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TV advertising expenditure to grow 9.5% in 2015: Pitch Madison
MUMBAI: The television advertising expenditure is set to grow 9.5 per cent in 2015 and touch Rs 15,500 crore (Rs 155 billion), up from Rs 14,158 crore (Rs 141.58 billion) in 2014, according to Pitch Madison Media Advertising Outlook 2015.
The growth will be aided by the ICC Cricket World Cup 2015, higher ad rates, bundling of HD channels, new channel launches, and geo targeting.
The report says that the ongoing cricket World Cup is one of the major drivers for the television AdEx growth garnering ad revenue of around Rs 1,000 crore (Rs 10 billion), of which approximately Rs 500 crore (Rs 5 billion) is likely to be additional revenue.
The balance will be part of organic growth across sectors, mainly BFSI, telecom, consumer durables, automobile, and others.
The report also states that the overall AdEx is expected to grow 9.6 per cent to take the total advertising market to Rs 40,658 crore (Rs 406.58 billion) by the end of 2015.
The five main categories that contribute to the TV market are FMCG, telecom, digital, e-commerce, and auto.
AdEx grew by a whopping 16.4 per cent in 2014, aided strongly by general and state assembly elections and aggressive spending by the e-commerce players.
Excluding e-commerce and elections, the AdEx growth last year was 5.6 per cent. It is pertinent to note that e-commerce had started spending big on television only from 2014.
“2015 promises to be yet another exciting year of high growth for the advertising market. But the market will be characterised by some uncertainty in the area of media deliveries, given that BARC TV ratings are likely to appear in the second quarter using new Target Audience Classification System – NCCS, making comparison with TAM data on SEC classification difficult, and given the uncertainty that exists over the next round of readership survey,” the report states.
The Pitch Madison report states that the print advertising market is projected to grow by 5.3 per cent in 2015, taking the total print market close to Rs 16,100 crore (Rs 161 billion).
While print continues to be the largest contributor to spends, its share in the overall ad pie has steadily fallen from 47 per cent in 2008 to 41 per cent in 2014, and this is expected to fall to 39.6 per cent in 2015.
Despite the steady fall in share, print is ahead of TV with a projected share of 39.1 per cent share.
One interesting finding of the report is that the FMCG category, which has always been a dominant category on TV contributing to over 50 per cent, is now the largest contributor to print for the second year in succession. However, FMCG’s contribution to print AdEx stands just 13 per cent.
The print market consists of many categories, but FMCG, auto, education, and real estate together contribute 43 per cent of the total print market.
The report projects a slight dip in radio’s share in the advertising pie by 0.2 per cent to 3.3 per cent. As the radio industry waits for the long-delayed Phase III auctions to finally kick off in 2015, the medium is expected to grow by 6 per cent, taking the total radio advertising market to Rs 1,362 crore (Rs 13.62 billion).
Phase III auction and the launch of new stations are expected to add Rs 70 crore (Rs 700 million) in ad revenue from retail advertisers.
Digital, the report says, is expected to maintain the momentum and grow in high double digits, approximately 30 per cent, with revenues expected to reach Rs 5,135 crore (Rs 51.35 billion). Digital’s share in the overall advertising pie has also increased from just 2 per cent in 2008 to over 10 per cent in 2014. In 2015, it is expected to be 12.6 per cent.
The report adds that digital has grown phenomenally in the last five years and is now larger than outdoor, cinema, and radio put together. The search wagon, though, has slowed down, with display, video, and mobile playing a more prominent role than search.
The Pitch Madison report expects outdoor advertising market to grow by 6.2 per cent, taking its total to Rs 2,371 crore (Rs 23.71 billion). With outdoor expected to add Rs 138 crore (Rs 1.38 billion) in 2015, the medium’s share in the total advertising pie is expected to dip by 0.2 per cent to 5.8 per cent.
On a positive note, higher OOH spends are expected from e-commerce companies, retail, telecom, apparel, jewellery, handset, and infrastructure companies.
Cinema is expected to grow by 9.2 per cent, taking the total cinema advertising revenue to over Rs 200 crore (Rs 2 billion). With total revenue of Rs 184 crore (Rs 1.84 billion) in 2014, the medium currently contributes 0.5 per cent to the advertising pie.
In a separate forecast made by GroupM, the overall advertising expenditure is expected to reach Rs 48,977 crore (Rs 489.77 billion) in calendar year 2015, representing a growth of 12.6 per cent over the corresponding year.
According to the agency, ad spends on television are projected to grow at 16 per cent to touch Rs 22,446 crore (Rs 224.46 billion) during the calendar year 2015.