Adspends to increase 12.6% in 2015: GroupM

03 Feb,2015

 

A Correspondent

 

Leading media marketing services conglomerate GroupM released its biannual advertising expenditure futures report This Year Next Year (TYNY), forecasting India’s advertising investment to reach an estimated Rs 48,977 crore in 2015. This represents a growth of 12.6% for the calendar year 2015 over the corresponding period in 2014.

 

As per GroupM the adspending was Rs 43,490 crore for the calendar year 2014, an increase by 12.5% over 2013. This growth was attributed to the heavy adspending due to the General and State Elections and industry categories like ecommerce and telecom.The FMCG sector, which contributes to nearly a third of the AdEx, had a steady year, growing broadly in line with the industry average.

 

CVL Srinivas

Said CVL Srinivas, CEO, GroupM South Asia, “With a new government coming to power, the negative sentiment has lifted but there is still some bit of caution amongst advertisers.We continue to operate in the same zone as last year at an overall level. Digital, TV and Cinema are expected to be the high growth media channels. We are seeing a lot more confidence amongst local businesses to invest in brand building than before. This is a positive sign for the industry. Penetration of smartphones coupled with the popularity of online video is making FMCG spend more on digital. Another trend is the emergence of categories like e-commerce and the increased competition in telecom both of which are aiding the growth of traditional media channels including Print and TV apart from digita.l”

 

E-commerce is expected to lead the charge in 2015 in terms of ad spend growth although from a relatively smaller base than more established categories, according to GroupM’s forecast. There is increased competition in this sector and no dearth of funding. FMCG, Auto and Telecom are expected to do better than the previous year. More multinational entrants under single brand retail are likely to add to ADEX spending in the retail category. The recent rate cuts by the Reserve Bank of India will stimulate the banking sector, reactions of which are evident on a buoyant stock market. This year will possibly see a number of IPOs as there is a sense of stability in policy and investors are willing to take more risks. The market will also see higher spends from the Central Government as they showcase their new initiatives.

 

Prasanth Kumar

Added Prasanth Kumar, Managing Partner, Central Trading Group, GroupM South Asia and CEO-designate Mindshare South Asia: “Over the last few years, Indian media has been in a state of change. The next three to five years will be about embracing technology, which will allow both advertisers and media owners to customize distribution to a premium niche audience with very nominal margin of error. In 2015, programmatic buying will see an impetus, as all media in the future will see automation, backed by smart data and analytics.”

 

As per GroupM’s in-depth research of the Indian media industry, digital media continues to show the maximum growth with 37% in 2015. Digital has been growing at an average rate of 35% over the last two of years. This year within digital media Video, Mobile and Social will be the biggest growth drivers.

 

Television shows a higher growth percentage in 2015 compared to last year with 16 percent. TV channels will especially be bullish with cross media integration via their own digital platforms. The big ticket event this year is the ICC Cricket World Cup in February and March, with scope for programming and advertising innovation during the tournament.

 

Even with pressures on advertising revenues, the print medium shows an increase by 5.2% as against the 2014 estimate of 7.6%; however print magazines continue to be on the decline, as several are looking at digital delivery mechanisms.

 

The surprise element in the media mix has been cinema advertising which finally closed 2014 with a 25% increase. This year too, GroupM estimates this media category to grow at 20%, as multiplex chains consolidate, leading to a more organised and accountable environment. With technology fuelling exhibition and distribution, especially in smaller towns, consumers will get a better viewing experience.

 

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