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FMCG, Retail, BFSI to boost ad spends in 2013

21-February-2013
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FMCG, Retail, BFSI to boost ad spends in 2013

The Pitch Madison Media Advertising Outlook 2013 has revealed that it expects the market to be cautious in the year ahead. The report shares that conventional media has its own set of advertisers, which if not different, has a commendable market pie as compared to digital media.

With the government on an aggressive front to renew the economy, post budget session may bring some surprises for the industry. The sectors that are likely to evangelise their advertising pie in both, print and television, would be FMCG and retail. FMCG in 2012 had a share pie of 10.3 per cent in print while for TV the share was 54.5 per cent. For retail the numbers were 5.8 per cent and 0.8 per cent for print and TV respectively.

Post approval of FDI in multi brand retail, the ad spend from the sector is likely to increase. The sector is also likely to renew its digital advertising structure as entry of many global FMCG and retail players cannot be ruled out, post the FDI decision.

Low IIP numbers and constant hike in the fuel prices might discourage auto manufacturers to hike their advertising budgets. Continuous supply side bottlenecks are further straining the resources of the industry, accompanied with low consumer enthusiasm. Although new variants are entering the market and consumers are willing to spend, the budget will be crucial for the sector. The ad spend share of the sector in 2012 was 11.6 per cent for print and six per cent for TV.

Another important sector, which may be aggressive on the advertising front, could be BFSI. With RBI allowing new players to enter the banking system and new norms to be released by the end of this fiscal, advertising budget could enhance. Apart from this, the fluctuation in the capital market has led many financial players to attract new set of investor groups and renew the existing ones. The total share in the ad spend by the sector was 4.3 per cent (TV) and 5.7 per cent (print) in 2012.

Speculative sectors could be education and real estate. The education sector was very slow on TV ad spend, contributing a miniscule share of 1.8 per cent in 2012. However, in print the same share was 10.6 per cent. Advertisers may attribute the reason to low attention span on TV, which is very crucial for a sector such as education. Real estate sector is plagued due to slow clearances, vague policies and disorganised structure. Therefore, ad spends may be curtailed or augmented for 2013 depending on the kind of cherries the sector gets from the budget.

The telecom sector is another speculative sector to be watched. The tussle between the telecom operators, TRAI, and the Telecom Ministry has crippled the financial resources of the industry and operators are vocal about the difficulty they are facing in doing business in India post the 2G fiasco. The sector which has been into slow but effective advertising may slash its advertising budget in 2013.

Last but not the least, the corporate sector may also shell extra bucks on ad spends. With the CSR campaigns doing the rounds and the corporate ministry urging the corporate to spend at least two per cent of their revenue on CSR, companies would not leave any opportunity to communicate their efforts, if any!

The PMMAO 2013 has predicted 7.4 per cent growth for the media sector. With digitisation only in the nascent stages, the ad pie will play a huge role not only in the TV domain but also others. Among all the domains (TV, print, radio, OOH, internet, mobile), internet is expected to grow by 32 per cent. The above discussed sectors are also likely to upgrade their digital spends in 2013.

All the above mentioned figures are for the year 2012 (Source: Pitch Madison Media Outlook Report 2013). Only TV and print have been taken citing the large chunk they commanded in the advertising pie in 2012 – TV: 40 per cent and print: 41.7 per cent.

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