29 Aug - 5 Sept 2014 #722

Moving with the eyeballs

As Indian readers migrate to digital platforms, the advertising industry struggles to adjust
Kunda Dixit

“Advertising is still about ideas, the challenge is to improve the quality of our ideas.”-Colvyn Harris, CEO of J W Thomson South Asia
Like the rest of the media, the advertising industry is also confronted by the challenge of the migration of eyeballs away from print and screen to the Internet.

Because advertising is the lifeblood of newspapers and helps sustain journalism, the era of direct e-retail, social network marketing, and native advertising have presented challenges to the whole media industry. Not only is the volume of advertising in traditional media going down internationally, but ad agencies now do not necessarily have to rely on advertisers to reach consumers anymore.

“We have to hold on to the fundamentals of marketing, but also focus on end-to-end brand experience right up to delivery and concluding the sale,” says Colvyn Harris (pic), CEO of J W Thomson South Asia based in Mumbai. A Federation of Indian Chambers of Commerce and Industry (FICCI) projection shows that while print and tv advertising India-wide is expected to grow by 15 per cent between 2011–2016, digital advertising in all platforms will grow by 30 per cent.

Clients of ad agencies are also trying to ‘disintermediarise’ and deal directly with customers by paying for views on social networking sites or negotiate with publishers on sponsored content.

Advertising companies like JWT have tried to innovate and devise solutions to keep up margins. And their acquisition of stakes in Hungama Digital Services, Social Wavelength and Encompass is an indication that they expect an upheaval.

Harris knows the region well, having served in JWT Sri Lanka and on a recent visit to Nepal, talked about the changing landscape in advertising that will affect journalism: paid stories, native advertising, and treaties.

With treaties, the media gets free shares in a startup and pays back in planted stories in the paper, masquerading as news. Harris explains how it works: “It is a barter, the currency is paper, goods and services are exchanged.” The lines between news and advertising gets blurred, and newspapers have to learn to do this without hurting their credibility, he adds.

The fundamental principles of advertising, however, has not changed, Harris says: “It is still about ideas, the challenge is to improve the quality of our ideas.”

There is still growth in traditional media advertising by telecom, two-wheeler, FMCG or real estate clients, but brand recall is falling. Harris often gives a test in which he asks clients to tell him what was the front page ad in that morning’s Times of India. Most can’t.

“In the old way of advertising there is overkill and wastage,” he says, “the new way is to seamlessly be a part of the public’s conversation without interrupting them.” Which is why JWT has bought into digital companies which specialise in connecting clients directly with customers through social media.

Increasing numbers of Nepali companies are now advertising through Facebook and Google, and this trend is expected to pick up. However, for Nepal a lot will depend on investment picking up.

Kunda Dixit