With the season of festive spends round the corner, and a tumultuous political phase behind us, GroupM's revised annual estimated advertising expenditure for 2014 (GroupM revises ad spend growth to 12.5% from earlier 11.6%), predicts television ad spends going up to 14.8 per cent from the earlier 12 per cent. The global report, ‘This Year, Next Year 2014’ projects India, Brazil and Russia as the fastest growing ad markets in the world. With this report as the backdrop, we spoke to industry veterans about the sectors they think are driving ad spends in the country.
E-commerce, good commerce
Giving a nod to GroupM's revised forecast, Rohit Gupta, President, Multi Screen Media said, “While FMCG for television is still doing well (in terms of ad spends), it is the e-commerce sector that is really putting in a lot (ad spends). This is a new development.” He also pointed out that the general elections earlier this year made a substantial difference to most networks. “Besides, with the economy already showing signs of a recovery, Diwali should increase spends considerably,” he said.
According to Ashish Sehgal, Chief Sales Officer, ZEEL, players from three categories are spending serious monies on television. “The spate of launches by Maruti, Mahindra, Tata, Hero, Yamaha and Honda has meant increased spends by the automotive sector. Secondly, e-commerce players – not just shopping but also real estate sites – are spending more on TV ads to ensure more visibility and mindshare. They are looking at the medium the way an FMCG major would do, and are buying daily spots across networks.” Mobile manufacturers, says Sehgal, as the third biggest spenders on television, while others have reduced their spends on the medium.
Tarun Nigam, Director, PM Media Solutions agreed, “The market is much more buoyant than last year. Mobile manufacturers and service providers are likely to spend well on television ads.”
Not celebrating yet
Not everyone shares GroupM's optimism about ad spends riding northwards on the back of economic recovery. There is room for caution, feels Mayank Shah, Dy. Marketing Manager, Parle Products. "Many FMCG companies were apprehensive about the impact of a delayed monsoon, and their fears have been allayed. Even then, it is too early to say if that is enough to push ad spends upwards. We have to wait for a month at least to comment."
Chandru Kalro, COO, TTK Prestige concurred, “It has been an optimistic season from a business point of view. Brands are upbeat about the next financial year as businesses are doing well. The good measures that the government has taken, will only reflect in next year's spends.”
Amit Tiwari, Director, Country Head, Media, Philips India remarked that though ad spends on television will definitely grow, one needs to take a closer look at which sectors are the biggest contributors to this trend. “We have to analyse the medium, time length and other such details before we can say anything,” he said.
Expectations are clearly running high in the television industry. But are the advertisers actually ready to loosen up the purse strings? This festive season should tell.