GroupM estimates: TV degrows, Digital, print grow

11 Feb,2014


By Rishi Vora


At the launch of GroupM’s This Year Next Year (TYNY) Report  2014,  chief executive officer CVL Srinivas, while presenting the report to a media gathering in Mumbai, stressed on the media agency’s renewed focus on digital, and the need for a change in approach and mindset in order to be relevant with the changing business scenario.


Mr Srinivas, of course, stated that in the context of GroupM’s advertising expenditure (AdEx) 2014 where digital is the fastest growing medium with a 35 per cent growth rate, followed by TV with an estimated growth rate of 12 per cent. It may be noted that TV’s growth has reduced from 13.6 per cent in 2013 to 12 per cent in 2014.


Sector – wise growth



With general elections and 5 state elections on the anvil, government spending and political party election spending adding significantly to the AdEx of all media. It is estimated that the government spending will lead a 2.5 per cent growth in the industry.



FMCG will continue to be an important sector for the industry as it accounts a 29 per cent share in total ad spends this year due to the following factors:

[] Volume growth back for FMCG companies on the back of good monsoon and hence good rural income


[] Raw material prices benign and hence more flexibility with advertisers


[] Ad spends of most FMCG companies on the rise to ride on the back of higher disposable income due to election spending



The retail industry will experience growth from the entry of new players into the food and beverage segment, growth in E-commerce, and regional retailers  expanding their reach across markets in India.



Despite slowdown in the  four-wheeler segment, there is growth for entry level cars, sports and multi utility vehicles.  Two-wheelers to continue the focus on small town and rural India.


Competition is likely to intensify  on the back of recent market developments leading to more launches by existing players, which subsequently mean higher ad spends.



Smartphones penetration  is on the rise, however, stiff competition in the segment will continue. Phablets  and connected devices will gain popularity in 2014.


Cellular phone service providers too will witness growth in revenue.  Service providers will bring down the price points for 3G, therefore completion is more likely to intensity.


Banking, Financial Services & Insurance

For the Banking and Financial Services and Insurance industry, year 2014 will see a revival happening with a likely reduction of interest rates. IPOs to pick up pre-election owning to better market sentiments.


Recent RBI policies will result into a more favourable business environment and new bank licenses will push advertising expenditures of the category.


The report estimates  that print will grow at  8.5 per cent in 2014 as against the 2013 estimate of 4.6 per cent, thanks to the growth in vernacular print publications across the country. The report also states that while newspapers  are to grow by 8.5 per cent, magazines will witness a negative growth of 5 per cent.  Outdoor will grow at 9 per cent, Cinema 12 per cent and Retail 8 per cent, states the report.


If one looks at the sector-wise break up of spends, FMCG constitutes a majority share (29 per cent) followed by Consumer Durables (22 per cent)  and retail (12 per cent).


CVL Srinivas

Commenting on the growth prospects for the industry in 2014, Mr Srinivas said: “It’s going to be an okayish year for the media industry. I’m saying this because the 11.6 per cent growth estimate also accounts for the 2.5 per cent growth that will come from advertisements from political parties as the elections are around the corner. If you take elections out, which is a one-off event, the growth in 2014 is about 9 per cent.”


He further noted that the growth of the industry will also depend on how things are panned out on the measurement front, on IPL’s success or failure and the outcome of the elections, which will have an impact on government policies.


In his final remarks, Mr Srinivas said that the year 2014 will be remembered for two reasons — one being the fast growth of digital at 35 per cent as is estimated, and also the fact that the industry will cross the Rs 40,000 crore mark in 2014 from its current size of Rs 38,000 crore.


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