Ad industry beats expectations to grow 11.1% in 2013; outlook promising for 2014

The growth prediction for media ad industry for 2013 was 7.4%, but actual growth was 11.1%, as per the Pitch Madison Media Advertising Outlook 2014. The market is expected to grow by 16.8% in 2014

e4m by Sam Balsara
Updated: Feb 20, 2014 7:54 AM
Ad industry beats expectations to grow 11.1% in 2013; outlook promising for 2014

2013 was a year of a slowing economy that showed no signs of recovery. Economic growth rate hit a new low of 4.5 per cent in the fiscal year 2012-13. High inflation, corruption scams and economic slowdown were some of the highlights of the year.

The watchword for 2013 in last year’s predictions was CAUTIOUS. It was best not to be too optimistic about the media spends, considering how the economy was bottoming out with very few signs of recovery. The prediction for the growth of the media advertising industry for 2013 was 7.4 per cent, and it is a relief to know that the actual growth was higher at 11.1 per cent in 2013.

Print has again emerged as the biggest contributor to the total advertising pie. It superseded TV and widened the gap. It is the largest contributor at 41.3 per cent with TV trailing behind at 39 per cent.

Many advertisers tried to counter the slowdown with increased advertising. Sectors such as FMCG, Telecom and Auto increased overall advertising spend. Print spends that contributed substantially to the overall growth, were fuelled by FMCG, Auto and Real Estate.

There was a lot of action in the Television space, too. Television grew at the rate of 8.2 per cent, as against the projection of 6 per cent despite the self-imposed regulation by TV channels given the impending Ad Cap of 10+2. Digitisation gathered momentum during the year with the Government backing it. The year was characterised by many spats in the TV industry, between broadcasters, agencies and advertisers, notably, suspension of ratings during digitisation, Gross Vs Net Billing, broadcasters withdrawing subscription to TAM, and finally voluntary imposition by some broadcasters of the 12-minute ad cap per hour Frequent panel change in TAM led to inconsistency in ratings. BARC, the industry’s own alternative ratings system, also gathered momentum. The year saw a number of new channels, including Romedy Now from Times Television, Zee Anmol and &Pictures, among others.

There were several rebranding initiatives that also took place. Sony TV got a brand new look that made it modern and distinctive. Sony Pix unveiled a new logo and so did India TV.

Radio grew dramatically by 18 per cent, against the projected rate of 4 per cent, on the back of higher inventory being sold across stations. A lot of this revenue came from smaller towns.

Whilst the new year has begun slow, we expect 2014 to be one of the best years in recent times. The market is expected to grow by 16.8 per cent in 2014 and the biggest contributor of this growth, estimated at over Rs 5,000 crore, will be the upcoming Lok Sabha and four major state elections, where political parties should spend up to half of this amount. With greater pressure on parties and individual candidates to win, we expect more and more will resort to advertising in print, TV and Outdoor in a big way to improve their chances at the sweepstakes. We expect TV to grow well because of increased penetration of digitisation, ad cap regulation, which is likely to be enforced formally and which will lead to rate increases because of restricted supply. Also, many new channel launches are expected once the licences are issued post the Lok Sabha elections, from existing Networks.

Print has shown immense promise and this year we expect regional dailies to continue their onward march and grow at a faster rate at the expense of English dailies.

Radio is expected to grow by another 15 per cent. Consolidation within radio will take place due to the expected Phase 3 auction rollout. Digital will continue to grow stronger and smaller and new advertisers are expected to enter Search. The Outdoor medium is set to grow by 8.2 per cent on the back of elections. But Cinema will surprisingly grow by a mere 7.2 per cent. Time for the medium to reinvent itself for the advertiser.

All in all, the year 2014 looks a lot more promising and with the elections round the corner, the second quarter promises to be quite exciting.

Sam Balsara, Chairman & MD, Madison World.

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