India ad rev to grow 11.3% in 2014:Magna Global

10 Dec,2013

 

 

By A Correspondent

 

Indian media companies will see ad revenues growing by 11.3% next year with the internet again leading the growth at 31.4%, according to Magna Global’s annual advertising forecast for the year 2014.

 

The growth in television adspends will be 10.4%, while that for newspapers will be 8.8%. Magazine adspend growth will be 2.3% while OOH will be 12.1% and Radio at 11%. Cinema, given its lower base, will grow at 20%.

 

Last December, Magna Global had predicted an 8.7% growth for Indian adspends. This was revised in June this year to 7.8%. The growth for 2012-13, although based on its current estimates, is 7.8 percent. Magna Global is the strategic media unit of global media agency conglomerate IPG Mediabrands. IPG Mediabrands is headed by Shashi Sinha in India.

 

The economic environment remained weak throughout 2013 but is still expected to improve in 2014, especially in the developed world which has experienced four years of slow growth and stubborn unemployment, according to the IPG Mediabrands firm. As per the International Monetary Fund’s World Economic Outlook projections, India should re-accelerate at 5.1% following 3.8% in 2013. “That level of economic activity is not particularly impressive by historical standards but confidence indices keep improving and we believe advertising spending will reflect and amplify that economic trend,” said Venkatesh S, EVP, Director Intelligence, Magna Global, India.

 

Venkatesh added that the growth estimates of 7.8 per cent for 2012-13 are end-2013 estimates and he does not foresee any extreme changes.

 

 

Mobile share to total internet in adspends is 7.9%: Venkatesh S, EVP, Magna GlobalQ&A with Venkatesh S, EVP, Director Intelligence, Magna Global, India

 

The annual forecast made in December 2012 had your annual year-on-year growth forecast for India pegged at 8.7%. In June this year, it was revised to 7.8% which has been maintained in your year-ahead report. Since we haven’t yet closed December, do you think this growth of Jan-Dec 2013 will stay at 7.8%?

These are end-2013 estimates and we don’t foresee any extreme change in growth rates

 

Any noteworthy changes in your estimate made in Dec 2012 and June 2013 to what it is now?

Newspaper and Magazine growth rates have been revised downwards compared to December forecast and the growth rates are pretty the same as it was in June 2013.

 

By your estimates now, will India be among the Top 10 markets five years from now? In December 2012, your report said India would be among the Top 10 markets in the year 2017. That was not the case when the mid-2013 numbers. What is the status as of now?

Following a significant slowdown and given the current market environment, long-term forecast was revised downwards and is not in a hurry to be part of the Top 10 anytime soon. Currently India is the 13th largest advertising market and is forecast to retain its position in 2018.

 

How does Indian adspend compare with our neighbours, BRIC countries and internationally?

The adspend/capita in APAC varies significantly from $558 in Australia to $2 in Pakistan. While India adspend/capita is $5, its BRIC peers are way above – China $29, Russia $67 and Brazil is on par with the global average of $84. India is slightly in the high growth potential zone.

 

Internet doesn’t seem to be growing at a significant pace – it continues to hover around 30-odd percent. Comments?

India has been growing at a phenomenal rate compared to the global average (+15.5%) and also within APAC (+22.4%). Having said this, mobile internet is promising and will overtake desktop internet. However lots of questions need to be answered to see this medium unfold its potential.

 

What would you say is the contribution of mobile as against the whole of the internet.

Mobile share to total internet is 7.9%.

 

And how does this compare with developed economies and BRIC countries?

While BRIC countries are averaging 9%, developed economy is 15%

 

Last December, you had predicted a 4.2 percent growth in the magazine sector. That is now 2.3 percent. Do you think there is a trend out there and we could magazines degrow even further?

A small base of loyalty is a major deterrent for magazine publishers and advertisers, though language magazines still hold ground locally. Staying relevant to digital audience and retaining revenue streams is a challenge.

 

Given an election year, shouldn’t we have seen a greater growth for newspapers?

In 2012, the category saw a lower single digit growth rate. Our estimate for 2013 including political advertising is 6.0% and 8.7% in 2014.

 

 

 

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