RACE FOR SPACE ( Khaleej Times v Gulf News - Some marketing facts)

RACE FOR SPACE (Khaleej Times v Gulf News)

Of late, there was huge media cry to find out who dominates the UAE news world. The focus was predominantly shifted to two major players in this region. Gulf News (GN) is the proclaimed leader with high readership and circulation figures. But things have changed ever since. Challenger Khaleej Times (KT) started giving Gulf News run for their money and territory.

To understand more, let’s dig the history and try to unearth some hidden facts. Khaleej Times is the first ever English daily to publish from UAE. It started in the year 1978 and was owned by Galadhari Brothers. Another publishing group Gulf News, formed a while later, took no time to sense the opportunity and started their’ own newspaper from the country. Two groups were in fact contemporaries if we apply the timeline principle here.

Market did not react favorably at the beginning. For various reasons, KT took the absolute dominance in the mind of readers and was the designated winner. GN was struggling to get customers at that point of the time. In one of the high profile event in 1984, Al Nasr Publications, a prominent business group took over the management of GN. New machinery, new technology and a brand new marketing team worked round the clock to put GN at the top of the mind of the intended readers. The formula worked pretty well. Gulf News attained the top spot in short time by clinching the maximum readers in UAE and gulf.  

Ever since they tasted the victory, there was no look back. It is official now – as per the available stats GN claims a print run of 109 thousand per day in UAE. Khaleej Times was no were near to it. Guessing game continued for a while and the media estimated the KT figures below 50 thousand, not even half of GN's circulation.

Fast forward 2011 - business took an about turn. Quite a few happenings in KT have changed the game overnight. New rules were set in. Numbers started changing in favor of KT. GN subscription figures were stagnant or lost significantly against the overall circulation growth of KT.  Khaleej Times once again rose to fame, this time, for achieving the highest increase in subscribers for the year.

What went in favor for KT? How GN lost its subscribers to the marketing efforts of KT? Let’s get into the gut of the story. Ever since KT began loosing its market share, there were concerted efforts from the management to revisit its strategic plans. Government of Dubai through its investment arm, a holding company, acquired the majority of the shares of the newspaper. The management got revamped and editors were changed. Mr.Rahul Sharma of Hindustan Times fame was given the charge of chief editor. The company also appointed Mr.Didier Brun, the then VP of International Herald Tribune, as CEO. The marketing department was brains stormed and urged to devise a new strategy to grab the readership.

 Media analysts and marketers state many reasons for this turnaround but I personally feel the below FIVE STRATEGIES adopted by KT has killed the competition at point blank.

 

STRATEGY 1

FOCUS ON READERSHIP THAN PER DAY CIRCULATION

News paper companies globally give prominence to per day circulation numbers than the total readership. The water tight business model followed by these companies in relation to their revenue earning capability always insists to abide by this principle. Traditionally, news papers earn 60% - 70% of their revenue from advertising and the rest 30% - 40% from daily sales and annual subscriptions. Advertisers used to focus on per day circulation, but this tread had witnessed a dramatic change. Marketers in various industries started asking for split up details of the newspaper reach in different segments. Mass marketing is passé. Targeted distribution is the new mantra. Anymore it’s not the total circulation number which matter most, but the actual reachable figures. It’s the readership figures now marketers weigh before they advertise their products or insist media guys to do so as part of their media plan. KT got it right, and they kept this as one of their prime strategy to get the mind share of the prospects. The underlying principle is - Circulation numbers automatically increases when readership improves. KT firmly believed on this and it paid off. 

GN always focused on circulation numbers rather than readership and they still wonder what is so important in readership figures if the per day circulation don’t match up and collections don’t click. Only after they started losing subscribers, it seems vital  for them to look up in the readership area and I presume they are serious. They better.....

 

STRATEGY 2

COMMODITIZE THE PRODUCT

This is unheard of in the newspaper industry despite it has some of the features of a mass product. In fact, newspapers cannot be classified as one such. But this has become a ‘food for thought’ line for those inside the KT, especially the marketing bench. This thought process has made the marketing to believe that a product can only be successful if it is made available at all major centers. Soon the product found its place in all educational institutions, gas stations, malls, libraries, ministries and all places where public show up. There were distribution ties up with various agencies, supermarkets, book shops corporate and institutional centers. The idea worked well and the visibility soared to new heights. People started noticing this new trend and in fact bought many copies from these centers to get the real feel of the news, supposedly, to know the another version of the story. Once again the readership increased significantly and the circulation numbers followed. 

On the other hand, GN were known for monetizing every opportunity and the revenue per copy was the most important thing for the company. To see the product from the above angle was something they could not digest.

  

STRATEGY 3

NEW DESIGN – SLIM AND TALL VERSION

It was a jaw drop moment for the readers to see a slim and tall version of the newspaper on their door steps and news stands. KT has become the first newspaper to adopt this new standard in size ( 6 column) & design keeping in mind of the 'ease of reading' and 'handling side' of the news paper. It has followed the foot steps of some of the international newspapers here. The new version showed increased acceptance from the public and readers alike. There is no mystery that the numbers started showed up in the board- Circulation almost doubled.

GN still believe in 8 column newspaper and the marketing sees no threat and still publish the old version but with some design change. What they don’t realize is that the new gen readers prefer concise and capsule news in a newspaper which is manageable and easy to handle while reading on the go or stationary.

STRATEGY 4

STRATEGIC TIE UP WITH IHT (International Herald Tribune)

IHT, The international version of New York Times is a global print winner in the race for space. The strategic tie up of KT with the IHT has increased the acceptance level of the newspaper in the minds of readers. A global touch is always welcomed. People started perceiving that the content is customized to world standards along with the local news.

 GN don’t believe in any strategic tie ups, but interested only in distribution tie ups for some reputed magazines and EXPAT specific language news papers like Malayala Manorama in UAE.

STRATEGY 5

COMPLETE REACH OUT - UNBELIEVABLE PROMOTION OFFERS

KT has come up with some unbelievable subscription offers last year. Pay AED 400 and get AED 250 voucher of DG Sharaf, AED 100 coupon for Baskin Robins and AED 100 coupon which can be redeemed at Yellow Hat showrooms in UAE. You pay 400 Dhs for subscription and get back 500 dhs in return... Wow... In short, this translates in accounting language to free bonus earning - Free newspaper subscription for one year and a bonus of AED 100 !!!

 

The grapevine is that KT now commands a widespread circulation in the market and the revenues have shot up to a meteoric level. No of advertisers have increased dramatically. Ad revenues showed multifold increase from all quarters. International brands like McDonalds entered into long term contracts with KT to publish their advertisements. A new ad item like full cover page (before the actual front page of the newspaper) has become an all time success ad item. Marketing has reaped the benefits. New strategy paid off. GN may be still wondering where their clients have gone hiding.

Let the guessing game continue……

Antony Konnoth, Dubai.