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Magna Global Advertising Forecast Report 2009-10 predicts growth story for India

Magna Global Advertising Forecast Report 2009-10 predicts growth story for India

Author | exchange4media Bangalore Bureau | Friday, Dec 11,2009 7:48 AM

Magna Global Advertising Forecast Report 2009-10 predicts growth story for India

A recent study done by Magna, a strategic global media unit responsible for forecasts, insights and negotiation strategy across all media channels on behalf of media brands and part of the Interpublic Group, reveals that developing economies like India and China accounted for media suppliers’ global advertising revenues exceeding $358 billion during the year 2009. The trend reveals the massive strength of the Asian economies.

“The inherent strength of the key Asian economies has come to the fore during this recession and the report confirms the manner of growth predicted for 2015 for these economies. In India, there will be a strong move of the know-how and content from the Western economies towards these countries for reason of monetization and growth. These are interesting times of rapid change ahead for this region,” said Premjeet Sodhi, Chief Planning Officer, Lintas Media Group.

After a tumultuous phase and the “great recession”, this research paints a happy picture, especially since the damage has been deep and lasting for many in the West. In US dollar terms, media suppliers’ advertising revenues declined by 16 per cent during 2009 as the economy faced near-collapse. However, the growth of emerging markets like India has contributed significantly to the total size of the worldwide advertising-supported media industry.

Growth in India has been largely held up with stability supported in part by its state-owned banks. Also, sectors such as telecom are expanding rapidly. Among segments of the media, television continues to be the dominant choice, while the Internet medium also marked sharp growth. The Indian print industry, deemed as the second largest in the world, is expected to grow by an average of 14 per cent by 2015. Newer niche international publications continue to make their presence in order to grab a piece of this pie.

And the future will clearly belong to newer mediums like radio, outdoor and the Internet. Pegged as the medium of the future, online revenues alone are expected to touch Rs 18 billion by 2015. Radio is expected to account for 5 per cent of advertising all over India, whereas outdoor advertising too is expected to grow up to 17 per cent by 2015.

Some of the key predictions for the Indian media scenario include that broadcast and pay TV programming would generate Rs 86 billion in advertising revenues during 2010, rising by 14 per cent on average through 2015. Newspapers are expected to grow on an average of 14 per cent through 2015, whereas magazines would grow by 11 per cent each year over the next five years. Radio is expected to grow 17 per cent each year over the next five years, at which point it would account for 5 per cent of all advertising in India. For the Internet, there would be an ongoing growth of approximately 21 per cent each year over the next five years as online advertising rises to account for Rs 18 billion in revenues by 2015, 4 per cent of total advertising.

Sodhi said, “The digital growth story is already being scripted. The recent downturn has given an impetus to the digital medium. However, there is high degree of evolution that is required for the medium to move away from its current compensation model based on clicks to one based on brand development parameters. FMCG companies are taking the lead in this direction. Print in India, too, has shown good growth despite challenges from TV and digital media.”

Lynn de Souza, Chairman and CEO, Lintas Media Group, added, “The coming year will mark a return to growth for most parts of the world. With this growth, the ad supported media economy is expected to grow, too. Most areas will resume normal rates of growth, largely driven by advertising’s relationship with the broader economy.”

The study predicts rapid growth for digital media. For instance, rising Internet access levels and the establishment of endemic ecosystems have led to an online industry generating more than $58 billion in advertising revenues during 2010 – and $91 billion by 2015, up from a mere $6 billion in the year 2000. Mobile services, too, will proliferate even more widely, rising from approximately 700 million subscriptions in 2000 to 6.4 billion in 2015.

Print media will continue suffering the fall as magazines will have fallen slightly from $39 billion in advertising revenues during 2000 to $35 billion in advertising revenues expected in 2015, whereas newspapers will be down similarly from $97 billion in 2000 to $93 billion in 2015. Television clearly retains its dominance, growing from $98 billion in advertising revenues during 2000, nearly doubling to $189 billion in 2015.

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