Interview: ‘Pakistan’s ad market is worth Rs65b’ with annual growth of 10-12pc’

Pakistan’s total advertisement budget has exceeded Rs65 billion in the last few years with a growth of 10 to 12 percent annually. As much as Rs45 billion goes to TV, while Rs17 billion are spent on print media, said Fouad Hussain, Chief Executive Officer (CEO) of GroupM, the biggest ad buying house of the country.

“The total billings of the television and print media ads through GroupM are around Rs19 billion, which is over a quarter of the total advertisement budget of the country,” Hussain told Pakistan Today in an exclusive interview.

Hussain has a 17-year experience in the media industry and has been working with brands and media vendors in various roles of brand marketing, research, channel sales, content, strategic communication, media planning and ad buying.

Hussain has a 17-year experience in the media industry and has been working with brands and media vendors in various roles of brand marketing, research, channel sales, content, strategic communication, media planning and ad buying

He said most of the TV channels in Pakistan are relying on mobile companies and new brands of mobiles, which are spending billions of rupees on Television ads. Brands like Unilever, Engro Foods and local and foreign banks are slowly shifting to TV from print media, he said.

Hussain, however, said the cash flow management in TV channels and print media is a problem.

“I will not name any channel or media house, but many of the owners have other businesses and use media industry funds on their other businesses which causes delay or late payments of salaries to their employees,” Hussain told Pakistan Today.

He said that there could be some other problems like late clearance of the bills, but the other businesses of the owners of media houses are the main reason for cash flow problems.

The GroupM CEO said the size of the print media ad budget has also been increasing during the last five to 10 years. He said the brands have been increasing their print media budget overtime. He said the newspapers have also increased the cost of advertisement per centimeter.

“If a newspaper was charging Rs10,000 for an ad five years ago, it is now charging Rs100,000,” Hussain said, and added, “It is true that the TV industry has more of a bright future in the country compared to print media.” He said that the print media has been losing its share of the market because “unlike the TV industry, there is no new research work being done in the print media”.

Now, everyone knows which TV channel is more popular and in which city; and the advertisers also know where they need to focus. But it is hard to find out the same information for newspapers. No one knows which newspapers are being read and in which city or area.

“I will not say that the readerships of the newspapers are coming down, but it is hard to find out the exact figure.” He said the All Pakistan Newspapers Society (APNS) should conduct a survey of the newspapers’ readerships locally and area wise once every two or three years.

“We are a kind of advisors between advertisers and the media. We have to suggest to them where their market is,” Hussain said.

Replying to another question, he said the Audit Bureau of Circulation (ABC)’s figures are only for the government advertisements. It is a demand of the federal and provincial governments as they are supporting the TV channels and the print media through advertisements. The government spends Rs6-7 billion on advertisements in the media,” he said.

‘TV will grow by a digit this year and that’s because there will be a natural growth in advertisements, but I think that it should grow in maturity as well so that the content improves’

The ABC certification does not mean readership and it does not tell which area the newspaper is being read in, he said, and added that it is very difficult to find that out.

He said that the APNS should conduct a survey through a reputable institution like the TV industry.

“The owners of the print media have stopped investing in their writers and on journalism,” he said, adding “If they stop grooming writers, the standards of newspapers will decline. Earlier, this industry was considered important because the owners were spending on it.”

He said his own company was ready to conduct an open and transparent survey of the readership of the newspapers if 50 newspapers out of the 200 members of APNS contribute money for completing this task.

He further said that we only have regional newspapers in the country. There are no national newspapers in Pakistan. He said most of the channels owners are also newspapers owners.

He further said that with the improving law and order situation and a better economy, the national and multi-national companies are increasing their advertisement shares on TV and print media. He said the fashion industry as well as the top designers are also turning to TV and print media.

There are a few multinational telecom companies in the country which mostly advertise on TV. Local brands like banks place their ads on both the TV and the print media. The builders usually place their advertisement on Cable TV as most of them are not registered and do not pay General Sales Tax. Our company, however, does not do business with unregistered companies.

GroupM, the largest ad buying group in Pakistan, is registered on the London and New York stock exchanges. Hussain said the company is also located in Karachi, Lahore and Islamabad.

The CEO said that GroupM has won many international awards which are a testament to the high standards that the company maintains.

He said his company ensures that their clients reach their target audience in the most cost-effective manner.

“Pakistan Idol was special. It was the first time in Pakistan that an agency was truly able to collaborate with a TV channel,” Hussain said.

“TV will grow by a digit this year and that’s because there will be a natural growth in advertisements, but I think that it should grow in maturity as well so that the content improves,” Hussain said.

“The radio is just songs. I don’t think that as a country and as a media market, we have been able to crack a solution as to how the radio should progress,” Hussain said and added that there are potentially 40 million radio listeners in the country.

“Outdoor media marketing has been a very progressive field over the last five years because of new technology. Now we are moving to electronic billboards. Digital media is the new marketing trend and people are turning to it more and more, but we still need to increase our technical expertise. Everybody wants to use the digital media but very few know how to use it. So, I think we are going through a learning curve,” Hussain said.