A weakening Indian economy has prompted GroupM to cut by almost
half its India ad growth forecast for 2012, from 12 per cent
to 6.6 per cent.
its mid-year forecast, GroupM has downgraded advertising expenditure
in 2012 to Rs 355.92 billion, from its January estimate of
Rs 373.97 billion. The WPP agency had pegged the ad spend
size in India in 2011 at Rs 333.88 billion, up 13 per cent
from the earlier year.
has darkened the ad horizon is a feeble growth in the first
half of the year with inflation staying stubborn, rupee depreciating
and government not moving forward on policies. Though elections
are source of additional advertising, political spending limits
per candidate have been applied more strictly. "This
resulted in the spends being lower than expected," the
new forecast said.
however, expects ad demand to improve in the second half.
"This is most likely to happen with larger categories
like Telecom which reduced expenditure considerably in the
first half of the year: most of the pullback has been among
large national advertisers rather than regional players. Perhaps
as a result, there is a reduction seen in the more premium
media properties such as sponsorships," the report said.
television is the most affected medium by first-half pullbacks,
it will still constitute the highest share with 41.6 per cent
amongst other mediums.
growth of the medium is expected to be 5.6 per cent to gross
Rs 148.12 billion.
had the cricket World Cup which attracted an incremental Rs
8.5 billion. This was obviously expected to drop out in 2012,
but April-May IPL cricket did not perform as strongly as previously
to compensate. In addition, the Telecom category cut down
spends substantially in the first half of the year. Financial
services have been adversely affected by poorer economic conditions
here as elsewhere in the world. Even consumer durables spent
less in the first half of 2012 than the prior year period.
Occupancy of premium inventory has decreased with advertisers
choosing to stay with safer tried-and-tested formats,
the report says.
however, expects a bounce back in 2013 and predicts ad spend
growth to climb 14 per cent that year.
(dailies) growth is expected to be a little less than formerly
expected. The regional publications have expanded into new
markets and have actively developed local advertisers, largely
in the retail categories. They have, therefore, added some
ad volume, even though the larger national advertiser categories
have scaled back investments.
predicts the medium to have 39.2 per cent share with five
per cent growth in 2012. Print, as a medium, is expected to
grow to Rs 139.68 billion from Rs 133.03 billion in 2011.
radio segment has been impacted by the slowdown in the first
half. Phase III FM auction has been pushed to 2013, so delaying
this uplift to next year. Individual markets have seen very
varied demand according to local retail conditions. The medium
will have 4.5 per cent share and is likely to see 9 per cent
growth, higher than TV, newspaper and outdoor.
growth in the radio industry is expected to be 9 per cent,
touching Rs 15.89 billion. The medium is expected to grow
at 10 per cent in 2013.
agency has also revised its 2012 outdoor growth forecast from
nine to six per cent. Reduced consumer demands and the current
global turmoil have caused 2012 budget reductions in categories
including telecom, automotive, banking, financial services
and insurance (BFSI), real estate, and FMCG vis-a-vis 2011.
The trend began in 2011 and continued into the first quarter
of 2012, which is considered to be seasonally very important
In the first half of 2012, there has, however, been increased
investment from the entertainment and media category in OOH
medium. The reduction is affecting the metro markets but not
the nonmetros and smaller towns, where demand from local
advertisers in a few categories like jewelry, apparel, Education,
real estate and construction has offset the withdrawal of
national activity. Smaller towns are actually seeing ad demand
rise as much as 25 per cent.
ad industry is estimated to be around Rs 17.98 billion in
2012, which will grow to Rs 19.06 billion by next year.
Digital medium ad growth remains unchanged since the last
forecast. Given that it typically has smaller outlays and
is very response-based, it has not been affected like other
media. Digital medium with share of 5.5 per cent is expected
to grow at 30 per cent, more than any other medium.
Retail Media and Cinema
Media and Cinema are also performing as expected. Even though
telecom advertising fell in the first half, categories like
FMCG and durables have risen in these media. As previously
envisaged, destinations in smaller markets have experienced
raised demand of about 10 per cent. Leisure destinations have
also expanded their presence in these smaller markets that
has helped drive spends, the report said.