Tuesday 28 February 2012

What's the Offer..!

Taste Kahan Hai? (Where is the taste?), asked the ad of Everest Chat Masala. Well I don’t know where is the taste exactly hiding, but what I want to know is, WHERE IS THE OFFER? I am looking for the secret offer made to me in the ad of Rath Vanaspati (that I caught today on Colors), since then it is on my mind. I vaguely remember the last few seconds of the ad in which the voice over told me, "If I want to know the offer, I have to buy Rath Vanaspati!"
I wish I could have shared the ad with you, but could not find it on Youtube (searched with the string, Rath Vanaspati). Did not bother to search it on facebook, yeah, facebook is for more cool things in life and not vanaspati's. Vanaspati's are mumma’s stuff!
Assuming that a kilogram of vanaspati is not a big deal and the secret offer, in the calculative world of FMCG (Fast Moving Consumer Goods) products would be no different than:
·         Buy one get one free – Two for the price of One
·         Buy a product and get another product free – Buy a Toothpaste and get a Toothbrush free
·         Buy a product and get X% extra free – 1200 grams for the price of 1000 grams
·         Buy X number of packs and get one free or save Rs. X/-
·         Gold/silver coin – Inside the pack (I’ve been waiting to get one…!)
·         So on and so forth….
Does Rath Vanaspati have something better to offer? Is that the reason they’ve bought media on television to drive the curiosity and don’t want to spill the beans? Will it make people beat the path to the nearest kirana store upon seeing this curiosity arousing ad? Will the offer be big enough to induce repeat sales even without the offer?
Well here is the offer, if your answers match with those of our judges; you’ll win a surprise gift. Okay, I won’t keep you guessing, “One lucky winner stands a chance to win a kilogram of Rath Vanaspati!”

Sunday 26 February 2012

Take a Break..!

Amitabh Bachchan’s, sometimes humorous, sometimes anecdotal small talk to the participants of Kaun Banega Crorepati (KBC), was put to good use in the latest season of KBC. One of it was just before the commercial break when Amitabh appealed to the viewers, “Aap kahin jaiyega mat, hum bas abhi wapas aaten hain” (don’t go anywhere as KBC will be back soon).
From their humble beginnings in 1980’s, commercial breaks now have an identity of their own and are raison d’etre for over 600 television channels. Nestle India sponsored the first soap on Indian Television, paying for the telecast and production fee of Hum Log in return of 5 minutes of commercial time on Doordarshan, aka DD to advertise its brands, especially, Maggi Noodles. Until the arrival of 90s, people kinda enjoyed watching commercials and most of it registered in people’s mind (remember! Bombay Dyeing, Vicco, Charms, Nirma Detergent, Hajmola et al.), the credit goes to DD (the only one in the race) and of course to few brands (hence limited number of ads) in a given category, because of which certain brands established during the early years of television still enjoy an iconic status today.
Much of the TV programming landscape changed in the beginning of 90’s, when satellites began to beam private TV channels into India (STAR; FYI STAR is an acronym for Satellite Television Asian Region, MTV, Zee etc.). During the good old days of DD, no one ever imagined that segments of news could also be sponsored, but satellite channels turned most of the established wisdom over its head.
However, one thing that remained constant during all the advancements in consumer and broadcast technology was the commercial break. Sometimes big, sometimes small (1 minute/2 minutes/eternal breaks!), sometimes with an element of “intelligence” (marketers love to call it interactive ads viz. catch the number of times a particular ad is shown, SMS the secret code during the commercial break, etc. etc.), the only intelligent people over here being the advertisers and broadcasters, getting the metrics that  they want for measuring the effectiveness of their ads and making the viewer spend for each SMS (the all too famous tip “The more you SMS the greater are your chances to win”).
Off late, broadcasters have made the wait during the commercial breaks much easy, by showing a timer, indicating the time to return to the program (am yet to see this timer being sponsored, I hope watch brands read this post!). Contextualization has also set in; recently saw the ad of a broadband service provider on a movie channel just before the return to the movie with a download progress bar captioned as ‘now playing’.
No matter how much we rue them; commercial breaks keep the programming alive and are a major source of revenue to broadcasters. Especially for free to air channels (even in the case of pay channels, the ratio of revenues from advertising to subscription is approx. 80:20), that do not earn any subscription revenue, advertisements keep them going.
India’s advertising to GDP ratio of 0.35% (lower than US, UK and China), is approximately half of the global average of 0.75% thus indicating an increase in the advertising spend as the economy grows.
As the phrase from the evolutionary theory rightly puts it “survival of the fittest”, the ads or commercial breaks that are high on IQ (Innovation Quotient) will continue to register in our minds and won’t be rued by us, the rest will fall by the side. So….you tell me, break banta hai?

Thursday 16 February 2012

Chai Mein Dooba Biscuit………!

The title of this post when translated to English means, a biscuit drowned in tea! The translation is intended for the international audience of this blog J
Well there are many who muffle the crunch of their biscuit by dipping it into tea!
But many a time the biscuit would have gone down to the opaque abysmal bottom of tea cup/glass, may be because it was dipped for too long or because it could not take the heat. Let’s stay away from the blame game J but the truth of the matter is once the biscuit is lost in the depths of the tea cup, the tea takes the flavor of biscuit, depending upon whether the biscuit was sweet or salt.
Over time we align ourselves to specific brands of biscuits and have the mental partitions of what biscuits can be eaten crisp and dry, and what biscuits make for a good dip.
Every time my biscuit touches and settles as an amorphous mass into the bottom of my hot beverage tumbler, there are flurry of questions that cross my mind:
Is there a marketing opportunity to this simple truth?
Will someone buy a brand of biscuit whose advertising copy reads…..Yes and it is perfectly safe to dip it into your hot cuppa* or This lasts longer inside the cuppa compared to other brands of the same class* and followed by the oh so famous star* disclaimer that dotes all advertising copy from autos to magical potions developed by cosmetics industry.
*Only when dipped for up to a minute and the temperature of the beverage not exceeding70 degree Celsius.

There could be design innovation where the size of the biscuit is such that it’s compatible with the rim size of cups…for a seamless dip!

Dilemma of the brand owner….?
“May be it’s a great idea but what if consumer rights group are instigated by the competition to bring down the claim and hold public demonstrations showing the biscuit going down the cup, what if it is picked by the networks and becomes a breaking news! Will the consumer get the perception that biscuit is too hard and good for feeding the pets or they may just shrug it off as oh so uncouth?”
But before you rubbish all that is said above, it will be good to recall that there is actually a biscuit brand targeting the kids that tells them and their parents subtly about the right way to eat this particular biscuit…does it light a bulb…if not, here’s the youtube switch!
Even if the brand owner promotes dippability, is it an admission of a socially unacceptable behavior…? If at all!
Let’s have a show of hands, how many of us indulge in the luxury of dipping the biscuits in the presence of people whom we are meeting for the first time or especially instances where we would be at our best behavior….say a celebrity guest on a TV talk show dipping biscuit into tea…I have not come across such footage! If research singularly establishes that folks abstain from dipping biscuit into tea due to the fear of losing the biscuit to tea.., then it’s manna for the marketer and the modified advertising copy would read:
“For moments that don’t melt away”, an advertisement showing a happy family dipping biscuits into tea and smiling at each other!
“For those moments of power”, an advertisement shows a group of executives in a meeting and the lead anchor dipping biscuit into tea!
The world of advertising is quite creative and one never knows when something trivial such as the act of dipping biscuit into tea becomes mainstream. Maybe we’ll soon have magic biscuits that taste different each time depending upon how you consume them, with tea, with coffee, with milk or just the way they are traditionally advertised – “crisp and crunchy!”
Ciao. It’s time for me to have a hot cuppa..........with some biscuits!

Friday 3 February 2012

I can’t text as it’s my song that they are gonna play..!!

Recently Uninor tied up with RedFM and Hungama Mobile to offer RedFM on Mobile.
How it works?
Uninor subscribers dial the toll free number 55935 from their Uninor mobile and select their favorite RedFM station stream. Favorite RedFM station stream…? Yes, if I am a Uninor subscriber based in Bangalore, I can dial 55935 and listen to what RedFM is playing in Chennai or Pune or Kolkata….. Isn’t it cool  (FYI…The RedFM city specific radio streams that are made available to Uninor subscribers are Delhi, Pune, Ahmedabad, Mumbai, Kolkata, Jamshedpur, Chennai and Bangalore).
The subscription charges are INR 10.00/week, bundled with free 100 minutes of service usage. This is the upper end of the subscription plan. The subscription starts at INR 1.00/-.
Eco-system Players:
Uninor – Brings in the capability to bill/collect monies from the end users and provide access to its (approximately) 33 million subscriber base.
Hungama Mobile – Platform Provider/System Integrator – Integrates RedFM content feed with Uninor.
RedFM – Provides programming and content.
Music Labels – Providers/Owners of music content that flows through Uninor’s toll free number 55935.
What this tie-up means for RedFM?
As per the conditions of the license granted by Government of India (GoI) to operate a FM station, FM players are allowed free to air broadcasts on main carrier and data on sub-carriers only. As far as terrestrial radio is concerned, the only manner in which the radio station can make any money is by selling advertisement slots.
However mobile value added services offer radio stations such as RedFM,
-         Additional revenue stream, via subscription revenues.
-         Ability to distribute content in regions where they still do not have a terrestrial presence.
-         Ability to leverage brand RedFM and the equity earned by some of its prominent RJs with their listeners, e.g RJ Mallishka, in regions where RedFM does not have a terrestrial presence.
-         Experiment with programming and content to gather a rich data set on consumer preferences.
-         Sample consumer preference in towns where RedFM does not have a presence (ahead of Phase III FM license auctions).
-         Audience measurement and
-         Ability to offer “airplay” to music from fledgling Music Labels such as Talent Roof Records, assuming that the feed on mobile is programmed differently from the main terrestrial FM Channel(s) of RedFM.
What I could not gather from the public domain about this tie-up is,
1.      What are the charges levied to subscribers once they have exhausted their first 100 minutes of free radio stream? I also assume that the browsing duration is included in the free minutes of usage, thus effectively bringing down the actual free minutes available for listening of music.
2.      Is RedFM offering a linear feed/simulcast of their existing stations or is the programming tailor made for mobile? If it is tailor made for mobile, what is the %age of RJ Talk/Advertisements (if any) with reference to (say) every 15 minutes of programming?
3.      Apart from the current 8 stations, does RedFM plan to add more stations to the toll free number 55935?
4.      Is the tie up exclusive between RedFM and Uninor, or Uninor can also bring other FM brands? Alternatively, can RedFM launch this offering with other Telco’s? If not, what is the period of exclusivity with Uninor?
Who promotes the Service?
Being the only media organization among the Eco-system players, there is a natural expectation from RedFM to promote this service on its media vehicles of Radio (Advertisement Slots/RJ mention), Internet (Website/Social Media Presence) and SMS Footer Messages. But it will be interesting to note if this expectation has translated to a favorable revenue share for RedFM.
How much does RedFM actually earn?
·         Each Eco-system player gets an equal revenue share @ 33.33%.
·         The number of Uninor subscribers as 33,000,000.
·         2% of these subscribers sample the service over a three month period and each of them spend an average amount of INR 5.00 to avail this service.
Therefore, revenue over a three month period is 33,000,000 x 2% x INR 5.00 = INR 33,00,000/-.
Share of RedFM equals (INR 33,00,000) / (3 Eco-System Players) = INR 11,00,000/-. As the calculation considers a three month horizon, the monthly gross revenue accrued to RedFM = INR 11,00,000 / 3 months = INR 3,66,667/month.
Music Royalties – Now comes the hard part, necessitating the need to benchmark our assumption on certain established practices. Let’s assume that RedFM pays out 18% to 30% of its gross receipts as revenue share to Music Labels, which is in line with the current established practice within the Mobile VAS eco-system, wherein the Telco shares a % of End User Price with the content aggregator and the content aggregator in turn shares a % of its receipts with the content owner. Off course there are levers available to each of them (content aggregator and content owner) to get a better bargain, but let’s keep that aside from the current discussion. Assume an average payout of 25% from the gross receipts of RedFM to Music Labels, therefore the amount payable towards Music Royalties equals INR 3,66,667 x 25% = INR 91,667/-.
Personnel Cost - For programming the feed, revenue reconciliation, maintaining additional paperwork for Music Royalty Agreements on mobile platforms etc. Let’s assume this effort @ INR 40,000 per month.
Promotion of Service - Assuming an average rate of INR 500 per 10 second spot and 4 spots a day for 30 days in a month (across RedFM stations). The cost for advertising this offering comes out to INR 500 x 4 Spots x 30 Days = INR 60,000/-.
Therefore, the net income stands at INR 3,66,667 – INR 91,667 (Music Royalties) – INR 40,000 (Personnel Costs) – INR 60,000 (Advertising Spots for promoting the service) = INR 175,000/-.
I have also assumed that the above income does not get added to Gross Revenue of RedFM’s FM radio channel(s); otherwise it will be factored towards the calculation of the Annual Fee to be paid to the Government of India, charged @ 4% of Gross Revenue. Assuming the latter statement to be true, the net income will stand at:
INR 3,66,667 – INR 91,667 (Music Royalties) – INR 40,000 (Personnel Costs) – INR 60,000 (Advertising Spots for promoting the service) – INR 14,667 (4% Gross Revenue payable to GoI) = INR 1,60,333/-.
Well, the above calculation is based upon lot of assumptions and theory. But it gives a generic idea on the commercial success / failure of this tie up of RedFM with Uninor. Also the organizational objectives in this case, especially at the start of the service, may not be completely weighed towards commercial factors.
It will be interesting to see how this service is adopted by Uninor subscribers and pans out across India.
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