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TV and Digital together to make up for 80% of ad spends in the next 3-4 years: CVL Srinivas

05-February-2018
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TV and Digital together to make up for 80% of ad spends in the next 3-4 years: CVL Srinivas

“Last year ad spends grew by 10 percent in 2017; the lowest in five years, but TV in India is still doing well. TV will be the lead medium as far as reach is concerned for the next three years,” said CVL Srinivas, Country Manager, WPP India and CEO GroupM South Asia.

While addressing a gathering of broadcasters and media agencies at the Prime Time Awards night on a Thursday evening, Srinivas highlighted some key growth indicators and trends in the advertising world.

He said that India is the fastest growing market in terms of ad spends today as compared to other markets. "In China ad spends on TV declined by 9 per cent over last year. TV spends in the UK declined by 1 per cent over the previous year. And in the metro market TV is growing at 1 -2 per cent in terms of ad spends and the Indian TV ad spends is still a double digit number," he observed.

"The fact remains the same, as we all know the FMCG category is the highest contributor when it comes to TV ad spends," he noted. “FMCG makes up for 50 per cent of TV ad spends, E-commerce has come to number two with about 8 per cent of TV.”

Spends on TV currently stand at 45 per cent of overall ad spends in India and digital is at 15 per cent. “ TV and digital together make up for 60 per cent of total ad pie. This will increase to 80% in the next 3-4 years. In terms of share of advertising, digital is going to grow faster,” added Srinivas.

He further spoke about the TV and digital and mentioned that industry has seen a nice interplay between both the mediums. He said, “It's not that digital has come in and TV viewership has dropped. As per BARC, TV consumption time remains constant.”

Srinivas, thanked digitization in the industry as the he mentioned that subscription revenue is picking up. “Overall the braodcast medium is expected to grow 14 per cent over the next few years. Next year is looking good and strong for the broadcast space.”

"There is a gap between the reach of TV and digital, and this gap will narrow in the next 2-3 years," Srinivas said. "India is a very unique market; everything is polarized in terms of growth. “Ad spends have grown to 17-18 per cent on FTA channels,” shared Srinivas. While in the case of HD channels, the growth is at a lower pace. “FTA is at one extreme and HD on the other, these two together will fuel the overall growth for the medium,” he added.

He also spoke about the digital measurement system EKAM, which will be rolled out by BARC soon. He said, “Another important thing that we will soon have are digital ratings from the same body that provides TV ratings. I think that will bring a dramatic change.”

He spoke about the telecom wars that are currently shaping the industry. “Distribution ecosystem is getting disrupted in India specially by the telcos. We believe in next three years it will actually redefine access to TV.”

Srinivas concluded by saying that the next three years look strong for the broadcast industry thanks to the robust growth indicators, investment in specialty content, and exciting developments on the measurement front.

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