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Are FMCG advertisers undermining the power of print?

Are FMCG advertisers undermining the power of print?

Author | Abid Hasan | Thursday, Jul 31,2014 8:12 AM

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Are FMCG advertisers undermining the power of print?

The Indian FMCG industry is poised to grow in the coming years.

The overall fast moving consumer goods (FMCG) market is expected to increase at a compound annual growth rate (CAGR) of 14.7 per cent to US$ 110.4 billion during 2012–2020, with the rural FMCG market expected to increase at a CAGR of 17.7 per cent to US$ 100 billion during 2011–2025.

Rising incomes and growing youth population have been key growth drivers for the sector. Brand consciousness has also aided demand. It is estimated that First Time Modern Trade Shoppers (FTMTS) spend will reach US$ 1 billion by 2015.

The industry has witnessed healthy foreign direct investment (FDI) inflow, as the sector accounted for 3 per cent of the country’s total FDI inflow in the period April 2000 to October 2013. Organised retail share is expected to double to 14–18 per cent of the overall retail market by 2015, according to research done by IBEF on Indian FMCG industry.

With such prospects, this sector bets big on advertisements. Each year, thousands of crores of money goes in promoting FMCG product, but does print always get a smaller ad pie and if so, why?

Why is print lagging behind in terms of FMCG advertising in comparison with TV? We spoke to some of the leading media players and experts to understand the rationale behind this.

Suresh Srinivasan, Vice President, The Hindu stated, “TV largely functions with reach and cost effectiveness. It helps to give a better ROI of the product if advertised on TV. TV ads impact on a pan India basis at a single time and easily hits the emotional chord of the viewers and easily persuade them while in this case newspaper fails to do so.”

He also added, “But on the other hand if a particular product wants to advertise in a certain specific area, print is the best choice as far reach and cost effectiveness is concerned.”

Managing Director of Prabhat Khabar, K K Goenka feels the visual impacts of TV commercials are more persuading than of newspaper. “TV ads are more impactful due to visuals and sounds, but trend is changing now with technology and creativity coming in, marketers are looking for print ads too and their spends have also increased,” he said.

Change in trends

Varghese Chandy, Chief General Manager, Marketing, Malayala Manorama thinks print is becoming increasingly important. He said, “I must change this observation. Print is becoming increasingly important for FMCG clients. For instance, today the top advertisers on print are some of the FMCG brands. FMCG clients understand the importance of print and are considering print as an important part of their media mix. There is a lot of clutter and fragmentation on TV and therefore print is being considered more and more, especially the front pages of the newspapers. This has been understood by the local brands and they have successfully launched local FMCG brands through newspapers. Most of them having succeeded in local markets are going national and are also challenging some of the MNCs’ FMCG brands. This is being understood by MNC clients also and they have started using print.”

Supporting Chandy, Sanjay Mani,  National Head DB Connect, Dainik Bhaskar Group said, “Typically FMCG as a category looks for a quick reach build-up which is cost efficient. This is primarily due to their need to quickly drive trials and repeats, while getting existing customers to continue using their brand of choice.”

He further added, “It would be unfair to say that print lags behind TV or that it needs to come at par. It is important for one to understand that TV and print deliver different benefits to brands and that their role is complementary rather than competitive. The days of ‘choosing one medium and going to bed’ are over. Smart brand managers ask serious questions of every medium and then take an educated call on the media mix. One thing is certain… Print is here to stay.”

Mani shared that in Dainik Bhaskar markets, FMCG brands have seen a positive result to their investments. Today large MNCs compete against local Indian brands for a larger slice of a burgeoning market. The battle lines have been drawn and print is ideally poised make the decisive difference. Obviously brands that realise the value of print and partner earlier will have the advantage.

The trends of advertising over the past three years have shown a distinct increase in FMCG advertising in print. Every media study in India predicts that the next 3-5 years will see FMCG advertising growing in high double digits in regional print. Internationally print is now the 2nd most important medium attracting 20%+ investments of all FMCG brand advertising.

TV leads to reach and cost effectiveness

FMCGs have a few basic requirements - to announce, to engage, to sustain/remind consumers to buy their products on the next purchase occasion. The communications for FMCG brands are mostly emotional and less informative. When information has to be given, it’s often not topical nature, it’s more educative.

Magazines might play a more crucial role for some FMCG categories rather than newspapers.

For announcement it may still be interesting to look at newspapers. Learning from some FMCG clients at Madison shows merit for newspapers but the role drops after the initial/one time use.

Activations for FMCG brands where consumer involvement and participation is sought is another type of communication where Madison has found newsprint to be extremely effective for its clients.

Ruby Bana, Chief Strategy Officer, Madison Communications said, “Most FMCGs are in the mode of just reminding the consumers and sustaining or cost efficiently increasing market share. TV fits right in on this agenda.

Our aggressively growing FMCG clients on the other hand use multimedia much more, this includes Digital as well as Print.

Madison bespoke researches on the role of media across various audiences and 18+ categories over the last 2-3 years have pointed out one truth -  that TV ad and word of mouth are the most powerful mediums.

TV helps builds and sustain awareness and brand imagery, however the intention to buy is linked directly to Word of Mouth. As a media agency we know in India TV still is the most cost efficient medium.”

She further added, “However the other interesting thing we observed across categories is that the gap between the highest spenders on TV ad recall and the 3rd/4th highest spender across categories was non existent or very small and certainly not in line with investment on TV, and often these 3rd /4th brands were growing at a much higher rate than the lead brand.”

Hence the challenge for FMCG brands is to know at what point TV expenses do not lead to incremental results , the trick is to know this point and start engagement led activities to build word of mouth, Bana explained.

When asked about what is lacking in print she said, “The answer is simple. Print can play a role as far as creating topicality and talk-ability is concerned. Print helps shape opinions much more powerfully and with an important audience.

If print can figure out innovative ways of extending this benefit to FMCG clients communications, rather than simply catching up for share of ad spends they will have an indisputable place in the FMCG brands communication plans.”

As per Arun Sharma, VP, IPG Mediabrands, “The two most important criteria of TV advertisement for FMCG are reach and cost efficiency. The products don’t cost much and reach the masses, while Indian females are more inclined towards TV rather than newspaper. This medium is used by FMCG advertiser by using best audience in the mind.”

He also pointed out, “ Lately there has been a change and FMCG has also started taking print. But that is for special occasions only. If there are any new launches they will book front pages or back pages.”

Source- Indian Brand Equity Foundation

 

 


 

 

 

 

 

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