Cheap Ad, Cheif Trade
Just a child then, when television broadcasting had begun in a makeshift studio at Akashvani Bhavan in New Delhi. A low power transmitter and 21 television sets were used as foundation stone for this globalize television broadcasting in 1959. Really, it is a great achievement for those who had witnessed that particular occasion. Bhaskar Ghose, former Information and Broadcasting Secretary shared the joy of that moment, “images of a gramophone record were being shown on television as the music blared away.” (Kohli 2003, p. 59) That gramophone picture and fantastic music became a landmark for Indian television broadcasting. People got more than enough what they have visualized as television before.
A new appliance entered into our periphery with its uncommon characteristics. Have you ever thought about the family members of a newborn baby? Every day and every moment, they are anticipating some changes in their child. Like that, we were expecting for new significant changes in television broadcasting.
The journey from 21 television sets to 80 million has been marked by many milestones: Regional Kendras; DD metro; satellite transmission; and cable broadcasting among others. In 1976, television broadcasting was ‘de-linked’ from All India Radio (AIR) with a new appropriate synonym for distant vision (i.e. Doordarshan). As a public service broadcaster, it was also claimed as an ‘advertisement-free’ electronic media. The revenues for Doordarshan were funded through a combination of television licenses and allocation from the annual budget. But the need of advertising revenue was felt by DD only after the telecast of first commercial on 1st January, 1976. Though the advent of commercial could fulfill only 1% of Doordarshan’s budget, however later advertisements become the only major source of revenue for Doordarshan.
Cable Television Industry
Cable has grown from an apartment connected together in 1980s to coverage of nearly 42 million households in India. During the last decade, the cable network mushroomed as an industry. There are about 280 channels that beam their signal over India. Generally the MSOs are delivered 80 channels (31 are pay channels and 49 free-to-air channels) to the viewers. Gradually the large broadcasters or cable companies stepped into this business as multi-system operator (MSO). They had the capacity to set up a large control room and subscribe maximum number of pay channels.
Now the cable industry is fragmented with over 40,000 cable operators. These cable operators are controlled by MSOs. Some major MSOs in India are Siticable, IndusInd Media, InCable Net, Hathway Cables, Sun TV and RPG Netcom. They are not only controlling the four metropolitan cities but have also covered some major cities in India. Siticable has the highest market share (5.4 million) of Indian Cable industry while IndusInd Media has its subscription base of four million homes.
Multi-system operators (MSOs) are backed by large corporations to invest money in this business.
Siticable is a joint venture between Zee TV and Rupert Murdoch’s News Television. InCable Net is managed by the Hinduja group; property baron Rajan Raheja’s Hathway Cables has come out of nowhere to become a powerhouse over the last couple of years; the most dominant cable force in south India, Sumangli Cable Vision is run by southern media baron Kalanithi Maran; and RPG Netcom is promoted by the RPG group, who holds sway over West Bengal. This is just like any other business. Think of MSOs as a wholesaler of the signal while the small cable operators (SCOs) are the retailers of the trade.
Obviously, these small cable operators have a control over the viewers. They collect subscription fee from the cable home every month. Barely 15-20 percent of every subscriber’s share goes to multi-system operator. Though, this monthly cable charges vary from place to place, the MSO’s share is almost equal everywhere. The multi system operators (MSOs) know that it is very tedious task for them to touch the threshold of the last mile. So, they don’t have any direct control over the cable homes. But in some cities like Bhubaneswar and Trivandrum, the MSOs have controlled the cable homes directly.
Let us take an average of Rs. 100 per subscriber per month, India’s 61 odd million cable and satellite households shell out a cumulative Rs. 61 billion. This is one major revenue stream for the cable operator/MSO. After launching of pay channels, they are looking for any other source of revenue to get more profit in this trade. If you consider the structure and the way revenues flow through it, then the cable industry is just like a pyramid. The satellite channel broadcasters are up-linking the signal from their earth stations and these signals are captured by the multi system operators. The small cable operator (SCO) distributes the feed in his territory which covers between 200 and 300 households of its neighborhood. The main aim for cable connection is to get clear reception and enjoy matinee and night show cinemas, which was telecast in the cable channels.
These cable channels belong to MSOs like SitiCinema belongs to Siticable, CVO belongs to InCable and C-News belongs to Hathway. In small towns, the small cable operators (SCOs) also have their own channel in which they telecast Hindi movies, regional movies, songs, religious discourses, fairs, community games and regional news. The cable operator has all type of control over these channels. If any blockbuster movie is to be telecast in cable channel, they have given a prior notice to their viewers about the timing of the movie. Sometimes, they also use this channel for some statutory warning (pay your monthly fee on time; else without notice your home will be disconnected from the network.)
Some local advertisers were interested to show their messages as scroll item in the bottom of the television screen. Instead of advertisement tariff, they pay very less amount to the cable operator for their service. At the beginning, they have accepted the money as an extra income. However, son they got a positive response from their consumers. Gradually, this became another growing stream of revenues, which so far has gone unnoticed.
From scroll item to message plate, from animated to full-fledged television ad, the cable ad have passed through various stages of growth. As we know, television is one of the most expensive and effective media for mass advertising. If you are booking for a television slot, do not forget that it is very expensive. For a prime time 10-second commercial in a national television channel will cost several thousands of rupees. So, television advertisements are out of reach for most small and medium sized businesses.
As far as small business is concerned, it has its own target consumers and those consumers are confined to a particular geographical area. Television advertisement lacks the ability to restrict your advertisement to closely target audience. Sometimes the marketer feels that advertisement is the only way to enhance the sale. Instead of choosing a proper channel, the marketer advertises in different slots of different programmes in different channels. Many times, the investment may not be very productive as per your expectations because thousands of people may not be interested in your product so they may skip your advertisement.
The taste and choice of the consumers in the developing countries are more vulnerable to that of developed countries. After globalization, the multinational companies entered the market with different promotional activities. Advertising counted as a major activity in which local brands had to face stiff competition with their multinational counterparts. Even the best local product may not survive in the market unless it is advertised. On the one hand, they have to advertise their product to survive in the competitive market. On the other hand they have to choose a media which touches the grass root level.
Cable TV provides a solution, especially for small business. Cable TV advertisements tend to be less expensive, even though their audience is huge. Almost half of all Indian homes subscribe to cable. In a research it is found that cable’s subscribers watch more television and belong to higher income groups. Cable also has the ability to send your commercials to specific parts of town and neighborhoods. If you have a product or service that can be visually demonstrated, cable television can work wonders.
Before cable television the local advertisers have very less opportunities to advertise for their business. In small towns, they were distributing some leaflets or advertised in the local print media. In some cases, they did not get the proper channel for advertisement. I spoke to a small marketer about cable advertising. He expressed that generally in two situations they prefer to advertise.
(1) When they want to create awareness about the shop or product.
(2) Whenever they are offering any discount/rebate, they are heading towards advertising. Before cable advertising, they used outdoor advertising (leaflets, hoardings, etc.) for the purpose.
After advent of cable advertising, they are spending more revenue in this channel due to instant result. Sometimes, after a few minutes of telecasting the ad in cable television, the customers rush to shop. Though, they have a limited budget for the advertisement, they take every step in a careful and calculative way because it counts the success and failure of their business. Let’s have a glance on overall advertising industry in India.
India has one of the lowest advertising spends to the GDP ratios in the world. If you compare with developed economies – UK (1%), Germany (0.8%), France (0.6%), Japan (1.1%) – as well as developing economies – Latin America (1.2%) and China (0.6%), the ratio of advertising expenditure to nominal GDP in India is about 0.4%. On the advertising front, consultancy firm KPMG estimates that the overall advertising pie was Rs 118 billion in 2004. Press advertisements took a share of 48% followed by television with a share of 41%. Radio advertising, outdoor advertising and cinema advertising has their respective share 3%, 7% and 1% in the advertising revenue. India has almost 108.2 million television homes with comparison to 213.1 million total homes. Out of these, almost 61 m homes have cable connections. The last few years have witnessed a conscious shift of advertising revenue. Indian companies spent a total of Rs 48.5 billion on TV ads in 2004.
The advertising pie consists of five major advertising channels – print, television, radio, cinema and outdoor. Lack of transparency keeps the growing cable advertising market away from the major advertising channel family. Everyday, every moment, cable ad is stretching its tentacles in all possible directions. That’s why it marches ahead against all other media. Though, print media has a major share in the advertising pie, but unnoticed and unobserved media, cable TV has covered a wide populace of 61 million.
Newspapers have a limited and stable readership with compare to cable advertising. Newspaper readership has declined with every passing generation while cable TV viewership continues to rise. As we know, geographically and demographically radio has reached all the nooks and corners of India. As a portable medium, radio has a very strong grip over the audience during the morning and evening commutes.
Cable TV reaches viewers through out day particularly in primetime viewing hours. But when we think from the advertiser’s angle, cable advertising impresses more than radio advertising because of the visual notion. Cable TV viewers are active, because TV itself is an intrusive, emotionally charged medium. As a big brother, broadcast TV covers a large number of diversified viewers – even viewers with no interest in the advertised product or service. Cable advertising can target the approximately exact consumers through unique programming that appeals to their interests and lifestyle choices. In the same time, having all the features of big brother, cable advertising prices are very low and cost effective because cable TV offers less waste through more strategic program targeting. Now let us familiarize ourselves with the advantages of cable advertising.
Advantages of Cable Advertising
If you compare cable advertising with the television advertising, you will find a very thin line between them. Cable advertising offers an audio-visual medium, motion, colors, like television advertising with an additional benefit (i.e affordable rates). It also has the ability to cover geographically and demographically target specific customers. The peripheral area of television may be larger than cable television but this is targeted at the ‘right’ customer. However, as a business strategy, every marketer wants to increase the area of the marketing sphere. So, they give first preference to the television channel. But due to high advertising rate, they cannot afford it for long time.
In many cases, some small makers may advertise for a limited period in the prime time. Others may choose a non-prime time slots if they want to have any long-term frequency. Unlike having a big budget and a particular allocated amount for promotional activities, it is very difficult to survive in the market. That’s why more and more small firms are turning to advertising on less expensive alternative, local cable channels.
Local cable television advertising can be highly effective, and very affordable. It can quickly create awareness of your business, product or service. It also establish your image and educate viewers about your products.
When your target viewers are limited and confined, cable advertisement is a perfect channel for micro target groups. You can compare cable advertisements with other television advertisements, cable advertisements are very cheap. You can achieve frequency on a limited budget, which often moves fence-sitters into action. Televsion advertisements may be missed by viewers due to bouquet of channels and the cable viewers are always in a fickle mood to switchover from channel to channel. There are many cities in India, where the viewers watched cable channel for their local news, films and some non-fiction programmmes. Because the private satellite channels are either in Hindi or English. In some states, you will find private regional channels. But in maximium states, the viewers have to satisfy with the only Doordarchan’s regional channel because they have no aternatives and the viewers need more entertainment programmes.
Cable operators take this opportunity by telecasting some regional films, songs and local news. It is also found that, these cable channels have a large viewership in compare to other satellite channels. So for a local advertiser, cable channels allow to communicate enough information to prompt people to call for an appointment, send in an order or request additional information. If you think about the medium’s cost in terms of the number of the number of people it will reach, then it will be the unbeatable vehicle for your advertisement. You can enhance and stretch the power of other existing advertising you might be doing. Though televison overcomes the barrier of literacy which is a major obstracle as far as print media is concerned.
In cable advertising, you may be able to reach a different segment of the population, one that doesn’t read newspapers or magazines. Overally, it fulfills all the functions of television advertising with a cost of less than the print media.
InCable is a leading cable and satellite distributing company in Hyderabad and subhurbs. The MSO distributes the signals through a single control tower connecting to small cable operators through optic fibre cable covering a radius of 30 Kms. In the local cable channel, InCable telecast two telugu news programmes, three movies (two tulugu and one hindi) daily. Though it telecast basically two types of programes, the ad tariff slots have catagorised into morning, matinee, night and news slots.
ETV Oriya, a 24 hour satellite regional channel, telecated oriya programmes exclusively for oriya viewers. This regional channel has covered larger geographical and demographic area than cable channels. ETV Oriya telecast at least 20 programmes round the clock. The ad tariff in a regional channel is catagorised on the basis of programme’s television rating point (TRP). In ETV Oriya, the tariff slots are divided in five groups (O1, O2, O3, O4, and O5). The duration of advertisemnt is calculated in 10 seconds. Whereas in local cable channel, the advertiser will be offered two types of slots ( 20 and 30 secconds). The rate for 10-second advertising slot in prime time (20:00 hrs) in regional channel is just 38 times less than regional channel. If you compare the same slot in a national channel, the difference is hell and haven (around 400 times). After this finding, the big advertisers are turned up towards the local cable advertising.
How to place your advertisement in cable
A ten second spot in television is actually equivalent to 80-second spot in cable television. One also has number of choices on the hand. You may produce an advertisement for 30 second spot or you can telecast the 10 second advertisement for eight times. A 30 second advertisement may contain more visual and information, which can portray your sale massage very attractively and effectively. The most important thing is the ability to target specific groups of viewers. A clothing store specializing in kids cloths can advertise on matinee movie. It is not a matter to count number of eyeballs watching your advertisement but a careful targeted audience that gets results for your business.
The next phase is to book a slot in a cable television.
Cable rates are highly negotiable. Some channels will cost more than others. The zones you choose to send your spots to, the size of your town, and the time of year, all have an impact on the spot price you pay. Don’t wait until the last minute to place your spots. Plan weeks in advance. Placing your order early will ensure you get the times and channels you want at a lower price. Call the sales department of your local cable operator. Find out spot rates and coverage areas. Before entering into the trade, make a sketch of your plan. It may need some research and good planning. You should have a ‘second look’ on your advertisement before releasing to the cable operators. Do not leave everything on media sales people, because they are good at devising clever strategies to use your entire ad budget. It is better to trust your own instincts and stick to your plan.
When you are buying cable slot, think horizontally, not vertically, when scheduling your advertisements. In other words, advertise on the same few networks at the same few times on the same few days of the week, week after week, month after month. The goal is to reach the same people over and over again. This is the best way to reach to your consumer. The consumer is exposed to your advertisement repeatedly. The best formula to reach a person with a second and third exposure to your ad is to go back to the same channel at the same time on the same day of the week that you reached him the first time. Do not scatter your ads across many different networks at many different times of the day. Yes, it will reach too many people with too little repetition to ever secure in their minds. It is nothing but to reach 100 percent of your city and persuade them 10 percent. But it is always better to reach 10 percent and persuade them 100 percent.
Due to powerful and persuasive advertising medium, cable advertising is become a smart choice of small and medium marketers. By positioning itself as an alternative to network television, cable television has found itself judged using the same parameter of network television that of mass reach and low cost. If you compare with magazine and direct mails, cable will score higher on its audiovisual capabilities. This is where cable should innovate. Cable industry can develop a time selling framework that lets advertisers buy cable slots on a local cable system basis. Now cable television is booming in a rapid way. MSOs are expanding their business not only in term of the number of subscribers but also in term of number of people employed by them. They should have separate advertising department that looks after this trade. In some cities, the big advertisers are also turned up towards cable advertising. No doubt it is a cheap ad but at the same time it is a chief trade.