicated sales force, often companies print their contact numbers on their sites so that prospects could contact them on their own. Companies like Times OOH have brought innovative mediums of advertising such as video LED walls- a medium which has brought in the oomph factor to outdoor media and provides a smart platform for marketers to showcase their products/services. This medium brings dynamism to the otherwise static traditional outdoor media by bringing in Motion and Sound. Also, these OOH companies follow several customer relation management practices. For example, often for major accounts, when a customer books a large site for its advertisement, the company provides him with some small sites free of cost. This may mean that for a big customer who buys large bill boards all over the city, the company may provide him a few bus shelters and other signages free of cost.
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Internet:
Internet advertising is very similar to TV and radio advertising. The programs are offered as a free service; commercial advertising pays the expenses. The same is true of Internet advertising. The information is free, with the costs defrayed by advertising. A major advantage of Internet advertising is the ability to attract a specific target audience. This advantage is limited or nonexistent in other forms of media advertising. With the Internet, ads are directed towards the right group of people. Internet ads are known as banners. Virtually all banners are links to other sites, but there are still those few that are just meant to be seen, like billboards. One advantage of Internet advertising is that it opens new possibilities to spread messages to a targeted audience. By advertising to a particular group, chances of success are indeed great. The internet advertising industry has seen a CAGR of 45% during 2006-08 and is expected to have CAGR of 27.9% during 2009-2013. The various media types are Company Websites, Social Networking Sites such as Facebook, Orkut, MySpace, blogs, Twitter etc. Indian internet users view blogs and forums as good sources of information and an excellent platform for publishing their own views to the world. 78% of consumers trust - either completely or somewhat - the recommendation of other consumers on the internet. 55% of consumers want an ongoing dialogue with brands. All companies are trying their best to establish their brands online through free mediums such as Facebook and Twitter or are going towards internet advertising. Internet advertising is one of the most talked about things in the media industry right now. With more and more people spending their time on the internet, Ads have to be placed on the internet in front of the Target Group. A company which launches an online campaign has: 1) A dedicated website 2) Facebook and Twitter integration(social networking integration) 3) Ads on other sites through Google ads or similar ad networks Sales in the Internet as Media The sales for advertisement space in internet are done in two broad ways 1) The media buyers for advertisers approach companies having popular sites with high traffic and offer to give ads on it or vice versa.(one to one) 2) Through existing ad networks like Google Adsense (Adwords) or Adbrite where these act as middle men. Both methods have their own pros and cons depending upon the requirement and size of the advertising campaign. Networks like Google Adsense make it very easy to serve ads. A company can contact Google through their website and chose a role as advertisers. Google checks and approves the site (or brand), then you can design your ads and buy certain keyword which would be used to serve ads. On the other end are all the publishers on the internet such as bloggers and site owners who sign up with Google and after getting their sites approved can serve the ads of the companies which partnered with Google as advertisers. Money is transferred from advertisers to publishers through Google. There are a number of advertising pricing structures which are commonly known as Cost per Action (CPA):
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1) Cost per click (CPC) –Whenever a user clicks on an ad, money is charged from the advertiser and is transferred to the site owner. Google acts as middleman and keeps a commission from the transaction. 2) Cost per thousand Impressions (CPI/CPM) - An online advertisement impression is a single appearance of an advertisement on a web page. Each time an advertisement loads onto a user's screen, the ad server counts that loading as one impression. 3) Cost per Lead (CPL): In this structure, advertisers pay for an interested lead, i.e. the contact information of a person interested in the advertiser’s product or service. Google is the biggest marketer on the internet and owns adwords and adsense. In an apparent attempt to streamline and bolster its relations with agencies who control spending from big brands, Google gas decided to create a new position of Vice President (agency and Industry Relations). Previously sales executives at Google were organized by regions but this created quite a complex matrix of representatives and Google found problems with that and as such has decided to abolish regional distinctions and organize its sales team exclusively by industry i.e. retail & technology, consumer packaged goods, business to business, financial services, media, travel and financial services.
Conclusion:
Sales in the media industry are unique in a number of ways: ? ? ? It is highly dependent on other industries like financial institutions, FMCG Companies etc. because they are its direct customers (for advertisements). It is a very innovative industry and as such makes use of many innovative practices to boost its sales. The sales process is highly negotiation based as there is no clear parameter as to how one’s product/service is better than the others. This is very evident in case of selling ad space for Television serials - when two shows have similar TRPs (Television Rating Points), there is no clear parameter as to why advertisement space during one of the serials should be sold at a higher price than the other. It depends upon the negotiation skills of the sales team along with a number of other not so important parameters. Also there is high competition in this industry and an imminent concern is the fragmentation of viewership. As a result differentiation of content is going to be increasingly important as the number of channels keeps increasing. There is also an issue of rising production costs for television content producers due to rising costs of acting and technical talent.
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References ? http://www.equitymaster.com/detail.asp?date=9/14/2007 &story=5 ? http://en.wikipedia.org/wiki/Print_media_in_India ? http://www.salesgravy.com/JobBoard/job/6489387 ? http://www.buzzle.com/articles/types-of-printmedia.html ? FICCI and Price Waterhouse Coopers Report on Indian Entertainment and Media Industry ? FICCI-KPMG-Media Entertainment Industry Report ? Media Selling- By Charles Warner Other sources of information: ? ? ? ? ? Mr. Indrajeet Sen, President, Laqshya Media Mr. Alok Kumar, Research Analyst, TAM Mrs. Vidya Kadian, Sales Team Leader, HT Media Mr. Nikhil Awasthy, Student NMIMS Miss Kritika Mathur, MBA Media Advertising
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doc_550378237.docx
Describes about overview of media industry.
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Table of Contents
Media Industry Overview ...................................................................................................................... 2 Sales in Media......................................................................................................................................... 3 Television ................................................................................................................................................ 6 Print Media ............................................................................................................................................. 9 Radio ..................................................................................................................................................... 12 Out Of Home......................................................................................................................................... 15 Internet ................................................................................................................................................. 17 Conclusion ............................................................................................................................................ 18 References ............................................................................................................................................ 19
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Media-industry overview
Indian Entertainment and Media Industry Overview
The Indian entertainment and media (E&M) industry has out-performed the Indian economy and is one of the fastest growing sectors in India. The Indian economy has been growing at a fast clip over the last few years, and the income levels too have been experiencing a high growth rate. Above that, consumer spending is also on the rise, due to a sustained increase in disposable incomes, brought about by reduction in personal income tax over the last decade. All these factors have given an impetus to the E&M industry and are likely to contribute to the growth of this industry in the future. Besides these economic and personal income-linked factors, there are a host of other factors that are contributing to this high growth rate. They are: ? ? ? Low media penetration in lower socio-economic classes (SEC) Low advertisement spends Liberalizing foreign investment regime
Key developments:
Entry of new players The year 2005 saw the entry of new players across all segments of the E&M industry. Some examples of the same are: the entry of the Reliance Group in the filmed entertainment and radio segment that bought a majority stake in Ad labs, the entry of the Tata group, through its subsidiary Videsh Sanchar Nigam Limited (VSNL) and Thomson Group also recently announced its partnership with Tata Sky Limited for manufacturing set-top-boxes and providing sales service and support network for their DTH customers. Foreign investment The sector recently witnessed increasing foreign investment inflows especially in the print media. In the broadcasting space, most channels beaming into India (such as Walt Disney, ESPN-Star Sports, Star, Discovery, BBC etc.) have established foreign investment subsidiary companies for content development and advertising airtime sales. Current status of the industry and its growth potential The size of E&M in India is currently estimated at INR 353 billion and is expected to grow at a compounded annual growth rate of 19 percent over the next five years. The television industry continues to dominate the E&M industry by garnering a share of over 42 percent, which is expected to increase by a further 9 percent to reach about 51 percent.
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Future outlook With rapid advancements in technology, we believe that convergence will play a very crucial role in the development of the Indian entertainment and media industry where consumers will increasingly be calling the shots in a converged media world. Broadband access and Internet Protocol (IP) will be the technology enablers that will evolve this new breed of consumers. In the converged world of tomorrow, content and access will no longer be in short supply. Opportunities for consumers to access and manipulate content and services will not only be abundant, but overflowing. However, consumer time and attention will be limited. Thus, established approaches of pushing exclusive content through non-linear-channels or networks to mass or segmented audiences will no longer guarantee competitive advantage.
Sales in Media
There are around 1 lakh advertisers in India which includes Print and Electronic media. Media sales managers must not only think fast in the media business, they must also think in creative and innovative ways. The aim of media sales department is to maximize revenues. The long term goal of a media sales team is to get their fair share of advertising revenue. It is important to note that long term goal is to get a fair share and not an unfair share. A fair slightly more than the fair share goes unnoticed but if the organization gets greedy to get a major chunk of the advertising revenue the competitors can gang up against the offender. The four main objectives of a media sales department is to 1) To get results for customers 2) To develop new business 3) Retain and increase current business 4) Increasing customer loyalty There are strategies that guide the sales force about what approach they must adopt while managing sales. They should decide on certain factors such as whether to concentrate on agencies or direct business or similar factors like whether to sell for share or sell for rate approach.
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Apart from the options mentioned above, while making a selling the sales person has to execute certain strategies like:1) 2) 3) 4) Selling solutions to advertising problems. Support in creating value for the product. Becoming the preferred supplier. Innovating etc.
Different strategies are adopted by different media sales department. Media with a flexible supply such as newspapers, magazines, internet websites etc can add up supply (in the form of pages) when demand rises therefore sales department in such mediums encourage advertisers to buy more. Compared to this, media such as television, cable, radio etc cannot add supply as and when demand increases. Some points about the various mediums: Newspapers: - Newspapers have to innovate in the form of new sections in the form of editorial content, new sections etc. Local newspapers have major competition from local cable television, local radio etc. Newspapers structure their rate card to encourage more advertisers to buy more space more often. This is because they can readily add up pages. Price negotiations happen over the favourable positions and the longest running advertising. A method of selling low rated spots in mediums such as TV are bundling them together with high rated spots by discounting the high rated spots where you cannot buy one without the other. But this strategy is not applicable to newspapers where every single unit is sold according to the rate card and on its own merit. Television: - Demand pricing is found in case of television where the supply cannot be stretched to meet higher demand for highly desirable spots. TV networks sell majorly on the basis of price and not added value as they are selling a non-differentiated commodity. (If every station adopted a strategy of selling for rate and tried to do what was the best for all stations and for the market, they would all come out ahead, as in the Prisoners’ Dilemma. On the other hand, the temptation is invariably too great for one station to do what is perceived in the short term to be in its best interests and will sell for share on each pending piece of business. But no station operates in a vacuum) Internet - Today, eBay is the largest used car dealership in the world. Fifty percent of all used cars sold in America are sold on eBay. Over 60 percent of all the people who buy a new car conduct research on the Internet before going to a dealer’s showroom. They come armed with the latest information—let the commission-hungry car salesperson beware. The Internet has transformed the automotive business. It has transformed the book-selling business. It is transforming the airline ticket-selling business and the travel business.
Structure of Sales Team:The structure of a sales team will be dependent on the mission, goals, strategy being adopted by the firm. A local television channel may have a national sales team, an agency sales team and a retail sales team. Another type of structure for a sales team may be that of organizing sales department according to categories such as fashion, cosmetics, automotive, retail etc.
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The advantage of organizing sales people by categories/verticals is that salespeople in each category become experts in that category. There is also a drawback of this system. If radio or television sales persons deal with an agency that has accounts in several categories, then several sales people will call on the agency. Generally agencies prefer one person calling on them from one media organization. Compensation also has a role to play in the determination of the sales structure because compensation will be linked to the sales that a salesperson is bringing and there will be some areas which provide a media organization with a major part of their business. There is also a product oriented sales structure whereby some television network companies may have a prime time sales team, a daytime sales team or a sports sales team. Some important questions that the sales team should ask are: 1. What is the level of flexibility in our sales structure? 2. Can we simplify our sales structure? 3. Are our best people closest to the customer? 4. Are our customers very comfortable in doing business with us and how responsive are we towards the difficulties and problems of our customers? 5. Does our current structure support our sales and sales management strategies and current market conditions? Qualities and skills needed to succeed in Radio media sales: People who work in radio media sales sell advertising time. Depending on the role, sales are made either by telephone or face to face. ? ? ? ? ? Communication skills (verbal and written) Good at developing and maintaining relationships Presentable Self-motivation and ambition Ability of the sales person to promise creative solutions to clients
Responsibilities of Sales Executive: ? ? ? The Sales Executive will offer advertisers media placement services Should do cold calls to expand client base Follow up on leads and referrals generated at corporate headquarters
Recruitment: ? ? ? ? Ads in newspapers, magazines Approaching consultants Employee references Campus placements
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Television
TV advertising mainly concentrates on the 18-49 age bracket. The primary sales management strategies are based on Demand Pricing, concentrating on both national and regional sales, concentrating on agencies etc. There are two means of revenue generation: 1) Subscription Fees and 2) Advertisement Advertisement generates around 70% of the revenue and the remaining 30% is generated from subscription fee. In the case of advertising on television there are three parties that are involved. They are:1) Creative boutiques/agencies 2) Media planners and 3) Media buyers Creative boutiques create commercials based on the media briefs that they receive. Media brief will be sum total of all the aspects such as the source of business, marketing objectives, target audience, budgets etc. Some of the top creative agencies in India are McCain, Group M and JWT. Media planners have functions such as deciding as to who is the target group, which television channel to put the advertisement on etc. Some of the top planners and buyers in India are Group M, Medicine etc. Media Buyers decide on the rates, spots, viewership and they also negotiate with the channels. Planners have their own softwares for optimizing that is this software helps the planners to identify what alternatives are available, evaluation of various options and making the right decision. Examples of such softwares are EXPERT (by Kantar Media Research, U.K’s second largest media group), Media Express, ADEX Data etc. Medicine group has its own software and does not use EXPERT. The above mentioned parties have to take into account the following parameters before making a decision:1) CPRP i:e Cost per Rating Point 2) TRP i:e Television Rating Point and 3) GRP i:e Gross Rating Point = ? TRP 4) Reach and the frequency of viewing (frequency varies from 3+ to 5+). The salesperson’s job includes maintaining a balance between reach and frequency of viewing. Sales people have to deal with advertisers, planners and buyers.
Functions of Sales Managers: 1) Research: - The first and foremost task of a sales manager is to conduct a background research and be fully acquainted with all the relevant data. 2) Put up the image of the company: - The sales manager is the representative of the company so the image of the company depends totally on the actions and behavior of the sales personnel. 3) Fix up meetings: - The next task at the hand of the sales manager is to fix up meetings with the potential clients and make a presentation.
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4) Create deals: - In the meetings the sales manager’s job is to create deals for the clients. There are two types of quotes that the sales manager can put forward: ? Normal quote ? Special Quotes(difference between prime time and afternoon slots) 5) Negotiations: - Because of the high level of competition there are a lot of instances where the negotiation skills of the sales manager can come in handy. He should make all possible efforts to get the best deals for the company. 6) Tactics for bill generation (Card rate and effective rate):- this is very essential function of the sales manager. He should be ensure that the payments should be made as soon as possible.
Sales Organization Structure:
The hierarchy in the sales organization structure is in the following way: ? National Head ? Regional Head ? Vice President ? Additional Vice President ? Senior Sales Manager ? Sales Manager ? Senior Sales Executive ? Sales Executive ? Management Trainee Sales people should be presentable and be aware of the sales techniques. They have to do a lot of research which includes aspects such as tracking advertisers on competitors’ channels.
Recruitment: - Is done through
1) 2) 3) 4) Campus drives in MBA colleges Directly recruiting people with prior experience On the basis of recommendations Poaching from competitors (of people with contacts)
Selection Criteria:1) 2) 3) 4) Common Sense Presentable Knowledge about industry Proficient in sales techniques
Training:-The sales managers are given training which covers the following aspects:1) 2) 3) 4) Sales Objectives Preparation of deals Approach Presentation
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5) Industry Overview 6) Latest technologies used in the sales process. 7) TAM(TV Audience Measurement) software training
Evaluations: - Evaluation is done on the basis of target achievement (mostly year account
sometimes monthly evaluation is also done).
Quotas/Targets: - Quotas are set on the basis of past data, industry performance and
future plans. In assigning the quotas or targets to the various sales people client’s budget is taken into account.
Key Account Management: - In TV industry every channel has certain key accounts
which are their most valuable customers in order to maximize revenue from this particular segment key account management practices are in place. There is a key account head that directly interacts with the client.
Distribution Channels: - There can be two types of distribution channels. The first kind
of channel is that of the sales people dealing with either the media planners (agencies) or directly approaching the companies for selling spots. The second type of distribution is that where the media organization deals with the satellite distributors who are responsible for telecasting of the TV channels. The kind of distribution channels to be adopted depends on the strategies of the media organization.
Value Added Services: - This is provided in terms of special offers like additional spots
being provided while booking certain number of spots. Companies holding large accounts are sometimes also made sponsors for certain shows.
Customer Relationship Management: - Customer Relationship Management is used
for maintenance of list of agencies and to keep track of customers. It also helps in data warehousing and management.
Sales Support Activities: - In order to further the relations with the clients various sales
support activities are undertaken in the form of organizing functions, award shows, dinners, movie premiers etc. At an individual level the sales manager can take the client out for dinner or drinks.
Computer Based System: - Apart from the various optimizing softwares a wide use of
Microsoft Office for data base management is done.
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Print Media
The modern advertising techniques make use of many ways to convey messages to the consumers. Print media however, is one of the oldest forms of advertising methods and has the advantage of reaching a wider target audience. Types of Print Media: ? ? ? ? ? Newspapers: Newspapers are the most popular forms of print media. The advertiser in this case can choose from a daily newspaper to a weekly tabloid. Magazines: Magazines also offer advertisers an opportunity to incorporate various new techniques and ideas. Magazines are one such form of print media that give a more specific target group to the client. Newsletters: Newsletters also form an important part of print media. These target a specific group of audience and give information on the product. Brochures: Brochures give detailed information about the product. These are mainly distributed at events or even at the main outlet when a consumer needs to read in detail about the product. Posters: Posters are forms of outdoor advertising. The message in a poster has to be brief and eye catching as it targets a person on the move.
Apart from these media, direct mail marketing, flyers, handbills/leaflets, banner advertising, billboard advertising, press releases etc are all the various types of print media. Indian Print Media Industry Overview Current Scenario The structure of the Indian print media industry is highly fragmented with importance to regional dominance. The Indian print media segment primarily comprises newspaper and magazine publishing. Book Publishing also forms part of the print media though currently the share is not substantial. The print industry is expected to grow from Rs 128 bn in 2006 to Rs 232 bn by 2011, at 12.6% CAGR. While the newspaper industry is estimated at Rs 112 bn, the magazine segment is valued at Rs 16 bn.
The Indian Newspaper industry is one of the largest in the world. It publishes the largest number of paid-for titles in the world. In 1997, the total number of newspapers and periodicals published was 41705, which include 4720 dailies and 14743 weeklies. The highest number of newspapers was published in Hindi, 16864
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Newspapers in India are measured on two parameters, circulation and readership. ? ? Circulation is certified by the Audit Bureau of Circulations which is an industry body. It audits the paid-for circulation of the member newspaper companies. Readership is estimated by two different surveys, The Indian Readership Survey (IRS) and the National Readership Survey (NRS).
Print Media Sales A job in print media sales essentially involves the selling of advertising space to media agencies or companies direct. Graduates are often targeted for entry level jobs in media sales and they are rewarded with competitive basic salaries, good commission/bonus schemes, the potential to travel and most publishing companies offer excellent training courses. An advertiser will choose which section of the newspaper to appear in (classified, recruitment, inserts or display) depending on their individual requirements. Often a local newspaper will have a weekly supplement or magazine which also offers advertising opportunities. Print Media space is either sold by: ? ? Linage: These advertisements are worked out by charging a set amount per line. Often used by very small companies or in the recruitment section, linage ads are very cost effective. Single Column Centimeters (SCC): this is a rate worked out by how many vertical centimetres an advert measures by how many column inches across. For example if the SCC rate was Rs 300, for an advertisement which is 4cm down by three columns across the cost would be Rs 300 x 4cm x 3 columns which are Rs 3600. Display or semi display: These are usually the advertisements found within the front half of a newspaper or regional supplement. Often companies add their logo, graphics or photographs to make the advertisement more eye catching. Companies will be quoted rates on the size of advert e.g. ¼ page, ½ page and whether or not they want colour in the ad. Extra charges are often added for more prominent positioning too e.g. back page, top right hand page, early in the news section.
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Functions of the sales manager: ? ? Make a list of the clients based on the verticals, for instance, the different verticals can be: automobiles, education, banking and financial services. Service the existing clients who advertise in the paper or are related. This can be done by: ? Giving them information about new schemes ? Planning any campaign ? Publicizing any ongoing sale ? If they need any print media support, help them with it. ? Introducing various schemes such as providing additional advertisements or discounts. Getting business from new accounts by going to the market, meeting with the companies, giving them information about rates offered and advertisement placements. Handle other issues related to billing etc. as in a way they are the face of the company.
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Earlier the print industry did not require much of sales personnel. But recent times have witnessed a decline in the print industry because of availability of a plethora of other options. So now the sales department has become more pronounced in the organisation as more of sales people are required to do the job.
Organisation structure:
VP (Sales)
Group Head/ Group Manager
Team Leader (Automobiles)
Team Leader (Education)
Team Leader (Banking & Financial Services)
Account ManagerMaruti
Account ManagerHonda
Account ManagerFord
Senior Executive
Senior Executive
Recruitment & selection practices: In print media industry, selection is done preferably of people from media background with a prior work experience of 1-2 years. Recruitment is mostly done from: ? ? Training: Generally, training is not provided in this sector as attrition rate is very high. The general trend is that people leave in a year or so. So generally the supervisor assists for a time span of 7 days & after that the sales executive is on his own. Compensation: It is on the basis of fixed pay plus sales incentives over and above the fixed pay. The compensation is decided on the basis of Key Resource Attributes (KRAs) which gives weightage to the following attributes: 1. Revenue: The revenue that a sales person generates is taken into account while evaluating him for compensation. 2. Market Share: The market share that a sales executive captures for the company in comparison to the competitors also plays a crucial part in deciding his compensation.
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B-Schools Advertising School
3. Yield: Last but not the least is how much money he is able to generate per square centimetre. Yield here basically refers to the amount after discount. Therefore, it signifies the rate that the salesperson commands in the market. Customer relationship management: There is a presence of a BPO cell in some companies but on a very small scale. Their role is also limited to handling complaints and giving information about schemes. Computer based systems: Companies like HT Media have an SAP system in place. It is used for client and billing data. But most of the things are done on paper or on mail or print outs. Sales support activities: As such there is no sales support activity. But most of the time the sales personnel are provided with a laptop and a sales kit, which comprises of the rate cards and important papers.
Radio:
Radio ad spends account for about 4 percent of the total advertising spends in India today, having grown from just 2 percent in 2004. The growth has been propelled by the emergence of the private FM industry in India. In terms of sheer reach, the Indian radio industry has been dominated by the state owned All India Radio (AIR), which covers 91 percent of India's area and reaches 99 percent of the population. However, the turning point for the industry came with the Phase 2 privatization reforms when the government rationalized the licensing fee by fixing it at 4 percent of the gross revenues. This, for the first time, made the business model viable for companies, and consequently many large corporate houses entered the private FM business. From 21 operationalized private FM stations before the phase 2 licensing, the number of stations shot up to over 205 by the March 2008. The industry now boasts of players such as Radio Mirchi and Big FM with a pan-India presence. Consequently, the radio industry is estimated to have grown at an impressive CAGR of 19.7 percent over 2006-08.
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It is estimated to have reached a size of INR 8.4 billion by end of 2008, a growth rate of 13.5 percent over the previous year. Growth in the future is likely to come through continued increase in the number of radio stations after phase 3 licensing, further liberalization of regulations as well as better ability of the radio stations to sell space. As regional businesses in India start to spend more aggressively on advertising to build brand consciousness, they are likely to turn to media like radio and print which are highly cost effective for regional ad campaigns. On the whole, the radio industry is expected to grow at a CAGR of 14.2 percent over 2009-13 (compared to 19.7 percent over 2006-08) and reach a size of INR 16.3 billion by 2013
.Sales: Sales in the radio industry are mainly the Advertisement Space selling. The time slots are sold to the advertisers and the revenue is earned through it. Since radio earns nothing from subscription as it is free to air, it has only one source of revenue i.e. selling of advertisement time. The marketing and programming teams sell the station to the audience and the media ad sales team sells the station to corporate and retailers (advertisers). The radio sales strategy is very different from any other because radio stations need to keep following up with clients and agencies for campaigns. Very few radio deals are made annually they are mostly on per campaign basis. So if you are a sales person handling DHL, just because they were on your station one month doesn’t mean you will ebb on their next campaign. Fresh pitches are needed. The organization of the Sales structure is given below:
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Sales Head
Manager
Manager
Executive
Executive
Executive
Sales teams normally have a national sales head, managers and executives. Managers handle teams with executives, and handle separate lists of agencies and all the clients they handle. Example: One team is in charge of servicing Mindshare in Mumbai (they handle ICICI, Tata Motors, HPCL) and another for MAXUS (they handle Vodafone, TATA sky, NDTV imagine etc.) Also many stations have a separate team for corporate sales and separate team for retail sales. Pricing Structure: Radio sales are done usually on a per 10 second rate basis. Rates differ from 1) 2) 3) 4) City to city, From station to station, From time band to time band It can differ from deal to deal.
It can be negotiated. It can be Rs. 300/10 sec (BIG FM when they launched) to Rs. 1800/10 sec (Radio Mirchi at their prime). Value added services given by sales people are sponsorship tags, RJ mentions (not recommended. You want to keep your RJ brand and endorsement free), association with certain shows, barter deals to back the rates, extra seconds if extreme case.
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Out of Home :
OOH Media broadly describes a variety of advertising vehicles, which reach consumers where they shop and travel. These include: ? ? ? ? Billboards / Hoardings Street Furniture: Bus queue shelters, phone kiosks and newsstands. Transit/Airport/Malls: Buses (sides and fully-wrapped), trains, station platforms, commuter rail cards, underground, airports, malls, trucks, taxi tops. Spectaculars and Walls: Large displays draped or hung on sides of buildings, murals, animatronics displays.
OOH displays are intended to get people's attention while they drive or walk. OOH advertising is an effective way to remind the audience of the product being advertised. This works as an impact medium for national advertisers as it reinforces the impact of a particular brand. Industry Overview: Today, the Out-of-Home (OOH) market is estimated to be at Rs. 6.0 - 7.0 billion and it accounts for approximately 6.0% of the total ad spends in India. As shown below, the OOH ad spends in India compare favourably to the worldwide ad spend on OOH. The OOH industry in India is largely unorganized with very few organized players such as Times OOH, Clear Channel, Selvel, Vantage, Pioneer, Portland and Laqshya. The OOH market is highly fragmented, with no significant dominant players. The fragmented nature of ownership makes OOH a difficult medium for advertisers to deal with.
(Source: Advertising Expenditure Forecasts, October 2004 by Zenith Optimedia.)
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A successful OOH vehicle requires a minimum critical mass of targeted audience. As a result, this medium finds widespread acceptance for large advertisers in metro cities and a few large towns. With increased incidence of advertising spends by local advertisers, the attractiveness of OOH as a medium, in smaller towns could increase. Sales Organization: As this sector is largely unorganised and consists of a number of small, local operators often there is not much to say in terms of sales management. The owner puts up his contact number on the site and is contacted by the prospective advertiser. For organised players like Times OOH and Laqshya we see that they have a basic sales team headed by a Sales Manager. There is no clear basis of classification of territories/ industries that are handles by a particular team. The sales people contact prospects and pitch for their outdoor sites communicating the benefits to the customer. These benefits can be in terms of: ? ? ? ? ? ? ? ? Demographic Coverage: Sites can be classified on the basis of targeted audience as in wide coverage and focussed target audience coverage. Captive audience: As in how much time people spend near the site as this enhances the probability that the advertisement would be watched and would impact the person. Eye level visibility Cost efficiency Quality of display boards Ambience around the site: This factor is important in case of Delhi Metro as advertisers pay higher to have their products advertised on high quality display boards in ultra-modern ambience. Unavoidability Various OOH formats to suit all brands, creatives and budgets.
The salesperson has to sell the outdoor site to the advertisers. The sales process remains the same as in other industries. Basic sales training is provided to the salespeople and their evaluation is done on basis of achievement of set targets. However, targets are difficult to set in this industry, especially for new sites. For them, sites are valued based on the benefits (like coverage, visibility etc.) they provide to the customer. In addition to a dedicated sales force, often companies print their contact numbers on their sites so that prospects could contact them on their own. Companies like Times OOH have brought innovative mediums of advertising such as video LED walls- a medium which has brought in the oomph factor to outdoor media and provides a smart platform for marketers to showcase their products/services. This medium brings dynamism to the otherwise static traditional outdoor media by bringing in Motion and Sound. Also, these OOH companies follow several customer relation management practices. For example, often for major accounts, when a customer books a large site for its advertisement, the company provides him with some small sites free of cost. This may mean that for a big customer who buys large bill boards all over the city, the company may provide him a few bus shelters and other signages free of cost.
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Internet:
Internet advertising is very similar to TV and radio advertising. The programs are offered as a free service; commercial advertising pays the expenses. The same is true of Internet advertising. The information is free, with the costs defrayed by advertising. A major advantage of Internet advertising is the ability to attract a specific target audience. This advantage is limited or nonexistent in other forms of media advertising. With the Internet, ads are directed towards the right group of people. Internet ads are known as banners. Virtually all banners are links to other sites, but there are still those few that are just meant to be seen, like billboards. One advantage of Internet advertising is that it opens new possibilities to spread messages to a targeted audience. By advertising to a particular group, chances of success are indeed great. The internet advertising industry has seen a CAGR of 45% during 2006-08 and is expected to have CAGR of 27.9% during 2009-2013. The various media types are Company Websites, Social Networking Sites such as Facebook, Orkut, MySpace, blogs, Twitter etc. Indian internet users view blogs and forums as good sources of information and an excellent platform for publishing their own views to the world. 78% of consumers trust - either completely or somewhat - the recommendation of other consumers on the internet. 55% of consumers want an ongoing dialogue with brands. All companies are trying their best to establish their brands online through free mediums such as Facebook and Twitter or are going towards internet advertising. Internet advertising is one of the most talked about things in the media industry right now. With more and more people spending their time on the internet, Ads have to be placed on the internet in front of the Target Group. A company which launches an online campaign has: 1) A dedicated website 2) Facebook and Twitter integration(social networking integration) 3) Ads on other sites through Google ads or similar ad networks Sales in the Internet as Media The sales for advertisement space in internet are done in two broad ways 1) The media buyers for advertisers approach companies having popular sites with high traffic and offer to give ads on it or vice versa.(one to one) 2) Through existing ad networks like Google Adsense (Adwords) or Adbrite where these act as middle men. Both methods have their own pros and cons depending upon the requirement and size of the advertising campaign. Networks like Google Adsense make it very easy to serve ads. A company can contact Google through their website and chose a role as advertisers. Google checks and approves the site (or brand), then you can design your ads and buy certain keyword which would be used to serve ads. On the other end are all the publishers on the internet such as bloggers and site owners who sign up with Google and after getting their sites approved can serve the ads of the companies which partnered with Google as advertisers. Money is transferred from advertisers to publishers through Google. There are a number of advertising pricing structures which are commonly known as Cost per Action (CPA):
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1) Cost per click (CPC) –Whenever a user clicks on an ad, money is charged from the advertiser and is transferred to the site owner. Google acts as middleman and keeps a commission from the transaction. 2) Cost per thousand Impressions (CPI/CPM) - An online advertisement impression is a single appearance of an advertisement on a web page. Each time an advertisement loads onto a user's screen, the ad server counts that loading as one impression. 3) Cost per Lead (CPL): In this structure, advertisers pay for an interested lead, i.e. the contact information of a person interested in the advertiser’s product or service. Google is the biggest marketer on the internet and owns adwords and adsense. In an apparent attempt to streamline and bolster its relations with agencies who control spending from big brands, Google gas decided to create a new position of Vice President (agency and Industry Relations). Previously sales executives at Google were organized by regions but this created quite a complex matrix of representatives and Google found problems with that and as such has decided to abolish regional distinctions and organize its sales team exclusively by industry i.e. retail & technology, consumer packaged goods, business to business, financial services, media, travel and financial services.
Conclusion:
Sales in the media industry are unique in a number of ways: ? ? ? It is highly dependent on other industries like financial institutions, FMCG Companies etc. because they are its direct customers (for advertisements). It is a very innovative industry and as such makes use of many innovative practices to boost its sales. The sales process is highly negotiation based as there is no clear parameter as to how one’s product/service is better than the others. This is very evident in case of selling ad space for Television serials - when two shows have similar TRPs (Television Rating Points), there is no clear parameter as to why advertisement space during one of the serials should be sold at a higher price than the other. It depends upon the negotiation skills of the sales team along with a number of other not so important parameters. Also there is high competition in this industry and an imminent concern is the fragmentation of viewership. As a result differentiation of content is going to be increasingly important as the number of channels keeps increasing. There is also an issue of rising production costs for television content producers due to rising costs of acting and technical talent.
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References ? http://www.equitymaster.com/detail.asp?date=9/14/2007 &story=5 ? http://en.wikipedia.org/wiki/Print_media_in_India ? http://www.salesgravy.com/JobBoard/job/6489387 ? http://www.buzzle.com/articles/types-of-printmedia.html ? FICCI and Price Waterhouse Coopers Report on Indian Entertainment and Media Industry ? FICCI-KPMG-Media Entertainment Industry Report ? Media Selling- By Charles Warner Other sources of information: ? ? ? ? ? Mr. Indrajeet Sen, President, Laqshya Media Mr. Alok Kumar, Research Analyst, TAM Mrs. Vidya Kadian, Sales Team Leader, HT Media Mr. Nikhil Awasthy, Student NMIMS Miss Kritika Mathur, MBA Media Advertising
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