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TV ad spend to grow at 20% to Rs 20,713 cr in 2016

MUMBAI: Ad spend on television is projected to grow at a healthy 20 per cent rate to touch Rs 20,713 crore in 2016, up from Rs 17,261 crore in 2015, as per the Pitch Madison Advertising Report 2016.

TV, which had grown by 22 per cent in 2015, had pipped print to become the largest medium contributing 39 per cent to the total ad pie.

With projected ad revenue of Rs 18,629 crore, print is expected to grow by 10 per cent in 2016. It grew by 11 per cent in 2015 to reach Rs 16,935 crore. Print is the second-largest medium contributing 38 per cent to the total ad pie in 2015.

Indian advertising, which had grown at a whopping 17.6 per cent in 2015, is expected to grow by another 16.8 per cent in 2016, taking the total advertising market to Rs 51,365 crore.

In the last two years, the ad market would have grown by 37.3 per cent on the back of 16.5 per cent growth in 2014.

The industry added Rs 6,586 crore to the market in 2015 alone. Contrary to popular belief, the main contributor to this growth continued to be FMCG, which contributed 31 per cent to the growth, compared to e-commerce players who contributed only 12 per cent. Auto and telecom also contributed 14 per cent and 13 per cent respectively to the growth.

The report stated that it took five years (2008–13) for the ad industry to add Rs 10,586 crore, but only two years to add Rs 11,885 crore and reach nearly Rs 44,000 crore.

The pace of growth of the advertising market certainly seems to have picked up, the report noted.

Digital ad spend crossed Rs 5,000 crore in 2015 and is expected to grow by another 30 per cent in 2016. With the highest growth of 29 per cent in 2015, digital continued its growth surge and has now established itself as a firm No. 3 in the ad mix, contributing 12 per cent to the total ad pie.

Though the absolute spend on search has increased, its share of the digital pie has gone down due to the fast proliferation of video, social and mobile display last year.

FMCG clients continue to be the largest contributor and spent Rs 12,364 crore (28 per cent) on advertising across media, followed by e-commerce players, who contributed 10 per cent by spending Rs 4,231 crore. Auto and telecom are next in line contributing 9 per cent and 8 per cent respectively.

Advertising continues to be a big boys’ game, with the largest spender Hindustan Unilever splurging approximately Rs 2,500 crore and the top 10 spenders accounting for 17 per cent of the total market and contributing 47 per cent to the top 50 list.

The top 10 spenders are Hindustan Unilever, Amazon, Procter & Gamble, Flipkart, Maruti Suzuki, Mondelez, Godrej Consumer, ITC, Snapdeal, and Reckitt Benckiser.

Commenting on the report, Madison World chairman Sam Balsara said, “Our prognosis for 2016 is that it is going to be yet another good year for media. In arriving at the numbers, we are conditioned by the fact that the Indian economy has become the fastest-growing economy of the world. Our GDP growth rate at 7%+ is the envy of the western world, now looking at India in new light.

“Our BJP govt tells us that it has made a number of structural interventions to prepare the economy for high growth and continues to remind us that they are strongly focused on stimulating the country’s economic growth for which pro-business policies are essential. At the same time, the government is not ignoring subsidies for the poor, which should also add to the purchasing power of rural India, and finally commodity prices including that of oil are likely to remain soft throughout 2016.

“Although Indian businesses have expressed concern that all the positive actions taken by the government have not resulted in growth on the ground, we feel that India Inc remains very optimistic about the country’s future and they will once again invest heavily in advertising to protect and gain market share of their brands and also launch a number of new brands and variants and e-commerce platforms and apps to capture the imagination and meet the requirements of modern India.”

Figures at glance: