Dailies in some languages seem to have weathered the slowdown better than those in others. Metro-centric newspapers have been hurt, while those in smaller towns have managed quite well
Things are not always the way they seem. The daily print business was severely buffeted by the economic storm that hit India beginning October 2008. But halfway through calendar year 2009 based on data till June it is becoming clear that not all parts of India were hit in the same way.
The topline findings according to AdEx India (a division of TAM Media Research) show that dailies in English, Malayalam and Bengali have lost the most in terms of ad volume (Telugu's figures look the worst, but that's another story). The languages that continued to record positive volume growth in each of the three quarters beginning October last year were Hindi and Kannada.
In the first quarter of 2009, Kannada again recorded the highest volume growth over the same period last year with 18 per cent. This was followed by Oriya dailies (12 per cent growth) and Hindi newspapers (9 per cent).
In the second quarter of this year, April-June 2009, Hindi and Gujarati tied for the top spot, each recording an ad volume growth of 13 per cent. What explains the spurt in advertising in the Gujarati press, especially in the last quarter?
Kotnala points out that the movement of advertisers towards Tier-II and Tier-III cities had been going on for some time. "During the slowdown it became an established fact," he says. "This made bigger national-level brands far more conscious of the need to invest in our markets."
It is politics
The fact that consumer markets in smaller towns were less affected probably explains why the biggest of them all, Hindi, showed positive growth throughout these three quarters. Its growth in the most recent quarter was undoubtedly helped by the parliamentary elections. After all, of the 543 parliamentary seats that went to the polls, more than half lay in the Hindi-speaking states. According to Anamika Mehta, chief operating officer, Lodestar Universal, the two major national parties, the Congress and the Bharatiya Janata Party, had shifted most of their spends to television from the English press. "The parties know by now where their voter is coming from. Not many of the English press readers form the vote bank. So regional parties went along with Hindi and other regional languages," explains Mehta.
Elections take us to the performance of the Telugu press, which, on the face of it, presents the gloomiest picture of them all. According to AdEx figures, the Telugu dailies have been recording negative ad volume growth year on year all the way since January-March 2008 – and have continued to do so for six quarters continuously.
The negative growth in Telugu may not be for real, thinks R S Suriyanarayanan, media director, Lintas Media Group. That is because AdEx India doesn't yet track the latest Telugu daily entrant, Sakshi, which was launched in March 2008 and now has 20 editions.
The AdEx data is based to a large extent on the performance of the long–time leader in Andhra Pradesh, Eenadu, the ad volume in which has fallen by 24 per cent in the first half of 2009. This explains why the volume in Telugu dailies is down by 22 per cent. Adds KRP Reddy, director, advertising and marketing, Sakshi, "The general elections, which were spread over 75 days, have contributed much towards the positive growth of circulation and ad revenue during this time."
Coincidentally, in Tamil Nadu, AdEx doesn't track Dinakaran, an old Tamil daily, which was bought by the Sun TV network in 2006. Since Sun has close ties with the ruling Dravida Munnetra Kazhagam (DMK), Dinakaran presumably gained in ad volumes - especially political - during the elections. This has not been captured in the data for the period under survey.
What is surprising, however, is that the ad volume in Malayalam dailies dropped by 6 per cent. This is especially odd because as Suriyanarayanan of Lintas points out, Kerala is predominantly a two-newspaper state with Malayala Manorama and Mathrubhumi as the main contenders. Advertisers, therefore, have tended to gravitate towards the two biggies to save on costs.
Marathi and Bengali, too, have seen negative growth of three per cent and five per cent, respectively, during January-June 2009 compared to the corresponding period last year. It is the metros that played spoilsport in both cases. "Lokmat's national billings from markets like Delhi, Mumbai, Kolkata and Bengaluru got impacted," says Jwalant Swaroop, director, advertising and business development, Lokmat Group, adding, "however, the billings from the local markets are completely insulated by any symptom of the slowdown."
Mehta of Lodestar explains that the "biggest reason for the gain in the regional press - besides elections - has been narrow-casting and micro-targeting by advertisers. During the slowdown, advertisers targeted one state at a time to minimise the spill-over."
Swaroop of Lokmat feels that the Indian Premier League (IPL), too played a spoiler for print budgets and impacted the overall national market for print business adversely. "Roughly, close to Rs 400 crore went to TV during the IPL. Much of it could have come to the print media. Unlike in 2008, when about Rs 600 crore went to TV advertising during the event, advertisers, thin on cash this year, could not spare any for print," he says.
Among states, Tamil Nadu attracted the most, at 15 per cent of the total spend on education. Uttar Pradesh and Maharashtra followed with shares of 11 per cent and 10 per cent respectively. According to Sunil Mutreja, president, Amar Ujala, "There are about 200 engineering colleges in Uttar Pradesh alone, all wooing students from smaller towns where the language press is dominant. That is true, particularly, for the Hindi speaking markets. This was a loss for the English press. However, down South, the education sector was already using the regional press."
Meanwhile, the foreign institutes that advertised in the English press stayed away because of news of racist attacks on students in countries such as Australia. "Both Australia and New Zealand woo a large chunk of Indian students every year," says Mutreja.
It could have been worse
The English press has seen ad volumes decline in each of the last three quarters – with year on year declines of nine per cent, five per cent and 10 per cent. Within English, The Times of India saw ad volume drop by more than 15 per cent, year on year, during January-June 2009. In contrast, the volume of advertising in Hindustan Times grew by four per cent during the same period.
Education apart, slower advertising by the real estate, financial products and automobile sectors hurt the English press. Car companies used the Indian language press to focus on retail advertising at the cost of corporate communication, which is partial to metro-centric English dailies.
January-March is a hot season for advertising financial products but the tempo was subdued this time. As everyone knows, with home buyers staying away and speculators disappearing, real estate advertising in the English dailies of Delhi, Mumbai, Bengaluru and Chennai have evaporated. Some media buyers feel that had the English press not offered discounts, the numbers could have been worse. They believe that while Hindi press offered discounts of up to 10 per cent, English dailies offered discounts of up to 30 per cent. "Besides discounting on ad-rate cards, there were offers given by the English press such as - get three full pages for the rate of three half pages," says Suriyanarayanan.
Mehta of Lodestar, however, has an opposite point of view. She feels that the price-offs were not real as "the discounting was done after hiking the ad-rate cards. That is one major reason, why the English press couldn't get the volumes, in spite of discounting".
As for the future, everyone is certain that the upturn has begun and things can only get better. But the memories of the past nine months will certainly impact the way in which the press views expansion in the future.