Say Cheers! Madison predicts 16.8% adspend growth in 2014

20 Feb,2014

 

By Johnson Napier

 

With so much being reported and analysed about how the oncoming Lok Sabha elections would benefit or harm the prospects of the economy, there is one section of the trade for whom the election year indeed holds good stead. Going by the growth projections that the election season are expected to bring in 2014, the media advertising business in India is in for a big surprise if numbers revealed in a recent report are anything to go by.

 

According to growth projections released by the Pitch Madison Media Advertising Outlook 2014 report in Mumbai yesterday, the advertising revenues are expected to grow by a robust 16.8 per cent in 2014 at Rs 37,216 crores. This is a sharp rise from the healthy 11.1 per cent that was reported by the industry in 2013. In fact the growth in 2013 is much more then the benchmarked figure of 7.4 per cent that was initially predicted by the report.

 

Presenting the numbers to the fraternity in Mumbai, Sam Balsara, Chairman and Managing Director, of leading media services conglomerate Madison World said that the time to be cautious – which was the state that the industry was in for much of 2013 – was almost over and that the year ahead would be even more fulfilling with growth projected in the range of 16.8 per cent.  The report was presented by Madison World in conjunction with the exchange4media group’s Pitch magazine.

 

“It is great to be clocking a growth rate in double digits, which has come as a boon to the industry that was stuck in clouds of uncertainty given the economic downturn that was witnessed for much of last year,” affirmed Mr Balsara. “Compared to 2012 that registered revenues to the tune of Rs 28,694 crore, the year 2013 reported numbers equalling Rs 31,877 crore, growing by 11.1 per cent. In fact 2014 would outperform the previous year and would register an estimated growth of 16.8 per cent, with revenues totalling Rs 37,216 crore,” said Mr Balsara, beaming.

 

According to Mr Balsara, the core factor that would bring in the growth for the industry would be the Lok Sabha and the state Assembly elections scheduled for 2014. This would also include spendings by individual political candidates that would be investing money in reaching out to the masses.

 

Presenting a medium-wise break-up to the gathering, Mr Balsara said that like last year, this year too belonged to Print that emerged as the numero uno medium. Advertisers took a liking to the medium as it reported a growth of 10 per cent with revenues equalling Rs 13,167 crore. This was largely due to increased advertising by sectors such as FMCG that contributed by 12.3 per cent to the overall ad pie (replacing Auto from the top spot) and Auto that contributed around 11.7 per cent. Education though saw a decline to 9.71 per cent versus 10.6 per cent share registered last year.

 

When asked by MxMIndia to share his observations on the projections for the medium of Print, Varghese Chandy, Chief General Manager, Marketing, Advertising Sales, Malayala Manorama said that the growth was indeed a bullish one for the sector. “I am excited by the numbers that we have managed to throw up as a medium. The fact that we have still got the advertisers attention by being the number one medium of choice is a big thing.” Sharing further on what will drive the sector in 2014, he said that the Lok Sabha elections and the assembly elections that will take place in 2014 will bring in the necessary revenue growth that the medium is known for. But he had a word of caution for the magazine sector as he said that it would still be a task for magazines to contribute as much growth as newspapers too. “While niche and regional magazines will continue to deliver good growth, overall the magazine industry will still be challenged on the growth front.”

 

Following the medium print closely was Television that recorded a growth of 8.2 per cent with revenues totalling Rs 12,410 crores. This was in sharp contrast to 2012 where the medium registered a zero per cent growth. Where sectoral contribution was concerned, Media, Retail, Alcoholic Beverages and Corporates registered a negative growth with only FMCG registering a positive growth for the medium. The medium is further expected to grow by 15 per cent in 2014.

 

The next medium to vow the advertisers was Digital that has now become the third-most preferred medium for advertisers on a consistent basis. With revenues totalling Rs 3,050 crore the medium grew by a good 32.4 per cent and is expected to grow by 29.5 per cent in 2014 as well. Of this, display advertising will continue to have an upper hand compared to search with revenue numbers totalling to Rs 2,150 crore.

 

Siddhartha Mukherjee, Category Director, Chocolate and Media, Cadbury India, Mondelez International was optimistic of the returns that the medium would deliver in 2014. Affirming to this writer, he said, “Going by the projections that were presented today and by the points bought up by panellists, there is no doubt that digital will continue to remain a go-to medium for many advertisers. That is what would be of importance to us too.”

 

The mediums of Radio, Outdoor and Cinema combined accounted for the remainder 12-13 per cent of the ad chart with Radio accounting for revenues totalling Rs 1,097 crore (18 per cent growth), Outdoor clocking a growth of 6.2 per cent at Rs 1,977 crore and Cinema registering a growth of 10.4 per cent at Rs 167 crore.

 

The evening also witnessed keynote addresses being delivered by dignitaries including Adi Godrej, Chairman of the Godrej Group, Uday Shankar, CEO of Star India, and Girish Agarwal, Director, Dainik Bhaskar Group who presented a roadmap that the industry could adopt to change their business fortunes and also derive positive growth for the several mediums under Media.

 

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