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Going local: An idea whose time has come

By , agencyfaqs! | In | July 01, 2002
The shift of the big media houses to an age-old formula reflects the shifting advertising balance of power


FDI is just one part. The crux of the matter, especially for the print industry, for quite some time now has been: Where is the money? With advertising industry down, the print media is on a quest for new sources of revenue.

It is an issue that many publications are addressing in their own ways. While the Andhra Pradesh-based Eenadu group has aggressively wooed media planners pointing at the existence of the rural rich in a series of high profile advertisements, other papers have looked at the local advertiser. And that has meant local editions to increase the scope for local advertising.

The Mumbai based Rs 94-crore Mid-Day Multimedia Group has been aggressively targeting specific pockets of the city in its quest to increase readership and advertising. The latest in its Mid Day Metro project is the Chembur edition of Mid Day Metro. Chembur is a suburb of Mumbai, with a heavy concentration of South Indians, and has, in recent years, emerged as a busy commercial and residential area.

The idea? To tap into the enormous fount of advertising that local business, not even city specific, but relevant only in a four to five kilometre radius, can generate. And it is not only shops that advertise - there are coaching classes, swimming classes, workshops from painting to pottery, paying guest accommodation advertisements - indeed everything that makes a throbbing metropolis. With an advertising rate of Rs 100 per column centimetre against the group's flagship Mid Day's Rs 550 per cc, and a 50:50 ad to edit ratio, it is an attractive pot of money. It costs Rs 2.65 to produce a copy of Metro, which is distributed to about 20,000 homes in the locality. Says Arindam Mitra, director (operations) Mid Day Multimedia, "If you look at the revenue that is garnered by cable operators, that gives an indication of how large the market for local advertising is. The Metro project addresses geographic pockets in the city, but even with four editions, it is just the tip of the iceberg."

So is the local edition a new phenomena altogether? Ironically, no.

The idea of local newspapers, which address local concerns of a very narrow community is quite old, and an international phenomenon. Just to take one example, in Berlin, between 1915-1918, a monthly Hindi language paper was published for Indian prisoners of war in German hands. Mumbai too has a great tradition of the local newspapers. As far back as 1800 there were several dozen papers in the city - the hub of the British Indian empire on the West Coast - all in English by the English and for the English.

The city has a rich tradition of community papers too. Satellite towns like Panvel, Vashi, Nerul and others contribute to a whooping 42 local papers in Mumbai city. And many have interesting names, like In and Around Mumbai 59, a paper that takes its name from the Marol area postal code. In one way, the genesis of In and Around Mumbai 59 is an indicator of the potential of local advertising. The monthly eight-page magazine size newsletter was started by editor and publisher Philip George after he asked people near his house if they would like to read about local people and history, issues and events, services and products. They were and were also willing to shell out the money for small advertising. The paper started in March 1997. Other examples of community papers are The Adyar Times and the Anna Nagar Times in Chennai. The papers are free and they have an average of 16 pages, with an edit to advertising ration of 50:50.

But what is interesting is the shift of the big media houses into this lucrative area. On careful examination, the link between local advertising, and their need for money becomes clear. India's advertising industry saw the three slowest years in its advertising history since 1999, with growth falling to single digits, many media agencies closing down, and layoffs a matter of routine. That is when, the launch of local editions gained momentum.

Local advertising has grown to a Rs 3,600-crore industry today, clipping along with a growth rate of 15 per cent to 20 per cent. Compare that with the national advertising industry. This market is estimated at Rs 9,000 crore and is growing at 5 per cent to 7 per cent, down from its heyday in the mid-1990s, when, in the first flush of liberalisation, advertising boomed. Points out Katy Merchant, senior vice-president, IMRB, "It is the local edition that covers local events, the local sale and the local theatre. And that is what many readers are looking for. Recognising this is an absolute shift."

And the awakening of the big media houses reflected this. In 1997, the Mumbai edition of The Times of India had no suburb-specific supplements. Now it has seven. The Mid Day Metro project also started around the same time. "What has brought this change is the growth of an urban community that has its own needs and issues to put up, its own activities and people who makes news, and its own concerns and expressions. And, most importantly, the wealth that came after economic liberalisation. Earlier, mainstream newspapers had little space for them. But now, with disposable income on the rise, it is inevitable that big media companies would tap into this new pool of revenue," says Anup Sam Ninan, who is doing his doctorate in Sociology at New Delhi's Jawaharlal Nehru University.

So what is the potential? Huge, say analysts, concurring with Mitra's description of this segment as the "tip of the iceberg". And it is likely to expand in scope as literacy grows. According to the NRS 2002, between 1999 and 2002, the reader population grew from 75 million to 83 million - by 11 per cent - in the rural market, while the urban reader population grew from 89 million to 96 million, that is, by 8 per cent. And with India right now ranking among the lowest countries in the world as far as newspaper penetration is concerned, the demand for more local news in newly literate communities is bound to increase. © 2002 agencyfaqs!

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