Indiantelevision.com Team

(23 February 2009 10:00 pm)

MUMBAI: India will feel the impact of the economic slowdown with advertising growth softening to 7.2 per cent in 2009, from a bullish run of 14.4 per cent in the prior year.

The latest research published by Media Partners Asia (MPA) also shows that advertising in Asia Pacific will fall by 1.1 per cent in net terms in 2009, representing the first decline the region will experience since the 1998 financial crisis.

MPA, though, sees some recovery in 2010, projecting 5.3 per cent growth next year.

India will also rebound to foster an ad growth of 9.3 per cent, though still staying below double-digit growth.

"The gap between perception and reality is closing fast with ad demand deteriorating in key markets, depressing earnings for media owners," said MPA executive director Vivek Couto. "A sustained recovery is unlikely without a strong pick-up in the global economy, expected to occur next year.”

Previously, MPA guided for 1.5 per cent growth this year but the advertising fallout in Japan has intensified while softness in India and China is more marked than anticipated. There could also be more downside revisions due to potentially worse declines in Australia as well as a weaker India outlook.

Despite the Beijing Olympics, Asia Pacific ad growth moderated to 3.4 per cent in 2008 versus 6.7 per cent growth in 2007. In spite of strong growth in China, advertising was weak in Australia, Korea and Japan during the fourth quarter, while India also softened in Q4 along with Hong Kong, Singapore and Malaysia.

Advertising in Asia excluding Australia and Japan grew by 11.1 per cent in 2008, though MPA predicts a marked deceleration in this particular region to 4.2 per cent growth in 2009 prior to renewed momentum in 2010 with 9 per cent growth.

Regional growth will continue to hover around China, India and Indonesia with MPA forecasts suggesting each of these markets will grow at a CAGR of 10 per cent over the next five years in spite of a near-term slowdown.

Online media will continue to grow both ad revenues and market share. While Asian online ad growth is likely to moderate to 13 per cent in 2009 from 20 per cent last year, its market share will increase from 11.1 per cent to 12.7 per cent this year, driven largely by increases in Japan, Korea, China, Taiwan and Australia.

Print media, including newspapers and magazines, will see ad sales decline by more than 5 per cent this year while market share will dip below 30 per cent. TV market share will remain stable at 35.5 per cent, though TV advertising itself will grow by only 1.5 per cent in 2009 versus 6 per cent last year.

Terrestrial TV advertising, more than 70 per cent of the Asia Pacific TV ad pie, will decline by almost 5 per cent while pay-TV will see growth sharply decelerate to 6.7 per cent in 2009 versus 15.1 per cent last year.