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Tag: TYNY

  • Adex 17: TV to contribute 45pc, FTA to aid 8pc growth rate, says GroupM

    MUMBAI: GroupM, one of the leading global media management investment conglomerates, has released its biannual advertising expenditure futures report ‘This Year Next Year’ (TYNY) 2017, forecasting India’s advertising investment to reach an estimated Rs.61,204 crores in 2017. This represents a growth of 10 per cent for the calendar year 2017 over the corresponding period in 2016.

    As per GroupM, the ad spending in 2016 was Rs. 55,671 crore. Even though the year began on a very optimistic note, the overall Adex took a downturn due to lower than expected ad spend growth from sectors like FMCG, traditional retail, telecom and sporadic spending in categories like Ecommerce. In the Januray-October period itself the Adex was growing at a lower trajectory than forecast. Furthermore, demonetization in the last quarter had a negative impact of about 2 per cent on the total Adex in 2016.

    Speaking on the TYNY 2017 report, GroupM South Asia CEO CVL Srinivas said, “Despite a volatile 2016, we are estimating advertising expenditure growth at 10 per cent in 2017. The first quarter will give a slow start to the year, with the market picking up from March-April, fueled by a stable recovery process post demonetization. Sectors that are contributing to this positive trajectory include Auto, Media and e-Wallets. In addition Government and Political parties will increase spending with elections in several states this year.” Explaining the media scenario, he added. “Digital is leading the Adex growth with a 30 per cent growth, while TV continues to be the largest medium in the mix. Print continues to grow at a stable rate of 4.5 per cent and is still the second largest medium in the Adex.”

    Looking at the advertising industry worldwide, GroupM estimates the global advertising expenditure (adex) to grow by 4.4 per cent and Asia-Pacific to grow by 6.3 per cent. With an estimated adex growth of 10 per cent, India remains one of the fastest growing ad markets globally. While 80 per cent of incremental ad spend growth in major markets comes from digital media, in India the numbers are more evenly split between traditional and digital media. Digital media accounts for about 40 per cent of the incremental ad spend growth.

    The Indian advertising expenditure growth rate is also in line with the revised GDP forecast; India’s GDP is estimated to grow between 6.5 to 7.5 per cent. This will be led by low interest rates, sustained urban demand and the impact of key policy reforms. Over the last seven years, ADEX to GDP growth ratio has been between 1.5-2X, and 2017 will be no exception.

    GroupM also elaborated on the major media trends that will emerge in the Indian advertising industry. These include trends in sports programming, content, data and digital media. Globally, GroupM has been leading the conversation on viewability with brands and partners. Taking this program forward, chief growth officer Lakshmi Narashimhan, explained the importance of viewability, “As India matures as a digital advertising market, transparency and trust are critical for higher adoption of the medium. Those adopting high viewability standards will be able to differentiate themselves on quality parameters. Once implemented, platform choice and pricing will depend on viewability scores.”

    GroupM estimates the Digital Adex to grow by 30 per cent in 2017 to Rs. 9,490 crore. The digital Adex is estimated to take a 15.5 per cent share of the total Adex this year. There will be a high emphasis on viewability metrics and outcome based optimization. Ad spends will grow on OTT platforms, as internet speeds improve and catch up TV gains ground.

    2017 is estimated to be a modest year for newspapers with 4.5 per cent growth. The increase in ad spends expected from print heavy sectors like Auto, BFSI, e-wallets will contribute to this growth. Vernacular and regional newspapers will see a higher growth rate.

    Television continues to be the largest medium contributing to the Adex with close to 45 per cent share. This year, the growth rate for TV is 8 per cent, with ‘Free To Air’ channels adding more inventory, and pure HD content gaining ground. The market will also see a consolidation of niche channels.

    While Radio is expected to grow at a little over 10 per cent, there is scope for the medium to pick up as the Phase 3 rollout is completed in 2017. Higher growth is expected as stations will see the supply impact of the full year.

    Other media such as OOH will witness good traction from sectors addressing rural audience and premium niche audience. As per the trend in recent years, Cinema advertising will grow at a high double digit rate of 20 per cent. Cinema consolidation has led to investments in infrastructure, this coupled with the growing acceptance of premium Indian and Hollywood content by advertisers augurs well for the medium.

    This Year, Next Year, is part of GroupM’s media and marketing forecasting series drawn from data supplied by holding company WPP’s worldwide resources in advertising, public relations, market research, and specialist communications. The TYNY report is the most comprehensive understanding of the estimated media spends by advertisers in the current year. It also highlights some of the industry sectors that will have a major effect on advertising spends across media.

  • 2014 was the year of innovations in digital advertising: CVL Srinivas

    2014 was the year of innovations in digital advertising: CVL Srinivas

    From a media perspective 2013 was the year of the perfect storm and something tells me that there is lots waiting to unfold in 2015.  Was 2014 the lull before another storm? The major event that dominated 2014 was of course the general election and the wave of optimism and hope that has been spreading ever since the new government came to power. Not only was this the most bitterly fought election from a media standpoint; it was the most well orchestrated win combining strategy with clever tactics.  Advertising was only one part of the strategy. 2014 will go down in history as the year that gave a new meaning to marketing of political parties. We now realise that the general election was only the beginning. With a slew of schemes, clever branding and initiatives that touch the common man, the government is turning out to be a very savvy marketer. One hopes the product lives up to its promise.

    The extension granted to TV digitisation was a bit of a dampener for the broadcast sector. There has been some indication that the phase III licensing for radio will soon go through. Meanwhile, India became the second biggest market for Facebook, the overall Internet penetration crossed 200 million and mobile Internet became the most dominant force of change. And yet we have bandwidth issues, call drops and sometimes feel like going back to the old faithful ‘landline’.  As a nation we need to play catch up in digital infrastructure and going forward I hope this is given the highest priority.

    As for the advertising industry, 2014 saw a 12.5 per cent growth (as per GroupM TYNY estimates) as against a global ad spend growth of 4.5 per cent. Apart from political advertising, if there was one sector that stood out was ecommerce. This sector will end up with more than 50 per cent growth over last year closing the year at Rs 2500 crore of ad spend. The upsurge in this sector is expected to continue. FMCG (which remains by far the biggest sector in terms of ad-spend contributing about a third of total advertising) continued to invest in advertising despite supply side pressures, poor volume growth and an uncertain monsoon season. We expect FMCG to end the year with 12-14 per cent growth. Auto has seen a revival both in terms of sales and ad spends. The sector is expected to see a 15-17 per cent ad spend growth in 2014. With petrol/diesel prices coming down, we expect more action in the months to come. Telecom brands are back after a lull, adding to the overall positive trend. All in all it was a good year, although anything less than 15 per cent ad spend growth still seems low for our market. As expected digital advertising grew at 35 per cent, while TV continued to do well with approximately 15 per cent growth. Regional language dailies helped grow the print sector. Cinema turned out to be the dark horse, with 25 per cent growth though on a relatively small base. Unlike the past few years, we had a clear blip during the festive season this year across all media.

    2014 saw a great deal of innovation in digital media advertising. GroupM and our agencies have been at the forefront of many exciting developments. Digital video has emerged as one of the biggest growth drivers of digital ad spend. Mashup, our digital video content unit has seen a lot of traction, we have made over 1500 pieces of digital video content in the past year. Across the industry, we saw many memorable campaigns launched first on digital media. More brands have taken to social media platforms to keep the conversation going, social listening is emerging as a key input for advertising and media planning.  We have worked with clients (like Nestle) to establish social command centers that have given our media and content planners real time insights. Mobile as a medium continues to grow and will soon account for nearly 20 per cent of the digital ad spend. Madhouse is our mobile center of excellence that is now in its third year of operation. Another emerging trend is audience planning, where digital inventory is combined with data to ensure better ROI for brands. GroupM’s Xaxis is a platform that is at the forefront of innovation in this space.

    We have lots to look forward to in 2015 including the ICC Cricket World Cup.

    Here’s wishing you all a Very Happy New Year.

    (These are purely personal views of GroupM south Asia CEO CVL Srinivas and indiantelevision.com does not necessarily subscribe to these views.)