Indian ad revenue to grow by 8.7% in 2013: Magna Global

MUMBAI: The Indian ad revenue market is projected to grow 8.7 per cent in 2013 with internet leading the growth at 31.2 per cent, says Magna Global’s ‘Global Advertising Forecast Report December 2012’ report.

As per the report, Indian advertising revenue grew by 2.6 per cent to a total of Rs 334 billion in 2012. The growth was led by Internet which saw a 68.1 per cent growth and Television that saw growth of 4.53 per cent.

Internet has moved up to third largest media category with 6 per cent market share after television and newspaper.

“Internet has been the clear beneficiary of decelerating Print. Growth is driven by mobile devices which have leapfrogged PC penetration. Online video is considered more and more by TV driven categories like FMCG and Automobile. Paid social and rich media formats continue to keep the display market invigorated,” the report said.

It also said that mobile and video advertising is expected to double its revenue while paid search and display will consolidate further. Television will see change in delivery mechanism with the digital foot print increasing to 38 cities. With Government of India opening up Radio stations for private players in 227 cities, the category will see a growth of 4.6 per cent.

Newspapers, the report believes, will benefit from political advertising due to state elections.

The Magna Global has also revised its forecast for media owners advertising revenue which is expected to grow by 3.1 per cent in 2013 as opposed to its earlier projection of 4.5 per cent in June this year.

“This is 1.4 per cent less than our previous forecast published in June 2012 (4.5 per cent). The revision is mostly caused by a slow-down in economic growth and continued economic uncertainty in Europe and the US, as well as the cautionary marketing spend that took place in the second half of this year,” the agency said.

On a global basis, 2013 will be a seventh consecutive year of decline for newspapers’ ad revenues (3.4 per cent) as fewer emerging markets now record enough growth to offset the rapid decline otherwise observed in developed markets. Magazines will decline by 4.3 per cent, still suffering from the combined pressure of television and the growing targeting capabilities of digital media.

The report also predicts that television advertising growth will slow down to 2.3 per cent, mostly due to the US market (US television represents about a third of global television: $62 billion in a $202 billion global market). Out-of-home ad sales (including cinema) will increase by 3.4 per cent while Radio will grow by an average 1.5 per cent.

Digital media revenues will increase by 13.5 per cent. The study said that the PC display format (banners, sponsorship) are now barely growing (6 per cent) as more investment shifts towards online video and mobile-based formats, and Paid Search remains robust (14 per cent).

Magna Global EVP, director of Global Forecasting and author of the report Vincent Letang said, "Tablets have been the fastest device ever to reach 50 million users in less than three years. As they become more affordable, we are seeing an explosion in the volume and the nature of mobile media usage. Marketers are gradually embracing the new marketing and branding opportunities: mobile advertising already represents $6 billion globally, i.e. 6 per cent of digital advertising and 1 per cent of total advertising. Magna Global is predicting the format to grow to $24 billion by 2017, reaching 14 per cent of global digital advertising and 4 per cent of overall advertising revenues."

The study revealed that in 2012, media companies around the world saw their advertising revenues grow by 3.8 per cent to total $479.9 billion (constant USD 2011 basis). This new estimate is slightly lower (-1.0 per cent) than the agency’s previous prediction in June 2012, with most of the difference coming from Western Europe (from -0.2 per cent to -2.8 per cent).

Amidst slow economic growth and weak advertising demand, the “quadrennial” events of 2012 were a minor driver for advertising expenditure globally, but provided mixed results regionally. The London Olympics were a huge audience success in the US, and the rights-holder NBC maximised monetisation across television and digital platforms, stealing share from direct competitors but increasing national TV spend as a whole. However, in most other markets the event was neutral or even detrimental for television.

The research company expects more robust advertising growth from 2014, as global economy stabilises, they have slightly reduced their mid-term forecasts. The company now expects 2014 to grow 6.0 per cent (previously 6.3 per cent) and 2015 by 4.9 per cent (previously 5.3 per cent). “Slowing-down factors are still at work however. Among them the switch to digital and the deflationary pressure it creates. Our 2012 Magna Global Media Cost Study showed that cost-per-thousand impressions (CPMs) are on average $39 in newspapers and $21 in magazines, across the 40 markets analysed. That’s more than television costs and five times more than online display.”

Meanwhile online advertising is becoming cheaper still as programmatic buying is developing. A recent Magna Global study forecast that 43 per cent of total online display will be traded through programmatic mechanisms (or exchanges) in the US by 2017. At the same time expensive premium formats like online video are starting to reduce their premium and align their CPMs with those of broadcast TV.

A deflationary digital media space means that, as marketers switch budgets from traditional media towards digital media to follow their consumers, they also take advantage of a media mix that comes cheaper. And unless they find themselves in a growing or highly competitive market, they are not likely to use the savings to increase the advertising pressure or share of voice. That mechanism is very much at work in the developed world and it will gradually affect some of the emerging ad markets over the 2014-2017 period, as digital media reaches a 20 per cent market share or more and programmatic buying tools become widespread, the company report stated.

Latest Reads
Essence hires Sonali Malaviya as VP - client partner

Essence, a data-driven global agency and a part of GroupM, has announced the appointment of Sonali Malaviya as the vice president - client partner. She will be reporting to Anand Chakravarthy, managing director, Essence India and will lead the Google relationship, based in the Gurgaon office.

MAM Marketing MAM
Bridge Music Academy launches the racist keyboard

MUMBAI: Earlier last month, Bridge Music Academy has launched the racist cover campaign aimed at educating children about racism and its effects. Conceptualised by Dentsu Webchutney, the campaign is supported by Culture Fox and Roland.

MAM Marketing MAM
QuikrHomes releases consumer sentiments report for 2018

MUMBAI: Leading digital real estate business QuikrHomes has released a comprehensive report that captures consumer sentiments for the year 2018. The report was conceptualised to understand consumer sentiments post regulatory changes in the real estate and what it means to the industry in 2018. 

MAM Marketing MAM
Law & Kenneth Saatchi & Saatchi appoints Delna Sethna as CCO

MUMBAI: Law & Kenneth Saatchi & Saatchi, Publicis Communications’ full-service creative agency, has named Delna Sethna as its chief creative officer across all its businesses. Prior to this, Sethna was leading some key global businesses such as P&G brands and Mondelez.

MAM Marketing MAM
2018 will be a year of video campaigns: WATConsult's Rajiv Dhingra

MUMBAI: If you see an advertisement on a website or your app, you are a well defined consumer of digital advertising. Thet ads on the website you visit are primarily revenue source for internet companies.

MAM Marketing MAM
Mother's Recipe undertakes initiative for war heroes

MUMBAI: India’s homegrown pickle brand Mother’s Recipe initiated a new campaign called, tribute to our motherland to salute the supreme sacrifice and selflessness of our brave men in uniform. Under this initiative, the company will contribute Rs 3 from the sale of every special edition Mothers...

MAM Marketing MAM
Is India ready for the impact of AI on marketing?

MUMBAI: From self-driving cars to voice assistants Siri and Alexa, artificial intelligence (AI) is expeditiously becoming popular. While one may think of AI only as intelligent robots or technology, it encompasses everything from Google’s search algorithm to e-commerce to geo-target and...

MAM Marketing MAM
Kajaria Ceramics touches patriotism with Akshay Kumar

MUMBAI: Kajaria Ceramics has launched another new ad campaign with its official brand ambassador and Bollywood actor Akshay Kumar. The company recently launched a TVC for its bathware solutions brand KEROVIT with Anushka Sharma.

MAM Marketing MAM
Duroflex launches sleep marathon with Milind Soman

MUMBAI: We are living in the time of the gig culture where staying up all night to meet project deadlines is celebrated. However, long term effects of lack of sleep are hardly discussed. Keeping this in mind, Happy mcgarrybowen, the creative agency from Dentsu Aegis Network, has conceptualised the...

MAM Marketing MAM

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories