The Economist, in an unbelievably futuristic cover story titled Who killed the newspaper, way back in 2006, had written that the last American will throw the last piece of newspaper into the dustbin by the year 2050! I trusted The Economist and its Intelligence Unit’s researches far too much to outrightly reject its forecast, but surely had thought that that would be crazy, since I came from a family where I grew up seeing my father read about a dozen odd newspapers daily; and us reading the leftover pieces – because, after he had finished reading a newspaper, it would be full of holes due to his cutting out various articles. He had a wall-sized cupboard with hundreds of drawers with articles on every possible topic in the world... well-documented and stored alphabetically. So naturally, The Economist piece set me thinking about the ramifications for and of a world without newspapers, echoing the line of thinking of my father that after all, newspapers were where we got our knowledge, and even education from. Newspapers are a significant pointer to the literacy of a nation. After college, intellectual and world-class columnists like Swaminathan and others, from newspapers, contributed to expanding my knowledge pristinely – you can imagine the respect all this embedded in me for the institution called the newspaper! So I was in a state of semi-disbelief and doubt for the past few years, post reading that cover story. But it all changed, slowly...but surely.
It all started changing around 2009 to 2011! As everyone knows, we were one of the country’s biggest ad-spenders till 2012! But interestingly, our returns from newspaper advertising started dropping sharply from 2009-2010. The first year, the admission applications we received from students due to our newspaper advertisements dropped to 40% of the levels we had in 2008-09. The next year, the same was 25% compared to 2008-09 levels. And finally in 2011-12, our applications from advertisements were, hold your breath, just 5% compared to 2008-2009! So basically, in three years, our returns from newspaper advertising came down by a mind numbing 95%! The question you might ask is, did our admissions also come down as much? Thankfully not! Yes, like the economy in general and the education industry in particular, the downturn did affect our business, but that was by a far lesser margin compared to the sharp decline in our returns from advertising! So how did we manage to stay afloat despite the disappearing returns from newspaper advertisements, you might wonder? But before that, let me tell you what we went through as we saw these sudden and massive drops!
The first year, our typical reaction was to straightaway blame the recession and not our advertising strategy. After all, those were newspapers which made us a brand and got us all the students in all those years! So newspapers were never to be questioned! The second year was when we actually started thinking, was there something going wrong with the management education sector? But such a huge drop just due to recession and lack of demand for management education? It was tough to believe! By the third year however, realisation had started to dawn upon us and we realised that newspapers as a means of advertising had not only become a thing of the past in the developed world, but also in India! Especially if you wanted to target the youth, or actually anyone born after 1980 for certain! None of them is reading newspapers anymore! So how will this segment see your ads in the first place and how will they pick up your application form? Yes, that’s the hard fact! Newspapers globally have tried to shift focus from serious content to entertainment and lifestyle in a desperate attempt to cling on to young readers! But alas, naked bodies and titillation are far more easily available and in greater variety on the internet and such a strategy of newspapers has failed worldwide to keep youngsters attracted to them! And India has been no exception, despite the most colourful of peepshow supplements taken out by all newspapers across the country!
In the UK, as per a report by FT, a typical street of 100 houses used to keep 140 newspapers a day in 1950! Then of course TV happened, and then internet! In 2010, a street of 100 homes was keeping only 40 papers! Take another statistic. In 1998, advertisers spent £2.4 bn in newspapers and only £19.4 m online. The same now is expected to be £1.7 bn in newspapers and a whopping £4.7 bn online!!! That’s how the world has changed, with newspapers around the world closing down or being on the verge of closing down. India will be no exception either. Media, especially print, is an investor’s nightmare! Yes, I know I started a magazine business in 2005 hardly knowing what lay ahead; and as the world’s most revered newsmagazine Newsweek goes purely online, I know that sooner or later, we will too and so will magazines worldwide, and thereafter newspapers!
The question then is, how did we survive? The bigger question is, what should advertisers do? Well, we survived because of my wife! Too often, we men fail to give enough credit to our wives! But then, in my case, she is too sharp to ignore! Around the time that we sat down to write our book Thorns to Competition, she kept showcasing researches on how internet is the future, how traditional advertising is dead, how it’s the social media that people care about, why today’s youth hates newspapers, why if you want to get to the youth, you must be on the sites they love... etcetera. You see, wives are tough to ignore! Thus, despite my questioning attitude over the past three years, we shifted more and more to online advertising (of course, Thorns to Competition got filled with perspectives of online being the future of marketing and for giving thorns to competition)! And kept getting increasing returns. I remember that more than two decades back, the erstwhile Hindustan Lever had started demanding from newspapers details about the exact returns on their advertising investments – that is now the most beautiful part of advertising online. Online, every player charges you for a genuine click on your ad and not for fake hogwash! Finally, I can say for real that gone are the days when one would say that “50% of advertising revenues are useless; the only problem is, we do not know which 50%”! Today, advertisers across the world, thanks to Google and the likes, can say that they know exactly how each penny spent gave them returns! And that’s why I call Google a media house! And I pulled them up in one of my recent edits to be responsible for the content they promote and throw to their users (http://www.thesundayindian.com/en/story/right-to-dignity-is-far-more-important-than-freedom-of-speech-and-google-must-stop-acting-innocent/46819/).
You might be wondering then, what about the world and education? What about tomorrow’s generations? Well, again my wife sorted it all out for me! She stopped reading newspapers quite sometime back. Initially, after reading the papers in the morning, when I would ask her her views on something that I had just read, I used to get disappointed that she hadn’t read the news; I even used to joke of her as being utterly ignorant! Slowly and steadily, I realised that the joke was on me! Because in a household where knowledge is the key competition, she would ask me my views on certain things she was reading online, and I started looking like a fool. What she was reading online was far more than what I was reading in the newspapers! Worse, it was all far more relevant to her! While I was getting only one page of relevant news from a 24 page newspaper, she had subscribed to hundreds of papers and sites that gave her completely focused and far more relevant news as per her choice every morning on her iPhone! So with the internet, the world surely is in safer hands! It’s time for us to realise that nobody is really reading newspapers, well almost; and newspapers will give no returns! If you want your advertising to pay back, shift to the internet – that’s where the youth is and that’s where the future of your business is. Of course, you might need to give an occasional, necessary ad or two in the newspapers to cater to the older generation and perhaps for brand building! And as for knowledge? That is in no danger of disappearing; and no, the next generation will not grow up to be illiterates! However, yes, your business may not be able to cater to the next generation unless you realise that you are a moron to be still advertising in newspapers!
- 14 March 2013 |
- Dr. Arindam on Indian Economy