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Elections to raise advertising growth this year: GroupM

By Viveat Susan Pinto, Business Standard, Mumbai - February 12, 2014

Advertising by political parties if excluded, overall ad growth for industry will stand at 9%

Generous advertising by political parties is expected to raise growth of the ad & media sector this year. In its annual forecast, GroupM, the country's largest media agency, has said overall advertising growth will stand at 11.6 per cent this year, against 10 per cent last year; the sector, currently pegged at Rs 38,597 crore, will stand at Rs 43,065 crore by the year-end.

However, if advertising by political parties was excluded, overall ad growth for the sector would stand at nine per cent, C V L Srinivas, chief executive of GroupM South Asia, said at a media briefing on Monday. The marginal drop in overall ad growth would be on account of TV advertising, whose growth would stand at 12 per cent, Srinivas said. Last year, growth in TV advertising was 13.8 per cent. In value terms, TV advertising will remain the largest contributor to the total ad pie at Rs 18,883 crore, against Rs 16,860 crore last year.

Print advertising, which stands at Rs 14,248 crore and is the second-largest contributor to advertising in India, will see 8.5 per cent growth, compared with 4.6 per cent last year, ending the year at Rs 15,459 crore. This growth, Srinivas said, would be led by regional advertising in newspapers, as companies in sectors such as telecom, fast-moving consumer goods, retail and automobiles increasingly targeted tier-II and III markets. "This trend has been visible for some time now,” Srinivas says, adding, "There will be acceleration this year.”

The outdoor, retail, radio and digital segments would also grow more than last year, he said. Outdoor will grow nine per cent, retail eight per cent, radio 10 per cent and digital 35 per cent.

Generous advertising by political parties is expected to raise growth of the ad & media sector this year. In its annual forecast, GroupM, the country's largest media agency, has said overall advertising growth will stand at 11.6 per cent this year, against 10 per cent last year; the sector, currently pegged at Rs 38,597 crore, will stand at Rs 43,065 crore by the year-end.

However, if advertising by political parties was excluded, overall ad growth for the sector would stand at nine per cent, C V L Srinivas, chief executive of GroupM South Asia, said at a media briefing on Monday. The marginal drop in overall ad growth would be on account of TV advertising, whose growth would stand at 12 per cent, Srinivas said. Last year, growth in TV advertising was 13.8 per cent. In value terms, TV advertising will remain the largest contributor to the total ad pie at Rs 18,883 crore, against Rs 16,860 crore last year.

Print advertising, which stands at Rs 14,248 crore and is the second-largest contributor to advertising in India, will see 8.5 per cent growth, compared with 4.6 per cent last year, ending the year at Rs 15,459 crore. This growth, Srinivas said, would be led by regional advertising in newspapers, as companies in sectors such as telecom, fast-moving consumer goods, retail and automobiles increasingly targeted tier-II and III markets. "This trend has been visible for some time now,” Srinivas says, adding, "There will be acceleration this year.”

The outdoor, retail, radio and digital segments would also grow more than last year, he said. Outdoor will grow nine per cent, retail eight per cent, radio 10 per cent and digital 35 per cent.

The digital segment would see the emergence of niche platforms, especially in social media, resulting in fragmentation of audience and, consequently, advertising, Srinivas said. On the TV advertising front, adversioning, or targeted TV advertising, will be a major trend. Through this, channels will be able to beam different sets of ads to people in different cities. Companies such as Amagi and Vubites, part of the Rediff family, have already stepped into this space. With the help of Amagi and Vubites, 70-80 channels already provided targeted advertising to about 2,000 big and small advertisers, said Prashanth Kumar, managing partner (South Asia), GroupM Trading.

This year, niche music and sports channels will split the advertising audience, which has largely gravitated towards cricket, Bollywood and English music, said Suku Murti, managing partner, GroupM ESP.

GroupM estimates the market for mobile advertising will grow, as will instream advertising — the constant feeds platforms such as Facebook and Twitter throw up at brands.
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