India leads ad spend growth in Asia Pacific: Nielsen

BANGALORE: India leads the ad spend growth in Asia Pacific in the second quarter of this year as its economy speeds up while many parts of the world still stay troubled.

India witnessed a 28 per cent Year-on-Year (YOY) growth and a 32 per cent growth in the second quarter of 2010 over the earlier year, according to a Nielsen survey on media ad spends on mainstream media (Television, Newspaper & Magazine).

In Q2 2010 double digit ad spend growth was recorded across 11 of the 12 markets compared to Q2 2009

In Q2 2010 double digit ad spend growth was recorded across 11 of the 12 markets compared to Q2 2009 
Overall, across the 12 markets in Asia Pacific the Q2 ad spends showed a 15 per cent lift over Q2 2009, and a 17 per cent lift in the first half of 2010 over the same period in 2009.

By the close of the second quarter of 2010, the vast majority of marketers and media organisations were back to business as usual, with advertising activity across mainstream media outlets showing accelerated growth versus the previous year.

The ever increasing confidence levels of Indians in the economy, as reflected in the Q2 2010 Nielsen Global Consumer Confidence Survey, which India topped, has instilled greater confidence in Indians to spend on items that they want and need.
 This growing demand for products and services is not lost on marketers who have expanded their advertising budgets compared to the contraction they experienced during the economic slowdown.

"The resurgence of economic confidence buoyed by strong equity markets and the lead up to the festive season means that marketers will seek to maximize attention on their brands. Advertising volume is a lead indicator of market sentiment in this instance and will continue to thrive on a strong domestic economy,” said The Nielsen Company President-India Piyush Mathur.
"Consumers and marketers have more faith in the economy now and seem to be more confident of their financial prospects in the near future. The ‘recessionary mindset’ is fast becoming a thing of the past and marketers are using advertising strategies to reinvigorate brands by strengthening their visibility in mainstream media resulting in accelerated growth in media spends," added Mathur.

Of significance is the fact that after the first half of 2009 which saw a minimal three per cent lift over 2008, the first half of 2010 recorded an impressive 20 per cent increase over the “Pre GFC” (Global Financial Crisis) period of 2008. India recorded a 33 percent increase in the first half of 2010 over the same period in 2009.

Growth Drivers

Across the region, advertising spend is highest on television, but the largest proportion of India’s media spend was garnered by newspapers YOY for a 12 month period up to June 2010.

Newspapers are the highest media spenders and YOY growth drivers in India

Newspapers are the highest media spenders and YOY growth drivers in India 

Newspapers are also the highest ad spend growth drivers in India, growing at 32 per cent YOY; the highest percentage growth for newspaper ad spends across all 12 markets covered in the Nielsen survey. Overall, newspaper ad spends grew by 17 per cent YOY in the region.

Television followed newspapers in ad spend growth and grew at 24 per cent YOY in India and 16 per cent regionally.

Amongst mainstream media, magazines saw an eight per cent YOY increase in ad spends in India and a nine per cent growth across the 12 markets in the Asia Pacific region.

All other media combined like radio, outdoor, pay TV, Cinema, etc. showed a growth of 31 per cent in the 12 months up to June 2010 in India. Ad spends by all media sectors saw a growth of 28 per cent YOY in the country.

A quarterly comparison of ad spends in India shows that in Q2 2010, all mainstream media recorded strong to bullish double digit growth to finish 32 per cent ahead of the same quarter in 2009.

Overall, ad spending continued to be dominated by newspapers with a 53 per cent share of spend, followed by television with a 28 per cent share.

Top Advertising Categories

The top 10 categories represented 51 per cent of all mainstream media ad spend in India for the 12 months up to June 2010, and a robust 28 per cent increase in activity YOY.

Top ten advertising categories in India by share of spend in mainstream media for the 12 months to June 2010

 Top ten advertising categories in India by share of spend in mainstream media for the 12 months to June 2010

All the top categories recorded a double digit growth. However, the ever dominant services category, which represented over eight per cent of all ad spend in India, led the surge with an impressive 31 per cent increase YOY, followed by food & beverages, which grew by 27 per cent in ad spend YOY.

Among the biggest increases YOY were third ranked personal care/personal hygiene (+41%), followed closely at fourth place by banking /finance / Investment, with a 38 per cent increase.

Education which grew in media spends by 14 per cent YOY rounded off the top five categories in terms of their ad spend.

A quarterly comparison shows that the Top 10 categories represented over half of all media advertising in Q2 2010 and eight of the Top 10 categories recorded double digit growth over Q2 2009. These were led by top ranked services (+37%), food & beverages (+37%) and 3rd ranked personal care / hygiene (+11%).

The biggest percentage growth over Q2 2009 was for banking / finance / investment, with a massive 79 per cent increase.
Top ten advertising categories by media spend in Q2 2010 and past 3 quarters

Top ten advertising categories by media spend in Q2 2010 and past 3 quarters

Top Spending Products

Among the elite group of ad spenders were three telecom sector products, two beverages and a more varied mix of products. Of special note is the first appearance of 10th ranked Jaypee Infratech, which is engaged in the development of the Yamuna Expressway and related real estate projects, with an initial public offer of shares launched in April 2010.

The Nielsen Consumer Confidence Index

Earlier, The Nielsen Consumer Confidence Index was conducted between 10 May and 26 May 2010, among over 27,000 Internet consumers in 55 countries throughout Asia Pacific, Europe, Latin America, the Middle East and North America. The study was based on consumers’ confidence in the economy, job market, status of their personal finances and readiness to spend.

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