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Broadcasters confident about 13 per cent Adex growth predicted by Pitch Madison Advertising Report 2017

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Broadcasters confident about 13 per cent Adex growth predicted by Pitch Madison Advertising Report 2017

The ‘tsunami’ in the form of demonetisation didn’t let Adex cross Rs 50,000 crore mark and knocked off Rs 1650 crore from the same according to the recently unveiled Pitch Madison Advertising Report 2017. However, despite that, the growth in Adex at 12.5 per cent was close to its mid-year projection of 13.2 per cent.

Since Adex decreased in November-December 2016 by 8 per cent, it predicted that the growth rate in November-December 2017 over corresponding months in the previous year to be a ‘dramatically high 24 per cent.’ “The aggregation of these growth rates during these three periods help us arrive at our annual growth forecast of 13.5 per cent, making Adex cross the Rs 56,000 crore mark. This should make India once again the fastest growing advertising market in the world for the third consecutive year,” said the report.

 TV will continue as the largest contributor to the overall advertising pie with a share of 38 per cent. Last year as well it dominated the advertising pie, growing by Rs 1,570 crore, a 9 per cent growth, despite losing an estimated Rs 850 crore on account of demonetisation. The main categories that have fuelled the overall growth of Rs 1,570 crore in 2016 are FMCG (Rs 692 crore) and telecom (Rs 475 crore). The report is expecting 2017 to favour Adex and bring in a double-digit growth of 13 per cent on the back of new channel launches from existing networks (‘that will increase inventory supply to absorb this growth’) and aggressive growth of FMCG players and help it achieve Rs 21,300 crore. Patanjali Ayurved’s aggression in advertising spends will definitely play a big role as will the launch of Ayurveda lines by other FMCG giants.



Rohit Gupta, President, Network Sales & International Business, Sony Pictures Networks India, shares his thoughts on the forecast, as he says, “It should align to that. It should grow anywhere between 13 and 15 per cent. As per BARC the universe is growing up to 183 million households. TV is the highest reach builder for any brand. So it will continue to do well. FMCG are obviously big spenders but there are new categories that are also spending for instance, telecom.”

 He adds, “Digital spends in India are going up. ROI on digital is still very high. But TV’s ROI are far better. Globally brands have held back their spends on digital. In India also, at some point brands will realise that TV is the best medium. I feel that some brands are overexposing themselves on the digital medium.”

However, he didn’t quite agree to the number assigned for 2016 (9 per cent), “The growth (per cent) for 2016 should have been double digit because only in November and December business took a hit. Till then everyone had a great year. So I don’t subscribe to that 9 per cent.”

 Manav Dhanda, Group CEO, SAB Group, says, “All e-commerce portals and technology platforms, the top media spenders, had reduced their spends on media as compared to the previous year. Despite that, there was a reasonable growth at a macro level. However, the sudden demonetisation impact certainly had a lasting effect through the year as well. There is far too much speculation on when the demonetisation impact would wean off, but for now it could be as good as playing a hand of cards and is anybody’s guess on when we’ll see the growth in ad spends in equivalence to what industry was trending prior. If the ad spends normalise by August 2017 then it would be in line with 13 per cent predicted growth. However, once it bounces back we can be sure of a far greater growth then what sombre sentiments can pre-empt right now.”

 Pawan Jailkhani, Chief Revenue Officer, 9X Media Pvt. Ltd is, however, skeptical about the number, as he says, “Increase in Adex/inventory does not necessarily mean that value would go up. This is because of demonetisation lots of clients have asked for free/discounted inventory in the last three-four months. To add to that, the situation also became grim when few other broadcasters discounted rates further to get larger volumes during this period. We have seen increase in TV penetration and viewership in the last one year, but the real value is still not derived for the TV sector and is still undervalued. So I suspect that as a medium we will grow at 13 per cent in value. However, it’s a wait-and-watch situation for the next two quarters if we do course correction and treat this medium at optimum to have a decent growth. Having said that, I am bullish on key sectors FMCG, auto, telecom and e-commerce driving growth.”

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