Drift to digital disrupts media business model

Conventional media and the advertising industry which sustained Nepal’s free press are being disrupted by competition from the Internet, and the economic slump, and it is now a case of the survival of the nimblest.

Newspapers, radio stations, and television networks are navigating uncharted territory as the digital revolution reshapes how Nepalis consume information and entertainment. Even digital portals that started in the past decade are now in trouble because most follow the same business model as legacy media. 

The morning newspaper which used to be the primary source of information to find out what happened yesterday was gradually replaced by evening tv news, FM radio bulletins, and now social media platforms.

Many tech-savvy Nepalis have never even touched a printed newspaper or magazine, and most from the younger generation cannot remember the last time they did so. Traditional print media's readership and advertising income have therefore continued to plummet, thereby undermining its check-and-balance role in Nepal’s democracy.

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With the ability to simultaneously consume and contribute to news, Facebook, Twitter, Instagram and lately TikTok have emerged as significant disruptors. Social media's real-time functionality has broken down boundaries, democratised information sharing, and amplified the voices of specific groups and individuals. The rise of citizen journalism has also challenged traditional media's authority and gatekeeping function.

Thanks to the growth of streaming services, the television and film industries are no longer constrained by strict timetables. Content on demand is made possible by services like Netflix, Amazon Prime Video, and Hulu, and the ease and low cost of streaming services have transformed customer behaviour. 

One of the most significant consequences of the decline of traditional media is faced by the advertising industry dealing with shrinking budgets from brand promoters, and that shrank further after the Supreme Court ban on alcohol advertising in the print media last year.

The prohibition of liquor advertisements has exacerbated the crisis, and left a void in revenue not just for the agencies but also for the media where the ads were placed.

Agencies have shifted a sizable percentage of their advertising budget to digital platforms, and have been compelled by this transition to reconsider conventional strategies to service portfolios to include influencer marketing, social media campaigns, digital marketing, and content development.

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One advertising agency that has adapted well to the digital ecosystem is Prismark. Its executive director Pankaj Pradhan says, “Data-driven strategies have transformed the way we service clients. The day when advertising was only based on the audience's understanding or intuition and presumption is long gone.” 

Agencies are adapting by expanding their services, experimenting with new channels, and looking for customers in non-alcohol areas, including FMCG, healthcare, and technology, to compensate for the income loss. 

“We have managed to adapt by focusing not just on selling advertising space but on effectively reaching various audience profiles and segments,” explains Ujaya Shakya of Outreach Nepal. “Our Nepal has a predominantly youthful population, with over 70% of the audience below 35. These young individuals often possess ambitions surpassing our country's opportunities. Many aspire to study or work abroad, and thanks to the internet and media, they now have access to global information and exposure.”

Nepali youth also share a common longing to understand their cultural heritage, identity and a sense of belonging. Therefore, creating campaign ideas that integrate consumer insights with local culture becomes crucial, cutting through the noise to provide meaningful solutions to marketing challenges that hold value for the end consumer, says Shakya, who strives for what he calls “Nepalisation”.

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This approach allows Outreach Nepal greater audience engagement and that resonates with their combined desire for global exposure and a connection to their roots. Shakya has managed to thrive by aligning marketing strategy with the aspirations and cultural values of Nepalis. 

Since liquor companies were a significant contributor to advertising revenue, the ban also affected creativity, prompting organisations to develop new strategies to address the needs of other sectors of the economy. 

But to reach new consumers, the agencies had to change their methods, which necessitated substantial study and adaptation. Nepal does not presently have a policy on surrogate ads in the news format, which makes things complicated for the advertising industry as they look for other options for product placement at events. 

If alcohol advertising was banned by the Supreme Court on health grounds, some have said promoting carbonated soft drinks with high sugar content, or even diet drinks that contain cancer-causing aspartame, and junk processed foods should also be restricted.

Read aslo: "Media competition will ensure quality advertising", Nepali Times

“The blanket ban on alcohol advertising lacks clarity on what constitutes adverse effects and who can determine which products fall under this category,” says Ahimsa Yonjan from TBWA/Benchmark Nepal. “Fizzy drinks have high sugar content and can contribute to obesity, type 2 diabetes, metabolic syndrome, and inflammatory diseases. Is that not a health hazard?”

What would have been better would be specific rules for marketing and product promotion rather than an overall ban. Such laws would strike a compromise, allowing customers the freedom of choice while protecting them from inaccurate or misleading information.

Advertisements exist so businesses can promote their brands, and the revenue from them sustains the media. It is a transparent transaction, since readers, viewers and listeners are all aware of who is promoting what. 

Like advertising agencies, advertisers have also changed their brand promotion strategy. For example, Hyundai in Nepal now prioritises online platforms. Says Hyundai’s Sandeep Sharma: “We now focus on digital media to provide comprehensive coverage rather than instant, short-lived updates since our target audience are those with decision-making power within families.”

By synchronising its advertising with feature stories, Hyundai wants to reach a wider audience and ensure its messaging remains relevant over time. Sharma admits that even the older generation is now increasingly relying on Facebook and not newspapers and magazines. 

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Hyundai's budget for tv commercials has also gone down in Nepal because its target demographic is no longer watching television. Government tax adjustments in the budget may also harm Hyundai's marketing efforts in the electric vehicle segment. 

Ghorahi Cement, on the other hand, has thrived because it has kept up its below-the-line (BTL) advertising intact, demonstrating the resilience of its marketing methods even during difficult economic times. “Our success rests in identifying the distinctive traits of our target market,” says Ghorahi’s Pratik Adhikari. “The people of Nepal continue to build houses when they are ready to do so, contradicting traditional market predictions.”

This realisation led the business to use a marketing approach that heavily relies on sides of buses, cabs, houses and non-traditional media. By posting inscriptions on solar panel lights in Butwal, for example, Ghorahi has supported attempts to preserve wildlife. The company's brand image is further improved by this strategy, which increases awareness and appeals to the ecologically sensitive public.

Despite the growing popularity of digital advertising platforms, therefore, Ghorahi Cement adheres to specific market dynamics and employs tactics that appeal to its target market. This has helped the company establish a market niche. 

At a time when internet advertising is king, this is proof of the potency of cutting-edge marketing that transcends business as usual. Hyundai, Ghorahi and others are examples of companies that investigate alternative advertising strategies and customise them to the unique requirements of their target audiences by continuing to prosper in difficult economic times.

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Jharana Khanal is a student at Kathmandu University School of Law researching the entertainment industry and media in Nepal.