How often do we pause and ponder about industry issues that have a bearing beyond just our rigmaroles? Share insights that can further the common understanding? Or, at the very least, point at things that need to be set right.
View Point - an exchange4media platform, will fill this void and become a source of understanding, action and perhaps some inspiration.
Phadnis comes from Planning and Strategy background, having worked with Starcom, HTA and Rediffussion. Phadnis joined TV Audience Measurement [TAM] as Director, S-Group in early 2002 quitting Starcom as Media Director.
Atul Phadnis, Director - S-Group, TAM
Media Planning & Equity Investments
Do Media Planners have anything in common with Equity Investors? Well, Media planning professionals, it can be argued, encounter situations just as tricky as those encountered by equity research professionals. That's because, while those in media planning have to understand media behavior to advise clients on which channels and programs to advertise on, those dealing in equities have to understand the stock market to recommend to their clients which stocks they should be buying or selling. In either case, you would find the issues just as challenging… zeroing in on the best deals, predicting what will happen in the future and accurately plotting future trends.
Media Planners look at past trends and predict what kind of viewerships will occur in the future. It used to be easier when there were fewer channels. However, the proliferation continues with the latest channel tally within the TAM viewership database already at 178 channels! Add to this the fact that viewers are becoming increasingly fidgety. The moment a September 11 happens, all viewership trends seem to change. When there is a cricket tournament happening, there is 'disturbance' in normal viewing trends that affects performance of even top channels.
The propagation of Remote-Control sets or frequent changes by channels with newer programs is also not helping viewership stability. A rival channel gets a celebrity show in a prime slot and viewership for the other two channels vibrates violently. And then there are factors, which just cannot be predicted. How in the world can anyone predict viewership fluctuations caused by randomness of Electricity availability for most of viewing hours in Uttar Pradesh? Or the fact that viewerships would go up in Ahmedabad during daytime due to rioting outside? In short, the variables that affect viewership have multiplied dramatically leading to extreme volatility in viewer behavior. And here is where the TV viewing universe starts revealing an uncanny resemblance to the Financial Markets.
Taking the same thought forward, lets look at hardcore equity terminology and its parallels in Media and TV Planning: -
Sensex: This is a broad indicator that signifies the relative position of the stock market across multiple sectors at a given point. The equivalent term in TV Planning is the 'Any TV Viewership', which signifies the Total TV viewed on a particular day/ week. As Planners who follow this number from week-to-week would know, it indicates whether TV viewerships are stable or increasing due to the Cricketing season or dipping due to vacations or exam season. It really signals the 'flavor' of TV viewership… just like the Sensex gives you a feel of the stock market in that period.
Debt Funds, Equity Funds and ICE Stocks: One can equate these concepts with Mass Channels versus Specialist Channels. In investor circles, Debt is supposed to be the safe choice and Equity, the riskier one. Debt offers assured returns while Equity is relatively more volatile. Same is the case with planning Television. The mass entertainment channels viz. Sony, Star Plus, Zee TV usually are regarded as safe, assured returns, low risk (Debt Funds). However, specialist channels (Music, Sports, News, etc) are regarded as high risk - high return propositions, as viewerships are quite volatile within these. You could gain dramatically high returns or sometimes lose heavily. And just as investors keep reviewing the Debt versus Equity mix in their portfolio, advertisers keep revisiting the Mass channels versus Niche mix in their TV plans. In fact, just as ICE stocks are even more risky within Equities, News and Sports are the more volatile options within Specialist channels (more than Music, Infotainment). So the swings and oscillations in these viewerships force the advertiser to make a choice… does he still pick up these specialist channels and hope for an upswing thereby making himself a fortune or would he burn his fingers if he depended too much on them. In this respect, the risk that an advertiser will inherit will be exactly similar to the way an equity investor will assess his own risk due to the exposure to ICE stocks in his portfolio.
Market Sentiment: The Financial Markets are not always driven by all logic and rationale. There is also a strong, underlying Market Sentiment, which is also the case with viewerships. The 'mood of the public' is too compelling a factor to ignore. Yesterday they wanted mythologies… today a game show and tomorrow perhaps family dramas. Consider this… in 2001 all Entertainment Channels had mythologies running very heavily as that was found to have good viewerships. So much so that 38% of telecast time was blocked for mythos and religious programs. But the viewer turned towards News, Game shows and Comedies and dumped mythos. The 38% share of time garnered only 5% share of viewers… a hugely inefficient ROI!
Predictions: The most intriguing part about both professions! How does one correctly predict a phenomenon like the Sensex? Ditto with TV viewerships. I have seen statistical, econometric and mathematical models on both and yet there is only so far that they can go. Once I had a Financial Services advertiser as a client, who insisted that I predict exactly how many viewers would see his commercial in the future based on past performance of the programs that he was buying into. And to top that, we used to buy a lot of News and Sports Channels (the ICE stock in TV Planning). I told him that I could predict within a range, say ±10%, but could not guarantee an exact figure. When he kept pushing me, I asked him to run a test. If he could accurately predict the Sensex for the next month as well as the value of the ICE stocks based on past performance, I would pick up his challenge to accurately predict viewerships. He immediately got the message and agreed to look at a range! Fact of the matter is that viewerships are a function of a lot of other factors beyond habit alone. And upswings and downswings can occur due to a host of factors such as topical events like cricket and film awards, events, mood of the audience, electricity unavailability, exam season, vacations, etc.
Cyclical Stocks: Just as some sectors or stocks on the Stock Exchange are cyclical with typical landscapes of 'mountains and valleys', so are some of the phenomena in TV viewerships. For instance, the viewership for TV itself is not the same level across the year. It falls during exam season, falls further during vacation months and then picks up to peak during festive.
Mutual Funds: In investor lingo this represents an instrument where the risk has been broadbased through wider spreading of the portfolio. The parallels in the TV Planning industry are - RODP (Run of DayPart) Deals or Network Deals. In both cases, the objective is to hedge your bets and get more viewers, reducing your risk whether it's across a wide time-band in an RODP deal or multiple channels in the case of Network deals.
Portfolio Watch: Portfolio managers keep a watch on their portfolio and indicate 'buy', 'sell' or 'hold' recommendations depending on market conditions. Likewise for media planners… who have to keep a track of how viewerships are changing to make necessary changes in their TV plans. And while investors look at the Stock Ticker on CNBC, media planners look at the ratings system to alter their decisions.
As you can see… making money on the Stock Market is just as easy or difficult as buying advertising time on Television! It might not be a bad idea for some of the best planners to try their luck on equities