The Indian advertising industry is on a roll and ad spends are expected to grow by a sturdy 16.8% in 2016, predicts the Pitch Madison Advertising Report. Ad spends grew by 17.6% in 2015, according to the report, which also observes that India finally earned the distinction of being the fastest growing advertising market in the world in 2015 and is expected to retain this position in 2016 as well.
Commenting on the bullishness indicated by the report, Sam Balsara, Chairman, Madison World, says, “Our prognosis for 2016 is that it is going to be yet another good year for media. In arriving at the numbers, we are conditioned by the fact that the Indian economy has become the fastest growing economy of the world; our GDP growth rate at 7%+ is the envy of the Western world, now looking at India in a new light; our BJP government tells us that it has made a number of structural interventions to prepare the economy for high growth and continues to remind us that it is strongly focused on stimulating the country’s economic growth with pro- business policies; at the same time not ignoring subsidies for the poor, which should also add to purchasing power of Rural India. Commodity prices including that of oil are likely to remain soft throughout 2016. India Inc. remains optimistic about India’s future and they will once again invest heavily in advertising to protect and gain market-share of their brands and also launch a number of new brands, variants, e-commerce platforms and apps to capture the imagination and meet the requirements of modern India.”
KEY FINDINGS OF THE REPORT
The industry added Rs 6,586 crore to the market in 2015 alone. The main contributor to this growth continued to be FMCG, which contributed 31%, compared to e-commerce players who contributed only 12%. Auto and Telecom also contributed 14% and 13% respectively to the growth
It took five years (2008-2013) for the ad industry to add Rs 10,586 crore, but only two years (2014-2015) to add Rs 11,885 crore to reach nearly Rs 44,000 crore
TV pipped Print to become the largest medium, contributing to 39% of the total ad pie with TV ad spends touching Rs 17,261 crore in 2015. The medium grew by 22% in 2015 and is expected to grow by another 20% in 2016
Print is just a little short of TV, and is the second largest medium contributing 38% of the total ad pie, at Rs 16,935 crore in 2015. Print grew by 11% and is expected to grow by another 10% in 2016
With the highest growth of 29% in 2015, Digital continued its growth surge and has now established itself as a firm No. 3 in the ad mix, contributing to 12% of the total ad pie. Digital ad spends crossed Rs 5,000 crore in 2015. Though the absolute spends on Search have increased, its share of the digital pie has gone down due to the fact that video, social and mobile display grew at a faster rate last year
Advertising continues to be a Big Boys’ game, with the largest spender Hindustan Unilever, spending approximately Rs 2,500 crore and the top 10 spenders accounting for 17% of the total market.
OUR GOVERNMENT IS ON THE MOVE: JS MATHUR
Special Secretary, Ministry of Information & Broadcasting, says the government wants to support and build the media industry in India and is committed to removing impediments and resolving all issues
ON AIDING THE INDIAN M&E INDUSTRY TO REACH $100 BILLION
As is very evident, the first and foremost thing is content, which is actually desired by the people. Unless and until you are catering to the viewing public for what it actually wants, all goals can be quite a distant dream. But the Indian media and entertainment sector has become a very entrepreneurial sector. They are already getting into various formats and various themes. Secondly, another thing they need to look into and introspect is how they want to position themselves. A $100 billion dream is always possible, but it is only realizable if you are also going global, and that is one area where the industry and the I&B Ministry can work together to see how that can be achieved.
ON GOVT POLICIES TO ENHANCE MONETIZATION OF M&E SECTOR
As far as monetization goes, I think the industry has to look at its revenue model and evolve its own guidelines. That would be the best. The government, on its part, has been quite a proreform government. Quite a few taxation issues are being looked into, but I think the major step would be to take industry productions to a larger audience. Audiences are getting fragmented, both within the country and outside, so they should be a little more sharp in targeting the audience to get maximum returns.
BALSARA’S ADVICE TO ADVERTISERS
The consumer has changed both in terms of buying behaviour and media habits. You need to track each of these changes and understand what implications they should have on the media strategy and plan to make it more effective. We don’t want to throw the baby out with the bath water, but some changes are critical.
Use mass media, but narrowcast. Many advertisers focus on higher Reach, whereas the need of the hour is higher frequency, given the low customer base for most brands and the noise in the media market.
As India races to reach a figure of 500 million netizens, traditional advertisers need to recognize that Digital can make a great support medium that effectively works at the lower end of the funnel to support their strong traditional media plans and I would urge advertisers to use their media agencies’ creative prowess to power their digital spends in a cost effective way. Your media agency can give you a sundar, sasta and tikau execution!
Temper your ambition in line with your resources. Media cannot achieve your objective, if you are under-resourced. Most advertisers seem to ignore this. At Madison Media, we are convinced that media can indeed move mountains, provided you provide resources for your plans adequately. Most don’t, but those who do, reap rich results.
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