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Business – Advertising cos betting high on utility bills segment

Priyanka Akhouri

Mumbai: With the advent of advertising on electricity bills, railway tickets and gas bills, corporates get a new platform to advertise their brands. With television, print and radio dominating medium of advertising from years, companies are now seeing potential on utility bills.

At present, the utility bills segment is very small as the companies are investing only around 1-2% of their total ad spend on it. However, it is expected to increase to 5% by next year. The current advertising market size on utility bills stand at around Rs 750-800 crore with 100% inventory utilisation and is estimated to reach Rs 1,000 crore per annum in the next two years.

According to an analyst, this segment is not yet fully developed, but has tremendous scope and is expected to grow at a compound annual growth rate (CAGR) of 20% in the next two years. Sectors like FMCG this year saw 40% rise in their ad spend on utility bills, whereas telecom industry grew by 30%. Axis APM CEO Amit Dey said, HUL invests around Rs 10 lakh for a month on each of its brands.

“Utility bills provide substantive reach in households. Brands such as Fair & Lovely, Surf Excel, Vim, Domex and Close Up have used this medium in the past,” said an HUL spokesperson.

Advertisers like Garnier, Tata Sky, ITC, BSNL have been using this medium. Analysts say ads on utility bills have a micro and macro wider reach where a company can measure the consumers targeted in a particular state and city. “Advertising on the utility bills of sectors like power, oil and transport are gaining importance as it has 100% reach. With utility bills advertisers reach approximately 14 crore houses per month,” said Dey.

However, this medium is not widely used by companies as there is lack of awareness of this platform. Media planners say companies prefer television or newspapers to utility bills since it has a brand recall value. Also, lack of awareness and poor printing quality hold back the companies’ from adopting this platform.

“The main drawback is that the companies can use this medium only on a monthly basis and not on a daily basis unlike the television ads. The total investment is less than the investments in other alternate media like OOH and online. To become a significant part of companies’ budget, innovations in the quality of print and technology is required,” Dey said.

The Indian Oil Corporation Ltd (IOCL) has recently tied up with Axis, through which ads will be displayed their bills. Through this tie up Axis will be able to reach 8.23 crore LPG households in India. According to reports, the railways initiated this process in June 2007 by offering ad space on railway tickets. It has now extended the reach to reservation tickets across northern, western and southern railways.

“Out of the 14 crore households, 8 crore comprises of gas bills, 4 crore through electricity bills and 2 crore through railway tickets. We expect to add more state electricity boards and ultimately reach the entire 25 crore household in next two years,” adds Dey. Axis APM is also in talks with mobile operators for their post paid billing and banks for their monthly statements.

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September 29, 2009 - Posted by | Uncategorized |

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