Digitization will help broadcast economics: ZenithOptimedia forecast

11 Dec,2013


By A Correspondent


This is the season for annual adspend forecasts and global media agency network ZenithOptimedia unveiled its Advertising Expenditure Forecasts predicting a year-on-year growth in ad spends in India of 11.5 per cent in 2014. The growth number for 2013 (over 2012) is 8 percent. The global ad expenditure growth from 3.6% in 2013 to 5.3% in 2014.


Anupriya Acharya

Said Anupriya Acharya, Group CEO, India, ZenithOptimedia group: “Our outlook for 2014 is cautious, though we expect the growth to happen mid-year onwards.” According to Ms Acharya, there appears to be an upswing in the mood since the Assembly election results on Sunday. Added Satyajit Sen, CEO, India, ZenithOptimedia: “All policy-making has been in a limbo, but we expect a spurt in the second half with digitization happening in full-swing.”


According to the agency’s research team, 2013 has “overall been a turbulent year for the media industry”. “In March/April we saw changes to the TAM panel following the second stage of the digitization process (of which more underneath), followed by changes in the TAM data reporting period from a weekly to a monthly format and finally the flip-flopping over the new 10+2 advertising regulations (a cap on advertising minutage set at 10 minutes of advertising and 2 minutes of programme promotion per hour), which was supposed to take effect from Oct 2013 onwards. However, some channels have been slow to comply.”


“Growth will be driven by inflation measures and pricing actions due to the 10+2 advertising regulations, as the restriction of supply will lead to rising prices,” it notes. “All of which means that advertisers are looking seriously at redistributing budgets to other media. On the whole, quality of content will improve on TV and we expect a consequent ratings boost thanks to 10+2 regulation. The change comes at a cost, however. There was a two-week stand-off between TAM, broadcasters and advertisers when data reporting formats were in flux. During this period, the top seven advertisers pulled their ad spots from all TV channels.”


The ZenithOptimedia research notes that digitization will help the broadcast sector: “Following the second phase of digitization of distribution in Q1 2013 in 38 cities, the TV broadcast industry has achieved approximately 77% digitization and expects to reach 100% within the next two years.” The report adds that even though viewership ratings have been impacted, in the long term, digitization is expected to improve broadcast economics significantly.


Internationally, the research has been bullish on adspends in the mobile sector. Mobile is going to take off big time and has already crossed television in terms of number of units, said Ms Acharya. “The internet consumption is going to increasing on the mobile and even though the smartphone number is not very high, it’s rising rapidly.”


“The increase in mobile phone connections continues to drive growth of mobile internet penetration in India,” notes the study. “Cheaper mobile handsets and affordable mobile data packages are helping increase content downloads, and millions of users are engaged with wireless internet on a daily basis. FM Radio listenership is rising and it is a key feature used by mobile phone brands to sell handsets,” the report adds.


On activation and BTL, the report says: “Along with changing lifestyles and the emergence of modern trade and malls in India, there has been an increase in consumption of outdoor advertising. Brands are keen to connect with consumers via experience zones and activations to ensure greater recall and amplification of brand values.


Activation/Events are becoming more and more of a key offering in the radio and print channels. Live Music Events/Festivals have been successful in attracting widespread audience and engaging youth across key cities. Hand in hand with proliferation has come the challenge of fragmentation among audiences. Hence, advertisers are increasing the number of touchpoints to cater to addressable audiences and are selecting media beyond TV, print and radio.”


Government advertising spend has begun ramping up as a precursor to the 2014 general elections, the report adds even as the final quarter of 2013 has “seen lower levels of investment than usual because of the soft economic environment”




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