TV.NXT 2011: Why advertising innovation on television isn't leveraged fully

The concluding day of TV.NXT had panellists from the media fraternity discuss whether the amount and kind of innovation done in television advertising has nearly reached its full potential, and if not, then what could be the possible reasons.

The second day of TV.NXT 2011 concluded with a session on 'Advertising innovation -- missing in action'. Moderated by Prashant Panday, executive director and CEO (chief executive officer), Radio Mirchi, the session had panelists, which included Rohit Gupta, president, network sales, licensing and telephony, Multi Screen Media (MSM), Raj Nayak, CEO, Colors, Vijay Subramaniam, executive director, Disney India Media Solutions and Alliances, Punitha Arumugam, group CEO, Madison Media India, and Baskar S, co-founder, Amagi.

The session dealt with value creation for brands using advertising time on television, particularly using GECs. Gupta of MSM, began by stating that 90 per cent of the innovations in advertising on television are done by broadcasters themselves, and there are several standard innovations which most broadcasters already do with large brands. "Innovation works this way: the more you start pricing it, the more you become like a tele-shopping channel," mused Gupta. "One should practise it with a few brands only, and do brilliant stuff at that. This is when value will come in."

He further stated that it makes no sense when agencies want the biggest logo for their brand to be seen on the TV screen, passing that off as an 'innovation'.

Nayak of Colors said the term 'innovation' is used rather loosely. It simply means something that should not have been done before. And, to do something like that usually implies a heavy cost that has to be taken into consideration, and the advertiser should be willing to pay it. "But, no one wants to pay; if there is no money, it won't happen and the effort won't go into it," he said.

He further added that newspapers have it relatively easier when it comes to 'breaking clutter' in advertising, and The Times of India, in particular, does this well, almost to the point of flaunting. On TV, however, there is a lack of inventory for innovation. "And, if inventory is running full, it is because we're selling it cheap, not because we're so rich!" mused Nayak, on behalf of broadcasters.

The moderator then questioned whether clients really buy inventory for innovation on the weight of its price. Arumugam of Madison Media, took it up, first clarifying that gone are the days when making the client logo larger on screen was seen as an innovation. "Our client Cadbury, innovated on KBC, and we did it rather differently," she stated.

Arumugam further said that innovation is actually measured in a currency different from regular FCT (free commercial time), and this currency is about measuring the change in preference for a brand.

Gupta added his own bit when he said the IPL is such a strong property, but where is the innovation? At some basic level, he stated, the viewer wants a cleaner, clutter free field to watch, and innovation for the sake of it almost always goes down badly. Furthermore, even the sizes of innovations on screens are pre-determined by the government, which can get restrictive. "So, it isn't just about what advertisers want, it is about what our viewers want," he shrugged.

Giving the perspective of whether it is easier to innovate on a kids channel or not was Subramaniam of Disney, who said that at the end of the day children are consumers too, and want the 'Disney' experience, so it is important to put kids at the centre of the innovation as it is necessary for them to fall in love with it.

Panday then asked the panellists whether TV has worked hard enough to integrate brands into its fold, to which Subramaniam replied that a lot of innovation is customer focussed, but at the end of it, a marketer should take a bigger interest in this, as it is not a media planner's core area of expertise unless a marketer desires it.

Baskar S of Amagi, stepped in at this point, saying as per research done by his company in conversation with the 'Top 20' brands in India, it was found that TV gives them reach, but is not as effective in geographic and demographic targeting as print media. Further, a limitation here is that the TV ad fraternity is limited because of the number of advertisers in it.

Nayak contradicted this by saying that this isn't true, and there are enough advertisers out there on TV. "Today, one can buy spots on a national Hindi news channel at a dirt cheap price. It has reached a stage where I can wish my wife Happy Birthday on a national news channel," he said, chuckling.

Panday moved on to the next topic: can innovation help broadcasters (particularly GECs) as well, the way MTV Roadies did it on MTV? Gupta said that GECs talk to the lowest common denominator in the country, so one has to bear their needs in mind before attempting lofty innovations, and perhaps niche channels can attempt it more than GECs.

Arumugam was optimistic and gave examples of innovations done for Saffola World Heart Day on TV, or even the P&G Shiksha initiative, which received support from broadcasters. "And, it got a good ROI, so I don't see why Gupta and Nayak are defending their turf so much!" she quipped.

Panday then came to the hard facts, asking broadcasters what percentage of their revenue actually comes in from innovations. Subramaniam replied that a lot of governance comes in given the kids genre space, and hence, one has to be even more responsible with innovations and can't do too much of it. "Activation is not cheap in this country," he said.

Nayak felt that India doesn't have enough DTH homes, as of now. Once DTH fully sets in, interactivity will happen.

"Currently, we are not in the kind of eco-system that supports innovation. Let's not discuss bathroom fittings, when the house has not been built as yet!" he joked.

Arumugam added that it isn't as though advertisers refuse to pay for innovation; ultimately a show has to generate enough TVRs for it to draw innovation to itself. "If a 4 TVR becomes a 10 TVR, which advertiser won't want to spend more on it?" Arumugam pointed out.

Panday wanted to know if having a treaty-like-setup, the way it is with print media, will help advertising innovation in television, Gupta took it up by saying that most large broadcasters don't have extra inventory, and a treaty set up would probably not work too well in television on that front. "I don't think advertising innovation is the way to make this television industry a $80 billion one," he opined.

Nayak further added that print is a 150-year-old medium, whereas TV is around 20 years old; so clearly, some discount should be given to the medium's performance in India, with reference to ad innovations.

Even when it comes to AFPs (Advertiser Funded Programmes), Gupta opined that most advertisers aren't willing to put monies behind the concept. "Besides, a broadcaster's core aim is to entertain his consumer. At the end of the day, the innovation has to contribute to profits, or it doesn't make sense for anyone," he said.

Then arrived the conclusion statements. It is important that innovations should be sustainable, and not just fill some need gaps the way it is right now, Subramaniam opined. Arumugam concluded her talk by predicting that non-FCT revenues should be 30 per cent easily in the next three years. Baskar S, on the other hand, signed off with a statement that there should be a clear measurement mechanism to measure innovation, and only then can it be monetised. Nayak contradicted it by saying that measurement/research is the fastest way to kill the concept of innovation, a thought with which Gupta concurred.

"As per our research, the property 'Action Replay' should have fetched us Rs 150 crore," he chuckled.

(TV.NXT is organised by afaqs!, in association with STAR News (presenting sponsor). The other sponsors include Zee 24 Ghante Chhattisgarh, Amagi, HeadHonchos, ApnaCircle.com, Fox History & Traveller and Lukup. TV.NXT was held at the J W Marriot, Mumbai, on September 29-30, 2011.)