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TV ads worth Rs 850 cr lost in Nov-Dec, '17 ad-ex forecast at 13.5pc: Pitch Madison Report

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MUMBAI: The much awaited Pitch Madison Advertising Report 2017 was released at a function held in Mumbai by Crompton Greaves Consumer Electricals MD Shantanu Khosla. Releasing the report, Khosla highlighted to advertisers the importance of truthful advertising. He said, “Truthful advertising is not only the right thing to do, but also great for the business.”

Key findings:

• Growth in the Indian advertising market slowed down to 12.5 per cent in 2016, thanks to the tsunami that hit in the form of demonetisation. Demonetisation knocked off Rs. 1,650 crore from ADEX in November and December 2016. Growth in 2015 over 2014 was as high as 17.6 per cent.

• The ADEX growth in the first half of the year was slow at 13 per cent, but accelerated to 16 per cent by October 2016, before 'de-growing' in November and December 2016 by eight per cent.

• Growth came mainly on the back of  Digital, which grew by 40 per cent plus, and now stands at Rs. 7,315 crore, 15 per cent of the market.

•  Growth in traditional media (all media other than digital), slowed down to 8.5 per cent.

• he dominant category continues to be FMCG contributing 32per cent, followed by Auto at 10 per cent and Telecom 8 per cent. E-Commerce that had taken ADEX (only TV + Print + Radio) by storm in 2015, contributed only 4 per cent in 2016.

• TV grew by 9 per cent and print only by 7 per cent in 2016.

• Radio stood out with a growth rate of 13.2per cent although on a small base.

• Nearly 50 per cent of Print’s growth of Rs. 1,216 crore is accounted by only four categories FMCG, Auto, Education and BFSI. Nearly 44 per cent of TV growth of Rs. 1,570 crore is accounted by FMCG.

• Advertising continues to be a Big Boys’ game with the largest spender HUL spending approximately Rs. 2,500 crore and top 10 spenders accounting for 16 per cent of the total market and contributing 45 per cent of the top 50 list.

• Unilever, Amazon and Procter & Gamble continue to be the top three advertisers.

• Many new entrants entered the Elite top 50 list like Patanjali, OPPO Mobiles, Nissan Motors, Reliance JIO, Vivo Phone, SBI and Videocon.

Says Madison World chairman Sam Balsara, “Our expectation is that the market will grow 13.5 per cent in 2017, but growth rates will vary widely from month to month.We expect the market to grow by just 8 per cent for the period January to April 2017, 14 per cent from May to October 2017 and 24 per cent in November and December 2017, given that market had 'de-grown' by 8 per cent in November and December 2016. Our optimism for good growth in ADEX starting May comes on the back of several govt initiatives- from high government investment in infrastructure, lower corporate and personal taxes for small and medium companies and the masses, good government support for the poor and consequently the wide scale expectation of yet another year of high GDP growth.”

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In the current environment, Madison advises:

1. Take Advantage of weaker January-April months and intensify campaigns to get good Impact during this period.

2. Use Digital, but less for top of Funnel Awareness and more for Mid/Bottom Funnel Consideration, Leads and Advocacy.

3. Don’t become a slave to Media Ratings / Readership Data. Ride it and use it as a Guide, Not as a Crutch.

• The original forecast for February 2016 was 16.8 per cent which was brought down to 13.2 per cent in August 2016. The projection now for 2017 is 13.5 per cent.

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