What is the real size of Indian Ad Industry?

20 Feb,2017

 

By Indrani Sen

Last week was exciting for the advertising and media industry as the two major reports on industry Adex were released on two consecutive days. GroupM released its ‘This Year Next Year’(TYNY) 2017 report on February 14 followed by the release of ‘Pitch Madison Advertising Report’(PMAR) 2017 by Madison on February 15. In the last few days, both the reports have been published and analysed in the business newspapers and websites, leaving hardly any scope for adding any comment on the same.

As usual there is a difference between the two projections, this time it is of around Rs 5000 crore. The biannual report on advertising expenditure TYNY 2017 has forecast India’s advertising investment to reach an estimated Rs 61,204 crore in 2017 based on a growth rate of 10% over 2016. On the other hand, PMAR 2017 has projected a growth of 13.5% in 2017 over 2016 and has estimated the size of the industry to reach Rs 56,152 crore.

According to Sam Balsara, AdEx dropped by Rs 1650 crore in the last two months of 2016 after demonetisation and as a result, the industry adspends narrowly missed the mark of crossing Rs 50,000 crore. On the other hand, the GroupM report, Indian advertising industry clocked Rs 49,758 crore in 2015 and crossed the Rs 50,000 crore mark comfortably in 2016 by scoring Rs 55,671 crores. Madison estimated Indian adspends as Rs 43,991 crores in 2015, Rs 49,480 in 2016 and has projected Rs 56,152 crore in 2017. The difference, between the two sets of estimates, has been hovering between Rs 5000 to Rs 6000 crore, which is not a small amount.

If we compare the two sets of estimates by medium, we find that the major difference lies in the estimates of TV advertising expenditure, which is bit surprising as TV AdEx is very well-documented. Is there a difference in the way the two estimates are drawn up which leads to a gap of almost Rs 6000 crores between the estimated TV advertising expenditures?

 

PMAR has shown more favourable estimates for Print and Outdoor than TYNY, while TYNY estimates for Radio and Cinema are higher than the estimates of PMAO. It is interesting to note that for Digital medium, the two estimates ran neck-and-neck for 2016 and are quite close for 2017.

GroupM Report mentions that Media Adex reported do not include:

  • TV – special inventory like astons, L-bands, tickers, etc
  • Print – tender notices, appointments, classifieds/ matrimonial
  • Radio – activation spends
  • Digital – ad spends by SME segment
  • Outdoor – wall painting

The above leads us to conclude that the numbers shown in the TYNY for the above five media would be actually higher than their estimations, particularly for Radio, where activation/ events tied up with digital has become a major source of earning for the FM radio stations.

The Pitch Madison Advertising Report does not mention about the ad expenditures which are not covered in the report, but we can assume that Madison also has not covered the above expenditures which are not included in Media AdEx in their report.

So, what is the real size of the Indian Ad Industry? Are we yet to cross the Rs 50,000 crore mark or did we cross it last year?

 

Indrani Sen is a media services veteran, having worked with JWT, later Mindshare and then with Emami. In recent years, she is an independent consultant and academic. She is Adjunct Professor incharge of the Media Management programme at the Symbiosis Institute of Media & Communication, Pune. The views expressed here are her own.

 

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