The strong growth of digital media in India to Rs. 7,300 crore represented 12.7% of the total ad media spend of Rs. 57,485 crore in 2016 according to the Group M report released in February 2017. According to this report, digital has far overtaken outdoor advertising, which it reports as Rs. 2,732 crore or 4.7% of the total. (We believe that for various reasons, outdoor media spend is under-reported.) Nevertheless, television and print account for the largest portion of ad expenditure in 2016 with television at Rs. 27,074 crore (47.1%) and print advertising at Rs. 17,674 crore (30.07%)
Research from Group M, KPMG/ FICCI and from IppStar is roughly aligned and suggests that in 2016 newspapers generated approximately Rs 29,00 crore in overall revenues— including print and digital advertising and circulation. According to the KPMG/FICCI research, ad revenues for English language dailies in India grew 3.5% in 2016, compared with 7.1% for the now extremely competitive Hindi daily market and an even higher 8.7% for other regional language markets such as Malayalam, Bengali, Telugu, Tamil, Kannada, Marathi, Gujarati, Odia, and Assamese dailies. It is widely acknowledged that the newspaper revenue growth in vernacular papers is led by Hindi and Malayalam, and this is borne out roughly by our survey of the 50 fastest growing dailies as well.
Headroom for newspaper penetration
IppStar’s research of the Indian newspaper industry trends forecasts that while the overall population will grow in the five-year period to 2020 from 1.32 billion to 1.36 billion, the average annual growth in urban population will be 2.42% while basic literacy will increase from 73% to 80%. “Even speaking conservatively, daily newspaper penetration as a percentage of the population could grow from 9.5% to 10.9% in these five years. However, there is headroom for higher growth and one should still look at 15% newspaper penetration as the market potential which is only one fourth of the current cell phone penetration in the country,” says IppStar’s research analyst Purva Dwivedi.
Digital is here and now
Unlike in markets with more developed digital ecosystems, newspaper revenue streams in India have not yet collapsed in the face of the serious challenge from digital content channels. However, the rise of digital is inevitable and imminent. Industry experts estimate doubledigit growth in the annual number of smartphone users till 2020, by which time 28.8% of the country’s total population, or 393 million are expected to own smartphones. Thus, the threat of digital media and the opportunity to create and serve responsive and interactive news and other content is an important consideration for vernacular newspapers as well.
In spite of its large population, the federal Indian polity has more than 36 states and territories with distinct geographies, languages, scripts and customs. The diverse demographics including literacy, age, gender, economic and social status and outlook are extremely complex and make the job of any media marketing plan interesting if not difficult.
However, as there is more even economic growth across regions and also in smaller cities and the hinterland, the vernacular dailies with their highly local reach are an effective way of reaching more segmented markets. It is here that print revenues continue to grow, with newspapers specifically still serving as an effective way for large global brands to reach specific markets. At the same time, the regional vernacular dailies are gathering ad support from regional and local brands that the economy is generating.
The fragmented market and local brands
Regional brands are perceived to have a better understanding of local tastes and preferences, and are generally lower priced than the traditional national brands. It is estimated that there were 12,027 regional advertisers in 2016, an increase of 7% in comparison to 2015, according to Publicis Media’s media buying arm Starcom. In the first half of 2017, there were 6,916 regional brands that advertised aggressively with wide expectation of a significant improvement in the second half of the year, which includes the festive season. Other reasons include the hopes for a comeback from the downturns of demonetization in Q4 of 2016, and the de-stocking of consumer products in the months preceding the launch of GST on 1 July 2017.
Regional and local edible oil, milk, snack food, confectionery, tea, personal care and detergent brands continue to grow and have been aggressively advertising in vernacular dailies. A random sample of such brands across the country include edible oil brands Sona Sikka in Rajasthan, Gold Drop and Tirupati in South India, spice brand Pushp in Madhya Pradesh, personal care brand Roop Mantra in Himachal Pradesh, beverage brand Bovonto in Tamil Nadu, and Jayanti Cola in Rajasthan. Local and regional tea brands include Sapathi, Anokhi and Raja while many local snack brands as well as household detergents continue to grow in wider supply chains.
At the same time, local or Indian national brands increasingly dominate consumer preference in the country. Amongst the top ten consumer packaged brands in India, in terms of consumer reach only three are from global manufacturers while the remaining seven are Indian brands including Parle, Amul, Ghari, Britannia, Tata, Aavin and Nandini.
The 50 fastest growing or should we say least stagnating?
It is becoming difficult to find fast growth in the Indian newspaper industry at least in terms of numbers. Nevertheless, by looking at new editions, new plants and investments and other achievements in color quality and environment, we are able to get a sense of the change, development and motion in the market even if it is glacial.
The seven new entrants this year are all Indian language or vernacular newspapers who have made it to the ‘50 Fastest’ list taking into account increases in circulation, turnover, capex investments, new editions and more than ever their adaptation to digital channels. These seven include Andhra Jyothi in Telugu, Asomiya Khabor in Assamese, Navbharat in Hindi, Premiya in Odiya, Punya Nagari in Marathi, The Hindu in Tamil, and Uttarbanga Sambad in Bengali.
