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Why retailers love print advertising: Sanjay Gupta

By Sanjay Gupta , Spencer's Retail, New Delhi | In Media Publishing | May 11, 2010
Print media still has its appeal as far as tactical advertising is concerned as it allows for a focused geographic reach

While it is true that newspapers and magazines are facing some challenges in communicating with the younger folk, traditional print media still has its appeal as far as tactical advertising is concerned. It allows for a focused geographic reach, with more and more newspapers offering city splits where their distribution is restricted to select geographies within a city. This indicates a unique advantage for retailers.

First, a little background: India's nascent retail industry is fast catching up with the advertising expenditures of its relatively mature western counterparts. Typically, in the western markets, the retailers' advertising expenditures are 2-2.5 per cent of their turnover. In India, retail companies have already crossed this bar, with the average spend hovering around 5 per cent as retailers continue to build scale of operations.

With the growth of modern retail gathering pace, one can clearly see the difference in the marketing techniques of multi-brand retailers operating specifically in large formats such as supermarkets and hypermarkets, when compared to those of their western counterparts. Most industry experts attribute this to the increasing competitiveness, besides the growing attractiveness and adoption of modern retail formats by shoppers and the peculiarities of the Indian retail industry.

In India, there is little or no advertising that is aimed at building the brand, except those pursued by a few lifestyle brands and fashion retailers, as most of the efforts are directed towards communicating the value being offered. Increasingly, retailers believe that 'price' is the only differentiator and therefore, we see advertising promoting a 'price challenge' of sorts.

In India, there is a rush to attain pan-India scale and retail chains are going beyond the metros by penetrating into Tier II and Tier III towns and cities. A combination of the 'race' for scale and reach, coupled with offer-driven communication, results in Indian retailers resorting to tactical advertising campaigns. This is further accentuated because the retail trade is largely unorganised and the modern retailers have to fight with traditional players to get footfalls. Remember, at the end of the day, retail is a 'local' business.

If one takes the example of hypermarkets and supermarkets (including regional/one-city chains), all of them are visible in national/regional newspapers, sometimes carrying full page advertisements. Added to that is the double standard of the Indian consumer, who seeks upgradation in some categories (such as mobile phones, housing, automobiles and durables) and value in the others (grocery). They can be indulgent when shopping for the finest in specialty foods - and in the next minute, be extremely prudent and judicious when buying staples or vegetables, with a keen eye on prevailing market prices.

The key issue for any retailer, therefore, is to identify the 'upgrades' and 'value-focused' product categories, rationalise the product mix while maintaining healthy margins and chart out an advertising media mix accordingly.

With tactical advertising clearly scoring over brand advertising in the retail industry, the next logical step comes in determining the advertising media - electronic (including the power of mobile penetration through SMS) or print.

Newspapers can reach consumers without bothering, distracting or irritating them as pop-up Internet ads and loud, tasteless television and radio commercials often do. The other advantage of print is its credibility and readability of the 'fine print', especially since retailers have a plethora of offers and consumers tend to cherry pick between offers of competing retailers. As print can target very sharply, it can bring down spill over and the retailer has the ability to offer two different sets of offers across two different clusters within the same city.

Further, this medium is beginning to offer innovation in terms of placement, mastheads on the front page and other very creative solutions that almost suggest that the newspaper has been 'sponsored' for the day by the said advertiser. Granted that Internet advertising has an edge in cost per lead terms, it is print media that seems to deliver ads which are a destination, and not a distraction.

Finally, at a time when every marketing and advertising initiative needs to be justified from a business perspective, print media offers more credible and robust opportunities for evaluating its return on investment. One can monitor the publications that actually work for the brand and it becomes easier to determine which part of the advertising budget was a better investment, at what time and at what cost.

To conclude, this article is not about reselling the sensitivity, patience and consumer friendliness of newspaper ads to today's youth. Print media is here to stay and will continue to be a credible tool for tactical advertisers, publishers and readers. The younger media buyers today should at least recognise the challenge of standing out amid the tremendous ad clutter that exists today. Can they - or will they - wait for the consumer to opt in?

(The author is vice-president, Spencer's Retail)