Mumbai: The last few weeks have seen brands such as Kingfisher Airlines, Air India, Hero Honda, SBI, Easy Bill India and Identiti—the nameplate brand from Pampered Home Pvt. Ltd—running full-page ads, front-page flaps and cover jackets in newspapers and magazines.
This big bang approach in media planning and buying seemingly goes against the trend of advertisers opting for smaller or more concise ads during an economic downturn, but is actually driven by smart budgeting and marketing logic. In a twist of selective scheduling, some advertisers are looking at cutting down on frequency and duration of the ad campaigns and instead running a few big ads during select periods.
Maximum mileage: Advertisers are now timing their ads, cutting the frequency and duration of campaigns. Abhijit Bhatlekar / Mint
Categories such as consumer products may choose to advertise in bursts at the beginning and end of the month, which may coincide with consumer buying patterns, as opposed to running the campaign throughout the month, explains Chandradeep Mitra, president of Mudra Max, media specialist of Mudra Group. In general, scheduling will be much tighter for ad campaigns and a campaign scheduled to run for six weeks may only run for five, he adds.
The changing business models of publications can also encourage the “think big” approach in a downturn. Mitra agrees that it may seem counter-intuitive to run full-page ads, especially front-page ads, during a time when everyone is cutting ad spending. “But what we noticed was a travel portal advertising aggressively in The Times of India group publications, which seemed disproportionate to spends in the category, which had cut down ad spending drastically due to economic considerations. It turned out that the company had entered a Times treaty deal.”
A few of these full-page ads could be attributed to private treaty agreements (the treaties translate into the publisher picking up equity stake in companies in return for promoting those “partners” through long-term advertising and other publicity deals). Also, some clients may have to use a certain amount of advertising space within a certain period, which is possibly why such large ads are being published, adds Mitra.
S. Sivakumar, CEO designate, Times Private Treaties, a division of Bennett, Coleman and Co. Ltd, or BCCL, which publishes The Times of India, however, says there is no link. “I have been monitoring ads by our treaty clients and there is no spike. There is no pressure on any of our clients to put out ads or use up a certain amount of inventory before the end of the year. Treaty clients have to be more prudent as these ads have to generate sales.”
BCCL also publishes The Economic Times and competes with HT Media Ltd, publisher of Mint and Hindustan Times.
The most obvious reason for buying king-size is that this is the best time to buy big ads for much less. “Larger sizes or high-impact ads, like full page and front page, are happening due to better rates being offered by media owners. We are seeing incremental discounts to the tune of 30-50%,” says Sejal Shah, vice-president, India Media Exchange, the centralized media buying unit for Zenith Optimedia and Starcom MediaVest Group.
Of course, certain categories have always attracted higher incentives or discounts. These are categories, such as finance, which are in no mood to spend because times are tough. Or, there are categories such as life insurance where ad spending is traditionally skewed towards television, adds Shah. The line between ad rates for national clients and retail (local) clients is also blurring a bit, says Shah.
Traditionally, retail rates are 40-50% lower than regular rates as they are applicable to local businesses which may want their ads to appear only in a local edition. National brands these days are, however, striking rates closer to retail rates for national release.
Some media houses are also throwing in freebies. Anita Nayyar, chief executive officer, MPG India Pvt. Ltd, the media buying arm of Havas Media, says that because of poor market sentiment, ad rates are being discounted by 10-20% through various routes. “So, a property or position which may have been prohibitive before has suddenly become affordable and attractive as media owners offer more value for money,” says Nayyar. “Hence, if you were paying Rs10 lakh for one exposure (ad), today they may offer 2.5 exposures for the same amount.”
Mitra explains that innovations in print, such as full-page ad jackets covering a newspaper’s front page, always came at a premium but now these are being offered as incentives to clients.
He says that few media houses will lower prices officially as it would mean resetting benchmarks, which would hurt business in the future. So, while there may not be a substantial drop in ad rates, media houses are throwing in freebies and value-adds for consumers without changing the rack rate (officially quoted maximum rates), resulting in an effective drop in ad rates.