A report on
MEDIA SPACE (Selling & Distribution)
Part B
In partial fulfillment of the
SDM course
Submitted by:
Group 10
Bhavik Leuva – 2016PGP093
Bijoy Roy Chowdhury – 2013IPM031
Kalaivani G – 2016PGP163
Keerthi Naidani – 2016PGP171
Sadhana P – 2016PGP329
Sanapala Venkata Sri Harsha – 2016PGP332
Suryansh Singal – 2013IPM099
Tanya Shah – 2013IPM101 INTRODUCTION:
In order to understand and evaluate the sales and distribution of the industry “Media Space”, the media conglomerate TIMES group has been chosen. The Times Group also called Bennett Coleman & Co. Ltd (BCCL) established in 1838 is India’s largest media conglomerate with a dominant presence across all media platforms and a footprint spanning the whole of Indian sub-continent. The flagship daily of the group - The Times of India – is today the largest English newspaper in the world with its sister publication – The Economic Times being world’s second-largest English business daily. TIMES group offers wide variety of products such as Publishing, Broadcasting, Radio, Entertainment, TIMES OOH and web portals, App.
A primary research was made on how the Media AD spaces were sold and distributed for the Times group across all its product categories. This primarily involves Advertisement agencies acting between the Media house and the clients. The ads are classified across various verticals such as Education, services, CIS, Premium, Contact, Obituary and Personal, Business, Shopping, Matrimonial, Packages, Property, Automobile, Travel, Computers, Tender and Public notices and appointmnets.
PUBLISHING: Publishing refers to the print media, which includes Times of India, Economic Times, Financial Times, Maharashtra Times and Navbharat Times. Typically a newspaper is sold at Rs.3 - Rs.6. However the printing costs come up to around Rs.10 - Rs.12 per newspaper. This gap is sourced through advertisements. Major part of their revenues is earned from advertising and a huge amount of money is generated. The various kinds of advertisements featured in print media are Promotional Ads and Statutory Ads which contribute to the major reach of the content. Promotional Ad aims at informing the prospects about special discounts, sales or schemes. Government bodies and college authorities in the case of admission process place statutory Ads. One of the biggest threats to ads in newspapers is the huge cost incurred in publication and not much of targeting achieved.
BROADCASTING: Broadcasting involves Television and Radio. Times Now is a 24-hour English news channel in India owned and operated by the Times Group. The other TV channels under the Times Network include ET Now, Zoom, Movies Now, Romedy Now, and Magicbricks Now. Radio Mirchi is a nationwide network of private FM radio stations in India. Entertainment Network India Ltd (ENIL) owns it, which is one of the subsidiaries of The Times Group. The ads featured on Televisions are mostly brand promotional Ads. It has been proven that Ads on Times Now has increased a product's brand awareness and also has created business profits, sales and numerous other positives for a brand. The cost of Card rate is Rs. 388 per 10 sec. Advertising in Radio Mirchi has been one of the best mediums to reach your target audience effectively. The cost of ads depends on the duration of ads and the time of airing. The Ads featured focuses on building a brand identity through on-air Sponsorship. Radio sponsorships generate brand awareness through association with a radio station’s programmes. A strong positive association is built in the listener's mind, between the brand name and the attributes of the sponsored programme.
TIMES OOH: It is an outdoor advertising Media which provides information and pricing for all the Out-Of- Home (OOH) Advertising needs. Such innovative advertisements are through billboards and have caught the reach of people in significant numbers. Majorly established in metros, this product has huge presence in airports. The Ads focus on Brand building and recall.
TOI APP: The App functions as a network of connected reporters throughout the country that keep on updating news throughout the day. The Ads are taken care of by the Times mobile and Internet team. The Ads featured are flash of sale and branding.
DISTRIBUTION SYSTEM OF TOI Media
Client who want to
display the ad in a media space
Advertising agency
Media - Times Group
Client:
The client could be anyone who wants to place an advertisement in any form of media space like newspaper, supplementary editions of the newspapers, mobile app, hoarding boards. They could directly contact the media space companies or through an agency which has a tie-up with the media company.
Advertising agency:
Ad agencies form the bridge between Times Of India publication/ media house and the clients. TOI has around of 80-90 offices across the country to look after these advertising space sales, content writing, editorial and circulation.
At indore, TOI have tie ups with 12 advertising companies who purchase the advertising space in bulk, out of which 6 to 8 forms a major chunk. These advertising companies in return sell the space to organizations and institutions. Major discounts are provided to the advertising companies if they take a deal for a long term period.
List of major ad agencies: 1. Vigilance 2. Ankit agency 3. Deepak agency 4. Lalit agency 5. Puple focus 6. Anil Advertising
Times group:
The major portion of any media company comes from advertisement. So it is important to price and promote that division of the company properly. Also agencies and clients will look for regular incentives and various trade promotions which help in customer retention.
Pricing – It works on the concept of “Everything that is being promoted is charged”
Ad price varies according to coverage, city, circulation, location of the ad in the newspaper and size of the ad in sq.cm.
If the client decides the placing of the ad in the paper, it incurs additional cost to the client. For example, few of the innovation ads given by Apple will be charged extra premium.
Ads placed on the 1st, 3rd, 5th and the last page of the newspaper are relatively costlier when compared to other pages. Ads placed in 1st page costs 50% higher than the regular page and the ad placed in 3rd page costs 25% higher than the regular page.
Example :
If a client want to place a 12*20 cm ad in the any page of the Bombay edition newspaper, it costs him Rs.2000.
Price comparisons: There are lot of fluctuations at the time of finalizing the deal with the agency. Times group has software called Price Wise which tells about various metrics such as lowest value, average value that can be given to the agencies with the data plugged in to it.
Medianet: The group has a division called Medianet, complete with a rate card for the sale of news. It means that the sale of news is different and distinct from paid advertisements, advertorials or special supplements, all of which are clearly identified as 'sponsored features,' while paid news is not. Each of its paid news items carries the words 'Medianet promotions' at the bottom. Any news on a supplementary edition like Indore times or Bombay times about a celebrity/product is a paid news which is been paid either by the celebrity or by the PR agency associated with that celebrity (in case of international ones).
Also, the Movies connection section which lists the movies screened in various multiplexes is a padi section which comes around 40 to 50 lakhs/yr/channel, whereas the movie ratings section is free.
Alive – Alive is augmented reality app by Times group by which we can search visually instead of a voice or text search. It allows you to scan any image and gives the relevant news in the app. To display a news in alive app, clients has to pay 10% more than the regular ad.
Incentives and promotions:
TOI gives regular incentives over and above the regular margin of 15% to ad agencies to motivate them to increase the sales. For example, if the ad agency increases the sales to 20% more, they will get additional 10 to 15% percent on that 20%.
Times group also provides bundling option to combine newspaper ad with Radio ad or Times OOH or any other sister concern of times group. In Indore, Times of India and Times OOH has given a bundling option to display ads for silver coin atta of Sanghvi Foods.
Improving quality of product and extending the product range. More advertisements through the medium of TV, Radio, Internet and social campaigns.
Launch of social campaign “Young India” focussing on youth of the country.
TOI came up with combo offers for both buyers and advertisers. TOI once came up with a low subscription rate of 250rs per year. It allowed the brand to build and maintain a consistent dialogue with vendors, which helps to drive sales.
Also TOI in collaboration with HDFC launched Times Card
Circulation and Margins:
The circulation of the newspaper throughout the country is attached in the excel.
circulation.xlsx
Advertising companies get a profit margin of 15% on an average. The pricing schemes and the ad-ons for major cities in the country is given below.
Classified Classified Display Run on Line (ROL) Advt Single Column Advt Edition Base Add on Base EL EL Centre Base Add on Add on Add on Ahmedabad The Times Of India - Ahmedabad 268 142 482 96 376 75 Ahmedabad Ahmedabad Times 161 85 284 57 111 22 Ahmedabad Baroda Times 106 42 212 42 95 19 Ahmedabad Surat Times 35 20 54 11 32 6 Bangalore The Times Of India - Bangalore 710 639 1550 310 1395 279 Bhopal The Times Of India - Madhya 70 55 220 44 165 33 Pradesh Bhopal The Times Of India – Indore 40 30 Chandigarh Times Of Chandigarh City 30 15 120 24 30 6 Chennai The Times Of India – Chennai 460 276 950 190 599 120 Chennai The Times Of India - Coimbatore 160 96 400 80 240 48 Cochin The Times Of India – Kerala 80 60 200 40 200 40 Delhi The Times Of India – Delhi 1100 990 4200 840 840 168 Hyderabad The Times Of India - Hyderabad 250 200 350 70 350 70 Kolkata The Times Of India – Kolkata 380 220 1325 265 649 130 Mumbai The Times Of India – Mumbai 725 703 2300 460 2208 442 Mumbai Times Of India - Navi Mumbai 70 40 200 40 100 20 Pune The Times Of India – Pune 230 184 650 130 585 117
Below is the screenshot of different ad-rates charged by Times group which is shared by Times personnel
Sales Management@TIMES
Currently, there exists a team of 6 salespersons and 1 back office personnel. The team structure@TOI is divided both horizontally & vertically: a) The sales team at TOI is divided vertical wise, each vertical having a different category. For ex: some people work in the retail vertical dealing with the retail sector’s requirement for media space. There are other verticals like government, political etc. b) Each and every salesperson has to not only report to his/her vertical head, but also to the person who is in charge of the overall sales revenue of the company. This official who heads the sales department fits into the horizontal structure of the company which comprises of different heads of different departments. For ex: marketing head, accounts head.
Sales Management Hierarchy
Person in charge of the sales division in Indore, reports to a person who sits in the Bhopal office and is in charge of the total sales of Madhya Pradesh and Chhattisgarh region. TOI has a few sister-concerns which it uses to provide bundling options to their customers: a. TimesOOH – street furnishing, transit advertising and airport advertising. Under street furnishing, the organization has publicizing contract for roughly 1400 bus queue shelters spread over South and West Mumbai, 200 BQS each in Bengaluru and Hyderabad. The organization additionally works billboards in Mumbai, Delhi, Bengaluru, Hyderabad and Kolkata. Under transit advertising, the organization has selective contract to promote on Blue line from Dwarka to Indraprastha metro station (with the exception of Rajiv Chowk Station). The organization additionally has exclusive promoting contract for recently developed terminal 3 of IGI Airport Delhi and CS International Airport Mumbai. The organization additionally works Digital screens at Delhi Noida Delhi Expressway. b. Radio Mirchi – radio partner c. Femina Miss India- national beauty pageant in India that annually selects contestants who would represent India in Miss World d. Filmfare Awards – presented annually by the Times group
Typically, a news paper is sold at Rs.3 - Rs.6 and the printing costs are around Rs.10 - Rs.12. Major part of the sales revenue comes from Advertisements. Advertising costs are roughly Rs.2000 per square cm. Apart from the Rs.2000 charge per sq. cm, an additional charge is also supposed to be paid as per the requirement of the page. There is a price difference even for the front page across MP and across India. Charging costs are different though. Different rates for different categories and sections across different regions can be found on the websites – adrate.timesofindia.com or timesofindia.releasemyad.com
A sample display of the website and the cost of matrimonial ad in indore TOI is shown below as screenshots.
These advertising companies in return sell the space to other organizations and institutions. TOI has around 60 offices across the country to look after these advertising space sales. In case of digital advertisements, the advertisers who pay for some space can also use data analytics to gather stats related to the number of views of their Ad, number of clicks etc. Credit policy – Ad agencies certified by the INS (Indian Newspaper Society) are entitled to a credit period of 2 months. Other agencies which submit bank guarantee are provided credit for 1 month again depending on the amount they have deposited as the guarantee. In all the other cases, the company has very strict credit policies unlike its competitors.
In contemporary times the sales growth of print media is declining and has fallen from double-digits to single digits roughly 6-8%. Whereas at the same time the sales growth of OOH digital has been in double digits. Also there are several costs related to print like distribution channel costs, targeting costs etc. These days agencies are focussing more towards digital space for advertisements as it is less costly and can be targeted on a wider ray of audience.
How do the sales and management function in the company?
Major chunk of their revenues is generated from advertisements and sales of advertisement space in the newspaper is one of the most vital instrument for cash flows.
Sales of ad Space:
At Indore, the company uses network of advertising companies to sell their ad space. The company has tie ups with 10-12 advertising companies who purchase the advertising space in bulk. These advertising companies in return sell the space to organizations and institutions. Advertising companies get a cut of 15% for servicing any client. Major discounts are provided to the advertising companies if they take a deal forlong period. TOI has around of 80-90 offices across the country to look after these advertising space sales- content writing, editorial and circulation.Advertising costs are Rs.2000 per square cm. The pricing is also based on the city and on which page you want your advertisements.
A simple diagram of how the sales cycle takes place is shown below.
Times of India
Ad Agencies (the intermediary, getting fixed Advertiser - comission of The consumer 15%) (pays 2000rs/ sq cm)
Also, there is another online channel where the intermediary is a website and ad space is booked online. Website like bookmyad.com provides platform for this activity.
Comparison with competitors:
Times OOH has no major competitor in airport billboard advertising according to Times group officials. However Times of India newspaper group has many competitor and Dainik Bhaskar, though is a hindi newspaper, is one major competitor for TOI in Indore.
TOI is using advertising agencies, and a website, called releasemyad.com. Dainik Bhaskar (DB) also uses the same. Dainik Bhaskar only allows placing classifieds via this site. Due to huge difference in circulation numbers (251836 vs 26195) DB charges much more (see screenshots.) Distribution of Dainik Bhaskar : The average price of a single copy of Dainik Bhaskar is INR 2.50. The hawker has a margin of 25%, and the distributor has a margin of 13.33% which means the hawker buys a single copy for INR 1.875 and the distributor buys it for INR 1.625. The hawker thus has a share of 25-30% and the distributor has a 35% share, leaving the rest for the company.
Marketing Strategy used by Dainik Bhaskar: Making a connect with the customers with their content, they go for a pull strategy, no promotions or freebies are given per say, that is also because they already have a strong presence as compared to the competitors1 Engaging customers via various events like “Abhivyakti”
1 Market Share (by number of copies) (In the interview with Mr. Ashish Yadav) Dainik Bhaskar: 3,00,000 copies (66.66%) | Patrika: 1,00,000 copies(22.22%) | Nayidunia: 50,000 copies (11.11%)
Name of website Monthly page views Cost per 2 lakh Monthly unique visitors Alexa India impressions rank
Timesofindia.com 250 Million Rs.12,500 15 Million 380 Hindustantimes.com 45 Million Rs 10,000 12 Million 100 Indianexpress.com 90 Million Rs 15,000 18 Million 76
Recommendations:
Eventhough the firm gives options to bundle, there is not much emphasis on it. The loyal customer base can be increased by emphasizing more on bundling option as Times group has its foot on almost every type of media. Moreover, it will increase the sales and growth of new start-ups like Times OOH and ultimately have a positive impact on the top line and bottom line of the company. The company should focus more on Ads through its digital platforms due to the growing penetration of internet. Also, this leads to cost reduction compared to print media and better targeting of customers. The company should also focus more on its relationship with Advertisement agencies which connects both media house and clients. Incentives should be given based on the ads provided by them and their expected reach.
We did not get any data on the financials of the company, but we think that the company can amend its credit policy and adjust it strategically, so as to attract small agencies/individuals too. Times OOH was one of the leading brands in 2010 in the country and even now its growing rapidly. It has a huge potential in Indore city as well. The company should increase the presence of Times OOH (Out-of-Home services) in Indore. The company can look for other distribution channel other than the existing ones, the formal bus depot system, which is also being used by major competitors. New agreements with the informal vendors can be established.
References:
http://timesofindia.releasemyad.com/tariff/Times-of-India-Display-Advertisement http://adrates.timesofindia.com/Indexpage_Classified.html Information from Industry visit and Times group people.