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India’s ad spends grew 3.5 pc at Rs 17,356 crore in 2007: Lintas Media Guide 2008

17-January-2008
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India’s ad spends grew 3.5 pc at Rs 17,356 crore in 2007: Lintas Media Guide 2008

Lintas Media Group has launched its annual offering Lintas Media Guide 2008. The Guide studies all genres – television, print, radio, Internet, cinema, and outdoor – giving a break-up of the media environment and general media industry trends of the previous year. With data compiled from all over the Indian sub-continent, spanning more than 28 states and seven Union Territories, the Guide is an all-inclusive take on the Indian media industry and players.

While print continued to hold major share with 50 per cent of the total media spends with Rs 8,591 crore, Internet as a means of advertising saw an increase in ad spends of 43 per cent compared to last year, reaching Rs 215 crore. Radio, cinema, and outdoors, on the other hand, capitalised on innovations and saw an increase of 28 per cent, 16 per cent and 17 per cent, respectively, reaching figures of Rs 529 crore, Rs 194 crore and Rs 1,062 crore, respectively. TV ad revenues showed a decline of 0.8 per cent at Rs 6,766 crore as a result of competitive pricing offered by GECs to retain their market share.

Lynn de Souza, Director, Media Services, Lintas Media Group, said, “There are some surprises in store – ad spends have grown by a mere 3.5 per cent in 2007 over 2006, reaching a figure of Rs 17,356 crore, largely due to a fall of 1 per cent in TV expenditure, with large advertisers moving into more cost effective channels, slots and durations. With increasing media reach amongst the rural masses and the urban youth shying away from mass media, 2008 is set to offer enormous advertising opportunities as well as tremendous challenges.”

In television, with the number of channels likely to touch as many as 500 in the next two years, television as an industry is growing at a dynamic pace. Though the direct impact of this is going to be greater ad avoidance, but the time spent on watching any channel has moved up. Also, with this burgeoning increase in the number of channels, the distribution of these channels is rapidly changing. As of now, India is Asia’s second largest pay TV market after Japan. By 2015, it is expected to be the largest pay TV market surpassing the current leader.

In print, with literacy levels rising to 551 million people in India, more people in rural and urban areas are reading newspapers and magazines today. Current estimates reveal that the reach of print media in India has increased to 316 million people. Print media is also the favourite segment for global investors with maximum foreign investment in this segment. 2007 saw launches of many niche magazines like the ‘Vogue’, ‘Economist’ and others. The print media industry still has the potential to grow as 236 million literate people in India are still not tapped by any publication.

The highlight of 2007 for the radio medium was launch of several new channels, especially in tier II and III towns. Of the total amount spent on ads in India, radio is estimated to have a share of 3 per cent in 2007. This share is expected to rise to 5 per cent during 2008-09. As per a FICCI-PricewaterhouseCoopers report, the opening of new radio channels has provided a boost to creative content. The demand can be estimated to as much as 1.5 million hours of content annually for around 300 channels.

According to PricewaterhouseCoopers, the out-of-home (OOH) industry is expected to rise from Rs 1,000 crore in the present year to Rs 2,150 crore in 2010, with a growth rate of 17 per cent. lnvestments in this medium are still made through gut feeling and sheer bullishness. Though to counter this, a panel has been formed by MRUC to measure the efficiencies of outdoor advertising. This study will initially be restricted to Chennai and Ahmedabad, and is likely to expand to more cities by next year.

Internet is one medium which has grown by leaps and bounds amongst the emerging media category. Besides the obvious, that is, the increasing number of PC households, factors such as awareness of Internet as a tool for empowerment has led to the expansion. Also, several one-time non-communication applications like exam results and e-ticketing have encouraged the less affluent to be on the Internet. Initiatives like National e-Governance Plan (NeGP) should increase the usage amongst lower SECs in the next two years. In terms of advertising, the revenues have grown by 43 per cent.

Also see:

The Lintas Media Guide 2008

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