The year 2012 started on a pessimistic note and print media marketers are already feeling the pressure from over cautious advertisers. Can the print medium hit back? The Pitch Madison Media Advertising Outlook 2012 expects the print industry to grow by six per cent, to clock a revenue of Rs 11,438 crore.
While, it retained its share in the entire ad pie, print might feel pressure from growing television and internet and see its share go down to 40.8 per cent in 2012.
Punitha Arumugam, CEO, Madison Media Group, sums up the mood for print: “In print, the current cautious sentiment in core print categories in BFSI/education etc., is expected to continue until there are policy changes at the macro level to drive an invest sentiment amongst these categories.”
She expects the durables segment “to see a slow first half including the core summer period on the back of cost increase and financial interest rates.”
The upside, she feels “will be the anticipated auto launches and battle for shares, and the assembly elections in some states.”
Shantanu Bhanja, Vice President, Marketing, HT Media, feels that the year 2012 will be tough for the print industry in general. Publications which rely only on conventional ways of growth will find the going tough, he says.
“With large contributing categories like real estate and IT & Telecom under pressure, along with the weak Rupee and a global slowdown staring at us, the outlook for 2012 is not hugely positive. At HT, we have already geared up for the situation with increased focus on customised solutions and special projects. We believe that our strong customer-centric approach and the many initiatives lined up in the non-traditional growth areas will see us growing through the year,” he adds.
On the other hand, Sanjeev Kotnala, Vice President, Brand Comm & National Head, Dainik Bhaskar Group, is optimistic about the year ahead. “We are optimistic about the next financial year. education, automobile, lifestyle, real estate, government were the major categories in 2010 and were big spenders. Also, a welcome sign has been the return of FMCG in print. We do not see major changes in the top categories for print in 2012. Though if the environment is conducive, insurance and telecom too may comeback with heavy inputs in print,” he says.
Bhanja too feels that more FMCG players will show interest in print. “The solutions route will bring in more FMCG advertisers and brands to the print fold. Also, major web based commercial services, online discounting sites etc will be the new ones entering print,” he says.
However, he says that it will be a 360-degree solutions “combining internet, on ground, radio and print along with driving response to RoI-savvy advertisers that will ensure newer categories and advertisers coming to print.”
Like last year, when regional press over-powered English, Kotnala, feels that the same will be repeated in 2012 too. “This will be more apparent with the advertisers finally equating media spends with the market potential and response,” he says.
Maheshwer Peri, President & Publisher, Outlook Group and Chairman, Pathfinder Publishing feels that magazines will greatly benefit from the government’s opening up of FDI in single brand retail stores. “This is a very niche segment and more than newspapers, magazines will benefit from it, as the single brand retail stores will try and target niche audiences,” he says.
With literacy rates improving each year and with the expansion of the middle class, Ashish Bagga, CEO, India Today Group, sees a lot of potential and synergy in categories like education, financial services, luxury, real estate and government advertising. “Advertising in 2012-13 looks promising and we believe the second half will witness accelerated growth levels. We will see several new launches in 2012-13 as well.,” he says.
Meanwhile, the worry for AS Raghunath, print expert and independent consultant is that print is losing youngsters, despite doing its best to woo them through content customisation – both soft reading material as well as topics of academic and career interest. “The overall teen segment of 12-19 years has seen a drop from 25.6 per cent share of readers in 2005 to 22.5 per cent in 2011, losing thereby 40.61 lakh readers. But if we split this segment into junior teen segment of 12-14 years, the cluster has seen a marginal jump from 8.7 per cent to 9.4 per cent, adding thereby 17.98 lakh new readers,” he says, adding, “The prime youth segment of 20-29 years has also witnessed a fall. It had a share of 28.2 per cent readers in 2005, which has now come down to 25.4 per cent share, losing a chunk of 33.49 lakh precious readers.”
The answer, experts feel is to go integrate and go digital. K Balaji, Managing Director, The Hindu, says, “Most of the media houses in the country are preparing to go digital to increase readership especially among youngsters. Publishing houses should also focus on Tier II and Tier III towns where an untapped educated population is in search of quality print content. If the South Indian publishing houses take initiatives in these directions, it is likely that the region will continue to remain one of the strongholds of the printed newspaper.”
Another worry for print is the possible weakening of the Rupee against the dollar, which affects newsprint prices and margins and bottomline. “Exchange rate, rising newsprint prices, stagnant spends from large contributing categories, reduced overall media budgets by some large corporate advertisers will be some of the challenges for 2012,” says Bhanja.
Newsprint prices affect pagination and overall cost of providing newspaper to the readers. This is a critical cost. The operating model of newspapers in India is advertising based and not circulation revenue driven. “Escalation in newsprint prices normally impact pagination of newspaper, which is manageable in short term. But yes, in markets – states where print prices has forced a higher cover price, it definitely has affected circulation of print companies and in such cases there readership growth has been marginalised,” says Kotnala.
So will all the upheaval in the economy and a cautious approach, lead to discounting in ad rates? A definite “no” says Bagga. “There has been an astounding increase in the number of titles originating and being produced in the region, in addition to large-scale investment in retail, fresh marketing tools and increasing standards of production. So, we see an accelerated graph.
I don’t think cutting advertising rates is any solutions to making up for lost business. The need of the hour in creating consumer engagements that can command a premium,” he adds.
And if there’s a degrowth in readership, that will affect bargaining power and ads. The times ahead could be tough. Bhanja’s feels that the outlook for 2012 is still very fluid and it is prudent only to wait and watch. It will be after the first quarter of 2012-13 that we can predict some trends with conviction.
Meanwhile, Bagga is bang on by linking up the growth or degrowth of the industry with the environment in the country. “Decisive leadership at the political and economic front, favourable economic indices that fuel growth, strong consumer sentiment and a liberalised financial framework will work wonders! The challenge will arise if this does not happen,” he declares.