For over 50 years FMCG major Hindustan Lever has dominated the Indian market with brands that have become a household name for many. Now it is about to turn over a new leaf to welcome its mother company Unilever. After having hogged the media space, especially television and now opening its doors to new media like internet and radio, the time seems right to question its experts on their outlook to the fast developing media landscape.

In conversation with Sujatha Shreedharan and Renelle Snelleksz, HLL general manager - media services Rahul Welde, who is most uncomfortable in front of a camera, puts aside all his inhibitions once he begins speaking on his area of proficiency - media and advertising.

Excerpts:

With the HLL name change announced, the next question is how would this pan out in terms of a branding and marketing strategy?
Since it's just been announced, we haven't really planned that out as yet. It will be put to vote in the AGM in May, after which it will get adopted and implemented.

One of the biggest advertisers on television, HLL is now looking beyond the medium. What kind of media mix does HLL now look at? You have also maintained that TV is bound to decline?
Television will continue to be important. However it will also continue to decline in importance. The reason for this primarily has to do with the way consumers are reacting to television messages. Studies indicate that there is a greater degree of ad avoidance, greater degree of clutter on television and that has resulted in lesser interest in television by consumers.

Simultaneously people are spending more time outdoors, doing other things than just watching television. As a result television is facing a lot of competition from the other media.

There was a time when there was no television and print had all the advertising - but that lasted only until television made an appearance. It ate big time into print advertising. Something similar will happen to television with the advent of radio, internet, mobile communication and other types of new media. Eventually they will fight for the same share of the rupee.

I don't think anything as drastic as the death of television is bound to happen anytime soon but it is staring into the face of a huge challenge even while other media grow at an exceptionally fast pace. The same applies to our understanding of media buying as well. Our focus has shifted to alternate media and is much higher than what it used to be two years ago.

Also, I must say that there is also nothing like an HLL mix, as it depends on our brands. Some will focus on TV and spend nothing on print and vice versa, so the strategic thinking as to what to use comes from the brand and consumer lens. We are thus excited about the internet when it comes to youth brands, while outdoor and DD are key for brands like Wheel. From an industry perspective, I think radio will experience growth.

With HLL always known to be television heavy, what happens in the case of mass channels and niche channels, what strategy would you follow in that case?
Well, we do spend on niche and mass channels, but with the whole area of fragmentation of audiences with multiple channels emerging, where stickiness is a challenge and competition is high. Now what it really means for us is that segmentation and multiplication of channels provides the opportunity to peg note and talk to the consumer.

Unfortunately, the costs have increased and given that the overall advertising pie is fixed. The ad pie doesn't grow because there are more channels, but what is happening is money is shifting from the big to the small or from the leaders to the challengers.

The growth of channels, we will see an increase in the number seconds, but what is often interpreted is that spends are also increasing in the same proportion. It is of course a big challenge as fragmentation makes the task of planning even more difficult, where agencies will produce software and optimizers making the process more sophisticated. This scenario is good for segmentation, bad for costs. Thus I don't know whether to call it a 'happy situation' because after a point of time your returns become sub-optimal when costs are high. Then that becomes a worry.

Given that you are the biggest advertiser on kid's channels, what is the potential that you see in this space and how do you (as an advertiser) think it will shape up in the coming years?
For us it is important, but the degree of importance it would be very low because you have to look at it from the brand and consumer fitment perspective. There are a few of our brands that actually talk directly to kids while a larger percentage of our brands look at the older demographic.

Even then we are the largest advertisers. So you can imagine if kid's were to become important then we would really have to up our spends. But the interesting part is that kid's involvement in influencing the purchase decision is growing. Now does that mean that they participate in the decision to buy a laundry powder? My guess is that they don't.

Thus, it's not really a major part of our media thinking but it's interesting because there is a lot of stuff happening in the kid's space.

You've shown a lot of enthusiasm about radio. But it seems HLL mostly uses AIR and not private station. How do you view private FM?
I see private FM as a very exciting space for us because suddenly with the addition of newer towns, viewers will have more choice in media. This viewer engagement will attract more advertising, so from our perspective which brand will resort to using radio will depend on the brand and consumer fit. Right now we are in the process of taking stock of radio advertising and as we see it increasing to about 300 stations, but more importantly the excitement is about the increase in towns.

Now whom we are in partnership with has to be strategically thought out, but we are in talks with several partners. The good part is that there are new and established players coming into the fray. Even now we are the largest advertisers on AIR and FM, this will only mean that our footprint will become broader within the radio space.

Media planners are hesitant about radio due to the lack of key differentiators, what are your views on that?
Somewhere a woman/man is being wooed and while people begin to analyze this space I think we will get on to the bus much faster. We have in the past invested in the medium and will continue to do so. We will not wait to see who emerges as different, as differentiators are what you create. You don't view TV the way you used to therefore, radio will also be consumed differently. I don't know what media agencies generally view this space, for us what is important is what we can do to it. Currently, we are holding our excitement.

Following Wheel Smart Shreemati and Rin Mera Star Super Star will AFP's be given greater importance going forward?
All our AFP's played out very well for us, Wheel was the top rated show on Doordarshan. Although, it may appear like something we mounted and happened to do well for us, but the truth is we were working on it for three years. In 2004, the germ of the idea began, 2005 we tested it on a smaller channel and 2006 we took it to DD. Our planning and research helped us get to where it is as the top rated show.

The challenge is that you have to combine the arithmetic of the brand, communication and commercial and get the trio to work. However, the effort required for AFP's is disproportionate. It calls for a genuine collaborated effort with the channel, the clients and the production house. It gives a new lens to the planning effort and it's the next practice.

We have been cautious with in-films as we don't really know how it pays back. It is one step higher than AFP in terms of collaborative effort, in fact it ends up being more of a 'punt' than TV.

Talking about the online space could you highlight what is currently being done with online marketing after Sunsilk Gang of Girls and Axe land?
We have got stuff in progress but not in the development stage yet. The Gang of Girls gave us better results that what we expected both from the returns and consumer engagement we got. The sheer numbers were amazing, we tracked all the measures and it appears the time spent by these girls was almost 11 to 14 minutes. We did it to get engagement rather than exposure and it was a collaborated effort with partners like Monster.com, Elle and Cosmopolitan. It went beyond just talking about hair to discussing everyday issues among friends, to have an extended conversation with the consumer. So both thematically and in terms of engagement it played out very well.

Also with Axe we did Axe Unlimited Academy and will roll out something along the lines shortly. So will we have all brands participate aggressively on the net? Probably no. But definitely our youth brands will, because it's really about redefining the role of engagement. Therefore for us the whole space of internet is going to grow very fast and it will grow through a combination of such websites and simultaneously through traditional web based advertising. The net allows a huge amount of interaction but it depends on how you exploit it.

How does this translate into sales?
This was a brand building effort, but of course everything that goes towards building a brand must translate into sales. But it is about driving brand preference and an alternate way of communication.

A big change is likely to be seen which is currently under the surface, but the in the coming years the numbers in terms of advertising will show that.

The only thing that we consider is the brand and the consumer, the media needs to fit into that, so if online would largely be urban, but this is also applied to the rural I-Shakti programme, however, net penetration is still restricted to urban India, but progressively it will spread.

Even the outdoor space is very interesting, however it's not being exploited sufficiently. Every time people travel, it's an opportunity for advertisers. In fact, among different forms of media there are definitely some that are really likely to rock!

Could you name three different media that you think will rock in 2007?
I think for the next two-three years radio will rock, maybe not in 2007 because lets not forget that print is some 1,000 crores (Rs 10 billion) and radio only some 100 crores. If I were to have a prognosis I believe that radio will really double, because it's just the sheer scale that cannot be ignored. But within this space there are also so many players, coupled with the lack of measurement at the moment will make it even more difficult, so who do you back, how do you know it works? Thus a half baked science gets applied. But the minute you put measurement, predictability and science behind it that will cause inflection, otherwise people will be cautious.

What will also make a big shift, whether it will rock financially I cannot say, but the whole business of in-store on-screen advertising, suddenly you will find them all over the place and therefore it will peel off mainstream advertising and then get evaluated analytically by agencies.

Even in the TV space, the whole area of Cas and DTH will keep the excitement alive. DTH is getting into rural space so that will be interesting. There is great action happening there as well, KBC 3 and others.

Another thing is that regional media is also getting more and more important across all genres, whether it has been Marathi, Bengali, Oriya and traditionally Telugu, Tamil and Kannada have been strong anyways.

We've talked conventional media and new media but HLL has always been a strong advocate of rural marketing? But the focus keeps shifting and after some time all talks of rural marketing die out. Can you give us an update on what has been happening on this front?
The biggest challenge for us is that a large part of India is still media dark. What that means is that television or print does not really reach there. Then there is the problem of infrastructure and literacy. Therefore from our perspective we've really tried to concentrate on on ground activation- demonstration, sampling and events.

While the problem of infrastructure, non motorable roads, etc. remains there is also a challenge of scalability. We've been active in the rural areas for a long time and progressively have increased our thrust in this area. The big change is of course in the scale. We have upped the scale in these initiatives.

We've got two-three programmes which we have been looking at for the last few years. One of them is Lifebuoy Swasthya Chetana- a rural communication programme around Lifebuoy that has touched over 130 million consumers across Bihar, UP and Rajasthan. Similarly, there is Project Shakti. The Shakti Vani is a programme that we started keeping in mind communication with rural consumers.

While Lifebuoy Swasthya Chetana is a brand specific programme, Shakti Vani cuts across all the brands to speak to the consumer. The action in rural India is all about being 'their type.'

Is there also a challenge of making these initiatives profitable? You have talked to us about scaling it up? Since you do talk about the challenges, how do you go about building your capabilities and expanding it?
The issue is not so much about profit although there is a worry of cost effectiveness. So when you know that there is a cost involved in physically being there which cannot always be done. When I say scalability, the challenge is to do with two things - one is to do with researches on ground.

If you want Western class communication to reach rural India, you need a full stream of resources which works down the line, is well trained and which understands what is being spoken about. The fact remains that the scope of the country is so vast and immense that no matter how much you do, it's never going to be enough. Despite this, I don't know any other company which does as much in rural marketing as we do.

We work with one agency on our rural initiatives - Ogilvy Outreach and have built a strong network through our vendors. I think over time we have built our capabilities in this segment. As for expanding this further, yes we would look into that as well. We are expanding in almost every sphere and rural marketing will come under that focus too.

If we could just talk about HLL brand and brand categories. You have largely spoken about brands in the health and personal care segment, in this respect has the push in the food division been milder?
We do have firm positions in beverages. In fact, we just re-launched Taj across a multimedia campaign. There is excitement in foods but the scale and salience is very different. It is largely to do with the category and not so much to with the brand itself. Our tea brands are the largest in the category but if you look at these brands in advertising terms they are not as active as the personal care. Inevitably you would see Lux, Lifebouy, Sunsilk, Surf, Rin as large media and advertising brands.

As opposed to the parent company, which has a strong presence in the food category, therefore would the recent global alignment following the inclusion of Unilever into the companies name, mean that there expertise in foods would be brought to India?
It's outside my remit to comment on that because that's a matter of corporate strategy and how the food units would grow and I can only comment on advertising. But in totality the investments in this space are as hot as personal care and it's growing as much. It is smaller in scale but as active.

So it is great that the advertisers are looking at World Cup. For us the larger worry is the movement of eyeballs from the general entertainment channels to the sports and news channels. Finally it's a question of checks and balances. Is this rupee spent worth it? Any advertiser would ask himself that before putting up his money. Otherwise it becomes like a punter's game.