GroupM has released its annual AdEx report This Year Next Year has forecasted Indian AdEx to rise by 12.6% in 2015. Advertising investment is expected to reach an estimated Rs 48,977 crores in 2015. In a conversation with CVL Srinivas, CEO, GroupM South Asia and Prasanth Kumar, Managing Partner, Central Trading Group, GroupM South Asia and CEO Designate Mindshare South Asia, we go deeper into the reasons behind the growth attributed to individual media platforms.
Print on rocky terrain?
The print medium shows an increase by 5.2 per cent as against the 2014 estimate of 7.6 per cent.
Srinivas explains, “One is definitely the advent of digital which is putting pressure to some extent on the print industry. The other reason is advertisers are still extremely cautious and while there is a positive sentiment in the market, it has not yet translated into consumer sentiment. When advertisers become cautious they conserve their funds and don’t advertise at the same levels across different media and some of them are relying on the other media to reach out to their target audience. Having said that, regional dailies, Hindi dailies are doing extremely well. A lot of brands and also FMCG brands are finding regional dailies to be very effective. We are also seeing a lot of local activity, entrepreneurial activity. They are much more confident in investing behind marketing. Magazines seem to be under a lot of pressure for some time now. General interest magazines are probably the worst hit. But there seems to be an opportunity for niche players. In the market, we will start seeing a shift towards niche magazines. All in all, on a weighted average basis, the number is 5.2 but if you are dicing the numbers you will see some segments actually doing well.”
Prasanth Kumar explains, “Print has reinvented with new formats but they need to have larger content, be interactive and engaging. We have seen in the last couple of years, print players have come up with customised solutions for different categories. As a brand I would like to reach to smaller markets through regional dailies, which is why print is important. Hindi print and regional are relatively more high growth than English. More reinvention is required.”
So what should the print players do for higher growth numbers? In Srinivas’ opinion, “Firstly, we have a lot of strong print brands and all of them have a wonderful opportunity of leveraging their brand equity on the digital platform because today the younger audiences are relying a lot more on digital media. These brands are very powerful, credible and have a connect with the audiences. So leveraging them on digital and then offering advertisers solutions that could integrate mainline with digital or even standalone digital solutions and doing it now rather than waiting till digital becomes 20-30% of the AdEx would be a smarter way to not just survive but thrive.”
So growth within print is being propelled by regional growth?
“Overall 10 to 12% is regional markets. There is a double digit growth there and single digit growth in English but it still remains substantial. There needs to be format innovation, customisation, faster turnaround, quick decision-making in print. The question I would ask is, most of them have digital platforms, mobile apps. They need to put in more focus there. There are more followers, impressions and use there. You can integrate print and digital offers to clients.” Kumar further opined.
Radio ad spends are estimated to grow at 11% in 2015. The upcoming Phase III auctions and PM Modi utilising radio to reach citizens has pushed the sector towards an upbeat momentum.
Srinivas comments, “We see a lot of growth coming from regional players on radio. There is a lot of more investment on brand building from the local advertisers and entrepreneurs. Radio becomes a natural choice for them as it gives them a wide reach. That along with the fact that there will be more stations available with Phase III.”
Kumar further elaborates, “Everybody cannot grow at 30 per cent or more when the pockets are growing at a slower pace. But it is the same concept which will work, more customisation, more interesting offers. We have seen that radio is a sector which reaches out well locally. Also some of the best practices during the elections.”
The digital upswing
Digital is estimated to grow at the fastest pace at 37%, way higher than other mediums. Srinivas cites the reasons behind the growth, “One would be the increase in penetration of smartphones. Very soon we will have 30-40% of population using smartphones. The minute you have a smartphone in your hand and you have bandwidth with that, you will have access to a lot more content and media. That coupled with the fact that advertisers are trying to focus their advertising more, reduce wastage, have targeted advertising; all of this working together, advertisers will look at digital a lot more seriously and allocate a lot more of their ad spends to digital. The second is the growth of digital video. We have seen in the last few years digital video platforms gain popularity. A lot of big broadcasters and content players in India are creating their own video platforms. We are seeing humongous consumption of video content online. Thirdly, there are a lot of categories today are finding that digital media complements what they are doing on traditional media. Because with digital you are able to engage a lot more with the consumer, and have a two-way dialogue. You can even close the transaction through a sale. Most campaigns today, especially from the large advertisers have a digital element to it and there is an interesting interplay between the digital ideas and the traditional ideas. Last but not the least, the whole concept of content and whether you call it native advertising or branded content or long format, the content possibilities on digital are many. Unlike traditional media where you have fixed formats. Advertisers who want to experiment or have interesting stories to tell customers are finding it a lot easier to do it on digital.
Customisation and measurability remain a challenge in OOH. “There is a lot of opportunity for OOH medium to grow more, especially when you start seeing a lot more luxury brands coming into the market, when you start seeing a lot more organized retail players coming to the market, you will see OOH doing better than now. There is a quite an opportunity to leverage technology in outdoor. That could bring in a different set of clients, As the industry works towards better measurement systems, better tracking systems, that will also help in getting clients to outdoor medium,” said Srinivas.
He concludes on a positive note saying, “One point to note is there is massive headroom for growth in India across all media. The numbers put out today here are based on the current categories that will spend big bucks on advertising. The bigger point is we are still growing at 12.6% Y-o-Y, and advertising spend to GDP is still lower than other markets. We still don’t have a strong brand culture as we need to have as a nation.”