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TV AdEx to grow 16% to reach Rs 224.46 bn in 2015: GroupM

MUMBAI: Ad spend on television is projected to grow at 16 per cent to touch Rs 22,446 crore (Rs 224.46 billion) during the calendar year 2015, media agency GroupM has said in its latest forecast report on ad expenditure ‘This Year Next Year’ (TYNY).

According to TYNY, TV channels will be especially bullish with cross-media integration via their own digital platforms. The big-ticket event this year is the ICC Cricket World Cup in February and March, with scope for programming and advertising innovation during the tournament.

The overall advertising expenditure for the year is expected to reach Rs 48,977 crore (Rs 489.77 billion), representing a growth of 12.6 per cent over the corresponding year.

Flushed with funds and increased competition, the e-commerce category is expected to lead the charge in 2015 in terms of ad spend growth, although from a relatively smaller base than more established categories, the report said.

It further stated that traditional categories like FMCG, auto and telecom are expected to do better than the previous year. More multinational entrants under single-brand retail are likely to add to ADEX spending in the retail category.

The recent rate cuts by the Reserve Bank of India will stimulate the banking sector, the report said. The market will also see higher spends from the central government as they showcase their new initiatives.

The AdEx on digital media is projected to grow at 37 per cent to touch Rs 4,661 crore (Rs 46.61 billion) in 2015. Digital has been growing at an average rate of 35 per cent over the last two of years.

This year within digital media video, mobile and social will be the biggest growth drivers, the report revealed.

The print media AdEx is projected to grow at 5.2 per cent as against the 2014 estimate of 7.6 per cent. However, print magazines continue to be on the decline as several magazine outlets are looking at digital delivery mechanisms.

The surprise element in the media mix has been cinema advertising, which finally closed 2014 with a 25 per cent increase. This year too, GroupM estimates this media category to grow at 20 per cent, as multiplex chains consolidate, leading to a more organised and accountable environment.

With technology fuelling exhibition and distribution, especially in smaller towns, consumers will get a better viewing experience, the report stated.

“Digital, TV and cinema are expected to be the high growth media channels. Penetration of smartphones, coupled with the popularity of online video, is making FMCG spend more on digital. Another trend is the emergence of categories like e-commerce and the increased competition in telecom, both of which are aiding the growth of traditional media channels including print and TV apart from digital,” GroupM South Asia CEO CVL Srinivas said.

“With a new government coming to power, the negative sentiment has lifted but there is still some bit of caution among advertisers. We continue to operate in the same zone as last year at an overall level. We are seeing a lot more confidence among local businesses to invest in brand building than before. This is a positive sign for the industry.”

Ad spends up 12.5% in 2014

According to the report, ad spends grew 12.5 per cent to Rs 43,490 crore (Rs 434.9 billion) during the calendar year 2014 on the back of heavy ad spending due to the general and state elections and categories like e-commerce and telecom.

The FMCG sector, which contributes nearly a third to the AdEx, had a steady year, growing broadly in line with the industry average, the agency said in its report.

Last year began with uncertainties on the political and economic front; however, despondency gave way to cautious optimism once a stable government came to power.

‘This Year, Next Year’ is part of GroupM’s media and marketing forecasting series drawn from data supplied by holding company WPP’s worldwide resources in advertising, public relations, market research and specialist communications.