CEO | 09 Mar 2012
The way TV has fragmented, marketers will surely realise that their spend in print delivers. Marketers need delivery on-ground and they need response, and on that count, print will score higher any day. Television advertising overall is growing also because of the multiple platforms with many channels launching, but the question is whether they are delivering? I don’t think so. There are maybe 50 television channels of any substance. Advertising on the rest is wasteful.
Jagran Prakashan has chalked another busy year for itself. As the company gears into making 2012 another year of reckoning, Sanjay Gupta, CEO, Jagran Prakashan and Editor, Dainik Jagran has laid out a clear path ahead for Jagran. This not only includes focus on all brands such as hyperlocal offering, City Plus; English publication, Mid Day and its digital presence but also a further push to Dainik Jagran. In this conversation with Noor Fathima Warsia, Sanjay Gupta speaks on the company’s growth in 2011, and plans for 2012.
Q. Jagran has had a busy 2011 – did the year go as per plans?
I am satisfied with the way the year panned out for us. We added more copies to Dainik Jagran and Mid Day has grown significantly. I-next did reasonably well in terms of revenue and circulation. We managed to launch Jagran Punjabi and grow Inquilab. It was a very good year in terms of new offering that we added to our kitty and to the market per se. But all of that starts yielding fruit in another year or two. As far as circulation goes, we have increased copies. It was on target for a good part of the year but newsprint became very expensive, and then some thinking went behind rationalising our targets and not being extremely aggressive. We restructured expansion plans to be stretched across two or three quarters rather than focusing on it all at the same time.
Q. You took some strong decisions to streamline the Mid Day part of the business. What was the thought-process there?
When we had taken over Mid Day, we had made it very clear that our focus would be Mumbai. We had given time to the Mid Day team to come up with concrete plans for Delhi and Bangalore but eventually we realised that we needed to give more energy to Mumbai. It was a very tough call to take and extremely difficult to close two editions, but it had to be done. We are keeping the Pune edition.
Q. And has the focus in Mumbai paid off?
It has paid off very well so far. Mid Day has shown increase in readership. It has picked up numbers and we are getting excellent bookings. Circulation is on the overdrive and we have structured the editing part as well. It has been good and I am satisfied with the way plans have shaped up. We can consider another market for Mid Day once the Mumbai expansion is over but for the next two years at least, Mumbai will be the core market of focus for Mid Day.
Q. And the objective is to bring Mid Day back at least to its number two status in Mumbai?
Mid Day enjoys a very long bond with Mumbaikars. And it has only deepened further. The idea is to take it to a leadership position but at the end of the day, we don’t want to compete with the mainline dailies. Mumbai Mirror is Mid Day’s only competitor. But Mid Day is a 40-year old brand. The whole idea of buying Mid Day was that it is a robust brand in Mumbai that enjoys great traction. Every expansion drive we do is accepted very well. Once we strengthen further and stabilise, we will go for the next phase of growth but we will not be rushing into it.
We will monitor the results of our efforts on a quarterly basis – the response of increase in copies should translate into increase in revenues, and we will keep a close watch on how this progresses. But as you know, for any newspaper, the first indicator of increase in copies is the increase in classifieds, because local advertisers such as retailers immediately sense how things change on-ground and they don’t wait for readership figures to come. They get an immediate sense of how a newspaper responds. And we have seen increase in classifieds in Mid Day.
Q. You have not integrated the sales function across your brands and every vertical has its own head – would you ever revisit this structure to integrate it?
No, vertical sales teams have their own heads and they report to a single entity but each vertical has its own team. To leverage advantages of scale, the strategising is done by one team but one eventually needs unique feet on the ground. Every brand needs to focus on its ad space selling and also drive its own marketing. Multi-brand selling is a challenge and we are continuously training our core teams on it, as the group is progressing towards many more brands. It’s challenging but people are responding to it, many have learnt the art of multi-brand selling. I am sure you will see further evolution on this front.
Q. One area that has seen increased evolution for Jagran is your hyperlocal offering. In the last two years, that has truly gained momentum…
We always believed in hyperlocal offering, and we have it in the form of City Plus, which is in fact five-years old. We first started it in Delhi NCR, where we tested the product, got it right and then expanded it into other markets. In the last two years, it has given us tremendous response because we have gone to markets such as Bangalore and Hyderabad, where no one knew Dainik Jagran. The whole idea of the product has clicked well in these markets and there is tremendous repeat advertising.
Q. And what would be the incremental growth that the offering has managed for Jagran?
Our flagship product, Dainik Jagran, is too big. Even as the other offerings see increase in advertising revenues, Dainik Jagran still takes 90 per cent of the overall advertising pie that the group gets. The other products are between 10-15 per cent.
Q. How would you like this ratio to change in the next few years?
I would like it to change, but the truth of the matter is that none of these brands are likely to become as big as Dainik Jagran. Much as we focus on all the other verticals, there is always a constant push towards Dainik Jagran as well. So to say that the ratio will change dramatically towards a 70-30 for now would be ambitious. It can happen but it will take time, and for it to happen, particularly Jagran Engage and Jagran Solutions will need to fire more. There is still time for the likes of a City Plus to become that big. You must understand that even a small increase of five-10 per cent in Dainik Jagran is a huge number, because of the substantial base it commands, so it will be difficult for other verticals to really compete with it.
Q. What are some of your focus areas for the year?
We will try to reinforce each brand further this year. Much of our expansion plans have been put in action already and now we have to focus in pushing the branding and readership development, and also investing energies in developing our presence in the new geographies that we are touching in terms of new brands. Dainik Jagran will continue to grow and we will keep adding numbers to it. But much of this also depends on how the economy plays, and on the dollar and newsprint pricing. If the US dollar continues at Rs 49-50, we will not be extremely aggressive, but if things start looking up and the economy starts settling down in terms of interest rates, home loans and such start coming down, it will kick-start the market once again. That will boost business overall, so there is a possibility that I may say today that we will not be extremely aggressive in 2012 but by July, we sense the market finally opening up, and we may think of doubling our pace.
Q. Is the advertising and subscription ratio moving in the right direction?
We have managed to increase Dainik Jagran’s cover price in many territories. It has resulted in an average per copy increase. This year also we expect cover prices to increase in some markets, which will further impact the average per copy. English newspapers have also increased cover pricing and we always price more than the English newspaper in many markets. So, circulation revenues will grow but we don’t believe that they will catch up with advertising revenues. I don’t personally believe in making the product so expensive that it will be difficult for a reader to pick it up. The idea is that the common man should not feel a pinch on his pocket while buying a newspaper.
Q. Last time when we spoke you said digital revenues are not in a hurry to come but the efforts to be present on the platform will be there. Is your digital strategy the same even now?
Yes, it will remain the same. We strongly believe that content will be distributed through digital platforms such as mobile, iPads and so on. Being present on digital platforms has become basic hygiene. But we have started looking into other avenues of digital as well. Post the change in our arrangement with Yahoo!, where our digital presence was only in partnership with them, we have now launched our website Jagran.com. I don’t want to get into whether and how revenues will come into digital right now. But we want to be prepared that when it happens, we are in a position to take advantage of it as well.
Q. From an industry standpoint, RSCI is likely to make some announcements soon. What are your expectations?
RSCI should help. We are expecting more transparency to come and marketers will get better quality of data, which will help them in planning, with more accountability. I do believe the industry will benefit more due to this.
Q. Pitch Madison Media Advertising Outlook 2012 puts print advertising revenues projected for 2012 at Rs 11,000 crore, including magazines. Please comment.
It should be around that figure. The industry is likely to grow at six-eight per cent, given the market conditions but, of course, our targets are likely to be double of that.
Q. Print has lost its place in terms of being the largest consumer of the ad pie. Do you think over a period of time, print revenue will become smaller in comparison with television and Internet?
At the end of the day, it’s the marketer’s call where he wants to put his branding – whether he wants to put his money in print or TV. But the way TV has fragmented, marketers will surely realise that their spend in print actually delivers. Marketers need delivery on-ground and they need response, and on that count, print will score higher any day. Television advertising overall is growing also because of the multiple platforms with so many channels launching, but the question is whether they are delivering? I don’t think so. There are maybe 50 television channels of any substance. Advertising on the rest is wasteful. Also, television can only take limited inventory. Print has many advantages on that count. There are shifts happening right now at the industry level. But at the end of the day, the question that I focus on is whether we are growing. And the answer is that we are.