Industry will once again invest heavily in advertising: Sam Balsara

15 Feb,2016

 

According to the recently-released Pitch Madison Advertising Report 2016, adspends grew by 17.6 per cent in 2015 and are expected to notch up another 16.8 per cent growth this year. Given the poor shape the markets and the economy are in, this does seem a tad unrealistic. But Sam Balsara, Chairman, Madison World, doesn’t think so. He tells Pradyuman Maheshwari that the optimism is not misplacedand if advertisers and media owners to read the full report, not only would they get a better understanding of the media market, but also sharpen their strategies in line with that.

 

A 16.8 per cent, overall growth is huge. And we hear of doom and gloom all over. The markets are tanking, the economy isn’t looking hunky-dory either. So is the report being over-optimistic about  2016 adspends?

The report outlines, in reasonable detail, the reasons for our optimism. Please see the commentary under Forecast 2016.  Primarily, confidence of the Indian Industry in Indian markets is growing by leaps is high and accompanied by low commodity prices. The industry will once again invest heavily in Indian advertising. Advertising is recognised as a trusted engine to stimulate demand.

 

And the 17.6 per cent growth of 2015 confirms it’s ‘achche din’?

Yes, the figures took us by surprise too. As you know, we revised upwards the TV figures mid-year, but the final figures for TV exceeded our mid -year revision, and all other media too grew more than our forecast. In fact, print grew at twice the growth rate we projected.

 

Madison has always known to be more conservative than the others in its spends forecast…

Our attempt is always to be realistic. And we try to base our forecast on data and numbers.

 

Is this essentially on the back of ecommerce, 4G and telecom hardware, and the sporting encounters and leagues?

FMCG, with its dominant size, will be the largest contributor to growth, supported by what you mention.

 

Television is seeing a huge growth still. What would you attribute this growth to?

Television continues to be the large advertisers’ chosen and dominant medium for brand-building. Many advertisers now use a support medium, though. TV, along with digital, makes for a potent combination today, with TV working at top of the funnel and  digital at the middle-to-lower end.

 

And there’s no sign of print growing in a big way. But in print do you see different trends in English mainstream, regional and magazines?

Print will grow by another 10 per cent in 2016, according to our forecast. Regional will grow at a faster rate than English. Magazines will remain flat.

 

Would you predict the demise of the print magazine as it is today by, say, 2020

No. Magazines are a useful medium and have a role, though limited in the marketing mix.

 

Most forecasters are bullish about radio, and said the good times will begin with Phase 3. But do you really see much happening there? It’s the second-lowest among media vehicles in 2016…

Over the next two years, radio should show high growth. It’s a good medium for new advertisers where entry barriers are low.

 

The Top 10 spenders account for 17 per cent of the total market. In a sense, it’s far from the 80-20 Pareto Principle. But three e-commerce players in it, and no devices or telecom major in there. How come?As we said, advertising is a Big Boy’s game. The e-commerce players are in the growth stage and looking forward to converting millions more to e-shopping. Telecom is in a mature stage. But data wars will see more action here in 2016.

 

The FMCG growth of 20 per cent to Rs 12,364 crore is heartening. Would you attribute this steady rise to any reason or was it expected?

Soft commodity prices is one major reason. And FMCG advertisers know that it is very expensive to regain lost share, so nobody wants to let go.

 

The Madison report is the last of the four annual adspend reports releasing at this time of the year. An unfair question to ask, but how would you differentiate this from the others which exist?

We like to wait till we have seen data for January-December, and most companies in India follow an April-to-March panning cycle, so its timing is perfect.

A slightly shorter version of this appeared in dna of brands on Monday, February 15, 2016

 

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