With a virtual explosion of TV channels, the advertiser is confronted with high media fragmentation. While it makes it difficult for mass product marketers, the smaller advertiser has an option to target specific audiences at lower rates.
The next time you switch on the TV, don't panic at the number of channels staring back at you. Chances are you haven't watched (or even heard) all of them. You don't need to. Not all of them are targeted at you. While you just need to surf channels at the flick of a button, the plethora of channels is proving to be worrisome for advertisers who want to see a buck well spent.
With the proliferation of different media forms, reaching the right audiences may mean selecting media that are highly specialised and target focused audiences. Future challenges for media specialists are likely to get more complex with different implications for mass and niche advertisers. Media fragmentation is not a new phenomenon but with return on investment (ROI) going down over the years, it has become more challenging for media professionals to give their clients the right advice to enable them to build sustainable brands in a profitable way.
Media segmentation proves helpful for specific categories which are trying to reach out to specific audiences and want to stay away from traditional mass media. Pranesh Misra, President & COO, Lowe, agrees, "For some categories, specialised media would be useful. Children's channels for kids' products; music channels for teen products and business channels for the executive segment are examples of that. Similarly, in the print medium, sections of the publication could be equivalent of specialist channels, like education, jobs, real estate, health and beauty, weekend and so on. Each of these attracts different need groups within the publication and would be a worthwhile buy for specialist products."
"With better technology and database, marketers can now achieve a much higher degree of customer segmentation which implies the need for multiple vehicles and channels to reach the specific customer segments, who could even be living under the same roof," says Suresh Kumar, Director of Mindspark Consulting, a Chennai-based firm.
Observes L.V. Krishnan, CEO, Tam Media Research, "With fragmentation the return on investment could get wasted for the mass advertiser, while it can be a boon for the niche advertiser who wants to narrow down his target segments. It all depends on the brand's communication objective."
Agrees Lynn de Souza, Director, Lintas Media Group, "The mass marketer reach will get lesser with so much fragmentation. In fact, this could give niche brands the chance to get on to a smaller channel and thus avoid wastage."
Media fragmentation has created a level-playing field enabling small, regional brands to at least compete in share-of-voice terms in their geographical space, points out Suresh Kumar.
Expanding on the implications of fragmented media on ROI for advertisers, M.G. Parameswaran, Executive Director, FCB Ulka, says, "There are today niche TV channels that deliver decent numbers to opinion leader target groups. We have used niche channels to great effectiveness for campaigns on cars. With the growth of news as a genre, we can reach a significant number of males through that niche mix. The same is true of Hindi and English film channels. In the case of kids we can reach a portion of kid opinion leaders through the cartoon and kids' channels. As a result of all this mass Hindi channels are being seen as driver channels for only the big budget brands that cut across a vast cross-section of the populace. To reach that kind of audience channels like Zee, Star and Sony continue to rule the roost."
Fragmentation helps the low-budget advertiser to avoid the clutter in mass media and reach the right consumer. "Yes, media fragmentation is definitely good not only from the point of helping focused targeting but also in that it gives low entry cost options to advertisers. In fact, a lot of advertisers with small budgets are able to come into TV/print due to fragmentation. Having a large media budget is no longer a prerequisite for getting into these media. As for mass media advertising, it will continue on the numbers game,"says Anupriya Acharya, President, The Media Edge.
Outlining the future, FCB's Parameswaran adds, "We may see a reconfiguration of the mass channels in the coming months. They may start of<147,1,7>fering a differential rate for products that can live without them, and so forth. The other interesting development would be the growth of two-TV households. A two-TV household may have a very different channel-watching mix. One may be on mass channel all the time, while one flits between news and music, depending on who is handling the remote, the father or the kid! Our measurement tools today do not track this trend, but that may have to change soon."
At the same time, fragmentation will continue to have ad spends consolidating among the top few media brands but can hurt the rest of the players in the industry. Admits Abraham Thomas, Chief Operating Officer, Radio Today (Mumbai) Broadcasting Ltd., "Most of the ad spends are concentrated among the top four or five players. This has led to rates coming under pressure and there is hardly anything left for the rest of the players who are made to drop rates."
Meanwhile, mass media will continue to cater to mass advertisers and stay the best in terms of measurability. So advertisers keen on tracking their ROI would first opt for traditional media like print and television. As Lowe's Misra claims, "FMCG, mass services sector (like telecom) and mass durables sector (like CTV and refrigerators) still need mass media to address a wider cross-section of audience. So, there will continue to be a need for mass media vehicles — and will continue for the foreseeable future in India. We are still looking at huge growth from people who are at the bottom of the economic pyramid."
While there is media fragmentation on one hand, the advertiser is simultaneously looking at ways to increase his ROI by having out-of-the-box solutions. As Acharya says, "The two situations can co-exist as they are not really linked. The former adds to more choice within the existing media like TV or print while the latter refers to new forms of reaching the consumer. From the advertiser's point of view, one needs to be on top of all developments on each front. In the former case, one has to harness the same medium in a slightly different manner while in the latter, the new form of reaching consumer needs is to be understood and then exploited."
Adds TAM's Krishnan, "As consumers blank out repetitive message communication, the advertisers will seek innovative out-of-the-box solutions like in-programme product placements or sponsorships to break clutter and bring in high noticeability. The objective of the advertiser is to gain higher ROI. This can be attained either through the innovative product communication exercise or aligning communications to where the target audience is available. Thus, if a niche channel delivers the core target group extremely well, then an advertiser (for a premium product) will prefer to invest there vis-à-vis a mass channel. On the other hand, a mass producer for a popular product may still want to communicate across channels."
The debate cannot be about mass versus niche media, says Mindspark's Suresh Kumar. Both have their place and role in a media plan. But for marketers and planners, it is about being in the relevant media. Targeting messages in a focussed manner at a time and place when the audience is most receptive calls for better understanding and sharper definition of target audience. "The sharper one gets, the better is the media ROI," he adds.
But times continue to get tougher for media planners. "ROI is getting severely affected because fragmentation is leading to more money being spent to reach the same set of people. The increase in quantum investment is between 10 and 30 per cent," estimates Meenakshi Madhvani of Spatial Access, a media audit firm.
More the media options, greater the audience fragmentation. Fragmented media would entail more complications in media planning to reach the same number of people. Advertisers now have to depend on a larger number of media vehicles. This would lead to duplication and wastage as far as the mass advertiser is concerned.
Fragmentation adversely affects advertising ROI and the advertisers have to continue to find different ways of maximising efficiency.