world newspaper congress 11: session opportunities, ravi dhariwal
TRANSCRIPT
63rd WORLD NEWSPAPER CONGRESS
Session: Opportunities Title: Building Brands’ CapitalSpeaker: Ravi Dhariwal
Vienna, Reed Messe Wien
Mark your calendar
64th WORLD NEWSPAPER CONGRESS19th WORLD EDITORS FORUM
www.wan-ifra.org/kiev2012
Building Brands’ CapitalPartnering Entrepreneurs
Ravi DhariwalTHE TIMES OF INDIA
India: Prospect
US UK China India
0,47%0,54%
0,95%
1,34%Advertising Spends:
GDP ratio 2009
Source: KPMG-FICCI Frames 2009
India: Advertising Prospect
• Even established companies under-advertiseo < 5% of listed companies
spending 10%+ of revenue on advertising
• New entrepreneurs cash strapped
Source: CMIE
• TOI provides advertising & strategic input
• Shares business risksBrandCapital
• Preserves Cash
Brand Capital - Addressing the Paradox
Need for a brand
Limited Resources.
Business enterprise
Multimedia Platforms : National
Largest TV News Company
Largest Out-Of-Home Company
Among Top 5 Indian Internet Cos.
30% Share of Radio Ad Spend
33% Share of Print Ad Spend
22% Share of Overall Ad Spend
Types of Deal Structures
Equity Structure– 3-5 years of ad spends : Exchanged for Equity
Asset Structure– 2-3 years of ad spends: Exchanged for Assets
Performance Contracts Structure– 1-2 years of ad spends : Performance Based
Business Structure I – Equity Listed
Brand Capital Deal
33% in cash“Pay as you go"
with every ad
67% in equity
7
Business Structure II – Real Estate
Brand Capital Deal
33% in cash“Pay as you go"
with every ad
67% in real estate asset
8
Business Structure III – Numerator
Brand Capital Deal
60% in cash“Pay as you go"
with every ad
40% performance
-linked
9
Role of Brand Capital
*Indicative ratios
Strategic Finance Advice
Strategic Marketing Direction
Brand Finance
0% 13% 25% 38% 50%
50%
33%
17%
Contribution*
Challenges• Valuing equity of unlisted companies
o Promoters high on expectationso Few benchmark transactionso Many PE funds, too few companies
• Promoters reluctance to part with equityo Not comfortable with dilutiono Equity most expensive funding
• Exit routes of unlisted companieso Low demand for unlisted companieso IPO process stretched on implementation time
• Corporate governance of unlisted companies o Promoters exposed to external investors for the first timeo Corporate governance standards not up to speed
www.brandcapital.co.in 12
Many Brands – One Brand Capital
Category with players like P&G and J&J, 99% ad spends in TV
Case Studies: She
She Comfort is now ranked # 3
Case Studies: MCX
Pitted against well-established first mover
MCX is now India’s #1 &Asia’s #4 Derivatives
Case Studies: Thyrocare
Start-up in a low-involvement, no advertisement category
Case Studies: Big Bazaar
Heavy competition, high investment category
Case Studies: Mercedes Benz
Growing segment, new entrants
Brand Capital – Scale
• Portfolio 350+ companies with deal value of US$ 1 billion
• Contributed between 15% of total BCCL ad revenue over the last 4 years
• Proven success stories leading to repeat deals
Investments by Industry
19
Thank Youhttp://brandcapital.co.in/
Please log on to the ‘Code of Conduct’ section on our website for details on our self regulatory policies.
This presentation & ideas is the sole property of Brand Capital, a division of Bennett Coleman & Co. Ltd. It is solely for information purposes. No part of it may otherwise be reproduced, modified, circulated, or disclosed without Brand Capital's prior written consent.