Print, favourite medium for Indian advertisers

With the biggest cricketing event, ICC World Cup, already underway in the country, the sporting phenomenon is expected to earn revenue of almost Rs 1,000 crore. Chairman of Madison Communications Sam Balsara said Rs 500 crores ``is likely to be additional, just because of the World Cup, and the balance as part of organic growth across sectors.''

Outling the growth prospects of the Indian advertising sector at an event in Mumbai on Friday, Balsara said print had taken the bulk of market share in advertising spends last year. He said that advertising on print had marginally widened, which was good news for the medium, while that on radio, the traditional medium, ad spends had grown by 17 per cent.

Advertising by corporate brands in the print medium is expected to cross Rs 16,000 crore this year. Indicating that print has continued to be the largest sector in advertising, the Pitch Madison Advertising Outlook report has noted that it would continue its dominance with a share of over 40 per cent.

Advertising on television is expected to trail print and reach Rs 15,500 crore in 2015.

Print grew by 16 per cent to reach Rs 15,274 crore, and continues to be the largest contributor in the total advertising pie, with a share of 41 per cent. While dailies have grown by 17 per cent, Balsara noted that magazines too have grown by 6 per cent.

Moreover, of the total growth of around Rs 2,100 crore, nearly 85 per cent or Rs 1,800 crore has been contributed by elections and e-commerce players. Increase in advertising during festival season by smaller and retail advertisers has also contributed to the growth story. Balsara added that print is expected to grow by another 5.3 per cent in 2015.

In terms of volume of advertising space consumed, Hindi dailies continued to be ahead of English dailies, contributing 35 per cent of the total volume from dailies while English dailies contributed 24 per cent.

The report noted that the dominance of English newspapers is declining for the second year in succession and that Hindi newspapers are now firmly the largest contributor to the print advertising pie.

The fast moving consumer goods (FMCG) category, which has always been a dominant category advertising on television contributing to over 50 per cent, is now also the largest contributor to the print medium for the second year in succession, contributing 13 per cent.

Advertising on the print market is constituted by many categories, but FMCG, auto, education and real estate together contribute 43 per cent of the total print market, noted the report.

Growth factors

Pointing out the other contributing factors to growth in the advertising market in 2015, Balsara said increased government spending on print would be a major criteria, ``since the new government strongly believes in communicating with their electorate about their new thinking, concepts, etc.''

Moreover, new advertisers and separate sales of HD channels, ``which would hopefully attract new premium brands to advertising,'' and the facility of Geo targeting ads is also expected to attract more local, and retail advertisers on television.

New channel launches from existing networks, further push by e-commerce companies and mobile and social apps, spends on Assembly elections in Delhi and two other states, would all contribute to the projected 9.6 per cent growth this year, the Pitch Madison Advertising Outlook report has projected.

Radio spends

In the case of radio, the report has noted that the government is set to launch Phase 3 expansion by September 2015, ``and since a very large number of radio stations are expected to open up, this should pull in at least Rs 70 crore of additional advertising revenue in the last quarter of the year,'' said Balsara.

The Chairman of Madison Communications pointed out that the radio medium was extensively used by political parties during the election and was expected to continue this year.

Emerging electronic commerce players too advertised heavily in 2014. Radio was also extensively used by several e-commerce players. The report has indicated that the contribution by e-commerce players is expected to grow by 321 per cent in 2015. Touching on the inventory issue in India, Balsara said the higher inventory sold by all radio stations had resulted in a cluster in the medium.

In 2014, radio advertising saw a total revenue of Rs 1,285 crore, by adding Rs 190 crore. Real estate and home improvement were the highest contributor for the radio industry, followed by the advertising and marketing by telecom players and the direct to home (DTH) industry.

Digtal play

Though advertising on the digital medium has grown phenomenally over the last five years, and is now larger than the outdoor medium, cinema and radio put together, the report has indicated that adspend on digital would be 12.6 per cent of the total market.

Digital would continue to be the only medium to grow market share, at the expense of television and print and out of home (OOH) media (hoardings). Radio and cinema have maintained overall share.

In terms of growth rates, the digital medium grew the most in 2014, followed by radio, print, TV and OOH in percentage terms.

Global market

Compared to India’s growth of 16.4 per cent, global advertising market grew by just 5.3 per cent. In absolute terms, Balsara said, the global advertising market is now estimated at $411 billion, whereas India is at $6 billion. ``This puts India’s share at a far from respectable 1.50 per cent,'' Balsara outlined.

India maintained its 12th rank in the global ad market. The US further increased its share which now stands at almost 43 per cent of the global market. China also increased its contribution from 11 per cent to 14 per cent and has overtaken Japan as the second largest advertising market. Japan has dropped significantly in terms of contribution from 13 per cent to 9 per cent, showed the report.

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