India is set for a publishing outsourcing windfall
Bangalore, India - January 12, 2010
Changing media consumption habits of people in the West coupled with the spiraling cost of ink and newsprint has made newspaper and magazine firms cost-sensitive, driving the growth for publishing outsourcing.
Changing media consumption habits of people in the West coupled with the spiraling cost of ink and newsprint has made newspaper and magazine firms cost-sensitive, driving the growth for publishing outsourcing.
India, which has a strong domestic publishing industry, is poised to be one of the major publishing outsourcing destinations in the coming decade.
According to ValueNotes Research, the total offshoring of publishing stood at $780 million in 2008, of which India had the largest share -- 84 per cent -- followed by Philippines (14 per cent) and Vietnam/China/Sri Lanka (2 per cent).
The research says that offshoring in publishing will grow at a rate of 15 per cent till 2010 and 20 per cent per annum thereafter, till 2012.
Capitalising on the opportunity to ride the publishing outsourcing wave is Bengaluru headquartered company 2Adpro Media Solutions, founded in 2006 by a group of seasoned executives from the media world that has grown from a dozen plus employees to a 410 strong team and a 100 plus customers today.
The company is one of the big three -- the other two being Affinity Express in Pune and Express KCS in Gurgaon -- in the offshore creative services space, which specialises in advertising and marketing design and production.
"Our customers, of which, 80 per cent are newspapers, get access to a virtual creative studio, when they work with us. We produce on an average around 7,000 ads per week for both print and online media with very quick turnaround time, sometimes in 15-20 minutes," says Pervez Sikora, COO of 2Adpro Media Solutions.
Sikora worked with many media companies and it was during his last stint with The Los Angeles Times as its director of Advertising Technology that he realised the huge outsourcing opportunity in design and production of ads.
The advertising spend on creative content for print display ads alone is upwards of $1 billion in the US.
"While I set up systems for sales force automation, space booking/rating, production, pagination, classified ads, retails ads, delivery for web, asset management etc., I was also in charge of driving the company's offshoring strategy which was initiated primarily to reduce costs. After weighing the pros and cons, it was decided that LA Times would cut major costs if the company outsourced some of its IT functions (which TCS handles) as well as advertising production, which Affinity Express handled for us," recalls Pervez.
With offices in Chennai, Bengaluru and the US, 2Adpro Media Solutions, which started with a seed funding of $1million in 2006 and received a VC funding of $2.5 million in 2008, has set itself a conservative target of achieving $30 million by 2012.
"We will not be able to achieve great growth rates through organic growth but will have to look at acquisitions in the UK and in India, and try to grow our onshore presence. We will continue to offer a combination of innovative technology, adaptive processes, and a utility based pricing model, along with our on-demand global sourcing model which provides customers with the flexibility and adaptability they need," says Pervez.
Publishing outsourcing is still nascent stages, notes Vivek Shenoy, analyst of Publishing at ValueNotes Outsourcing Practice.
"While a lot of publishing work in the scientific, technical, medical, educational and legal domains are being outsourced to India currently, newspapers and magazines in the US have not yet opened up to take advantage of Indian service providers fully," he says.
"But the future looks bright for this small clutch of service providers because cost cutting pressures in the immediate future will drive them to outsource to countries such as India, Philippines, China, among others.
Moreover, India has a strong domestic publishing industry and the requisite talent pool in place, making it an attractive destination for publishing outsourcing," he notes.