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SPNI’s Rohit Gupta disagrees with Madison’s outlook, expects TV ad to grow by 15% in 2016
MUMBAI: While Madison Media has downwardly revised its projections for TV advertising to 11% from the projected 20% in 2016, there are some in the industry who disagree with this pessimism. One of them is Sony Pictures Networks India (SPNI) president Rohit Gupta.
Gupta said that the original projected number was aggressive. “I had said at the time that the 20% ad growth projection for television was aggressive. At that time, I had said that I expected growth to be 15%. That I expect will still happen.”
Gupta bases his optimism on several factors. “The rainfall has been good, and the economy is picking up and doing well. Corporate spending will grow. Diwali should be excellent. New channels are adding to the FCT. I don’t agree that the FCT has fallen. The big genres that make a difference like Hindi GECs and sports have done well. We had an excellent IPL,” he said.
Gupta, however, concedes that the e-commerce segment, as the Madison report noted, has been impacted, as that category is seeing consolidation and belt tightening. In his view the long tail has been affected where the smaller players in the category who used to advertise and used to add to the pie have gone away.
However, Gupta is confident that come festive season the big players will return and be very active. He expects other categories to step up to the plate and compensate.
“Auto is doing well as are telecom, mobile handset manufacturers and FMCG,” Gupta said.
According to Madison’s mid-year review, e-commerce has slashed its ad expenditure by 37% over the year-ago period. Fashion, jewellery, travel and tourism sectors have also reduced their ad spends in the first half of 2016.
“The drop in growth rates in TV is led by a lower contribution of e-commerce, which is a category known to pick and choose high-priced inventory/impact programmes and substituted by FMCG users who resort to everyday advertising and seek high value for money,” Madison Media, OOH CEO Vikram Sakhuja stated.
The drop in growth rate of TV advertising is the main reason why the total ad market growth in H1 2016 is only 12.9%. Growth for TV advertising in 2016 was earlier projected at 20%.
The agency has thus revised downwards its full-year estimate for ad spends across media from 16.8% to 13.2% in 2016.