'Cautious Optimism' that's how Sam Balsara, Chairman and MD, Madison World, described the findings of the Pitch Madison Media Advertising Outlook 2012 (PMMAO 2012). The much awaited report that was released by Balsara, along with Ms Punitha Arumugam, CEO, Madison Media Group, at an event held in New Delhi on February 17, pegged the Indian media advertising industry at Rs 25,594 crore in 2011.
Owing to slowdown in the second half of the year, the growth was sluggish at a mere 8 per cent, as against a projected growth of 17 per cent. Backed on a cautious approach followed by marketers, the year 2012, too would start slow and is expected to pick momentum only in the second half. PMMAO 2012, projects a single digit growth of only 9 per cent, taking the media advertising revenues to Rs 28,013 crore.
Revised outlook for magazines
Meanwhile, delivering his welcome address, Annurag Batra, Chairman & Editor-in-Chief, exchange4media Group, announced that the estimates for magazines, which are currently being pegged at about Rs 377 crore would be revised. “The Association of Indian Magazines (AIM), Madison World and other magazine publishers would work together on the magazine estimates,” Batra said at the event.
While, India TV was the presenting sponsor of the event and was simultaneously powered by Zee Bangla. Associate sponsors included Discovery Networks and Times Television Network. My FM was the co-sponsor, and Hospitality partner was The Metropolitan Hotel & Spa. 24 Frames Digital was the web streaming partner.
Batra, too like Balsara, dubbed the advertisers' approach to spendings as “cautious” He felt that the mood cannot be called as “pessimistic” but was more of a “protectionist”.
Meanwhile, taking the august audience through the journey and history of Pitch Madison Media Advertising Outlook, Amit Agnihotri, Co-Founder and Director, exchange4media Group and Editor, Pitch Magazine, said that “over the years people had come to believe in the PMMAO numbers.”
“The numbers at time, while were pessimistic, but they have always been realistic,” he added. He remarked that in 2003, when the first Ad Outlook was brought out, the total ad pie stood at Rs 9,300 crore, which had grown to Rs 25,594 crore in 2011, a CAGR growth of 15 per cent.
Balsara, meanwhile thought that barring 2009, when the growth was in the negative for the media advertising industry, a growth of just 8 per cent in 2011 was the lowest in a decade. He felt that 2012 would be an year of “uncertainty” and it “was getting more difficult to get clear trends.”
His advice to media owners in general was to lock in annual/ long term deals with advertisers.
For TV: Lock in annual/long term deals with advertisers, however they might look for short term deals. Also, keep an eye not only on your ROI and profitability, but on advertiser’s ROI and profitability too. Make the viewers pay 50 per cent of your revenue. And most importantly, monitor production cost per TRP (PCTRP). Increase average time spent per day on viewing television.
For Print: Make readers pay 50 per cent of your revenue, and more needs to be done by the English players. Lock in large FMCG advertisers – “I see unwillingness on the part of Print publishers to befriend FMCG advertisers,” Balsara said.
For Outdoor: Scale up Indian outdoor survey and be cautious at the time of tendering.
For Advertisers: Do not under invest in advertising. Use multimedia. The advertisers have to dig deep and narrow cast, instead of casting wide. According to him, tent pole properties would become expensive.
For Media Agencies: Be cautious and keep cost under control. Use talent/resource optimally. Automate and centralise resources a lot more and maintain margins to enable diverse talent pool.
Defining the media
Giving a more detailed analysis of the Pitch Madison Media Ad Outlook, Punitha Arumugam, CEO, Madison Media Group, dubbed Television as a “Mr Reliable” medium, while she thought Print was the “Mr Survivor”. Noting that the role of radio in advertising today was tactical and not strategic, she called the medium Mr Dependent.
“Internet, with its phenomenal growth, has graduated from being “Mr Happening” to a medium that had arrived (Mr Arrived),” Arumugam added.
While PMMAO 2011 projected a growth rate of 13 per cent, print could only achieve a growth 8 per cent, taking the ad revenues (tenders/classifieds/appointments are not included) of print to Rs 10,791 crore in 2011, from Rs 9,992 crore in 2010. a growth of 8 per cent. Arumugam informed that regional print media registered a far more robust performance as compared to English media. PMMAO 2012 expects the print industry to grow by 6 per cent in 2012, to clock revenue of Rs 11,438 crore. Meanwhile, print lost a negligible share in the ad pie from 42.3 per cent to 42.2 per cent. However, in 2012, its share could go down to 40.8 per cent.
TV continued to maintain and take its lead further in the ad pie to 44.8 per cent in 2011 from 44.5 per cent in 2010. PMMAO 2011 had projected the medium to take its share to 45.7 per cent, with ad revenues of Rs 12,636 crore. However, it could garner only Rs 11,478 crore, adding Rs 948 crore to its ad revenues in 2010. TV, according to Arumugam should grow at 10 per cent to clock revenues worth Rs 12,626 crore in 2012.
As against 2010, when radio saw a growth of 30 per cent, radio had a negligible growth of only 2 per cent in 2011, just adding about Rs 18 crore in 2011 to its ad revenues worth Rs 885 crore in 2010. Arumugam felt that the novelty factor of radio had worn off and it was being used more for tactical marketing rather than strategical. PMMAO 2012 expects radio to perform slightly better in 2012 and achieve a growth of 5 per cent to take the ad revenues to Rs 948 crore. Owing to growth of internet, both radio and outdoor are expected to lose share in the ad pie. Radio's share is expected to go down to 3.4 per cent in 2012, from the current 3.5 per cent. It had a share of 3.7 per cent in 2010.
The surprise of the report was Outdoor, which saw a growth in the negative (-10 per cent), losing about Rs 144 crore in 2011 to its ad revenues worth Rs 1,441 crore in 2010. The outlook for 2012, projects a growth of 5 per cent taking the ad revenues to 1,362 crore. The sad part being that this figure doesn't match the high figures of 2010. It also lost its share in the ad pie from 6.1 per cent to 5.1 per cent. In 2012, the share is expected to go down further to 4.9 per cent.
And above all this, it’s internet that’s emerged as the cool place to be at. While, PMMAO 2011 had projected a growth of 35 per cent for display advertising, the growth was an overwhelming 45 per cent, taking its revenue up to Rs 985 crore. And if we include Search, the total goes up to Rs 1,535 crore, and that could upset shares of all other mediums. PMMAO 2012 expects internet revenues to go up to Rs 1,478 crore (excluding Search) in 2012, a growth rate of 50 per cent. Internet is also expected to take its share up in the ad pie from the current 3.8 per cent to 5.3 per cent.
Another surprise of the year was Cinema that bounced back with vengeance. Arumugam dubbed the medium as Mr Comeback. Cinema, which was expected to grow at 10 per cent, grew at 18 per cent, clocking ad revenues worth Rs 140 crore, a clean Rs 10 crore above our projections. The medium is expected to continue the momentum in 2012 too and can clock ad revenues worth Rs 161 crore at a growth rate of 15 per cent.