ADAPTION FOR SURVIVAL IN 2012
In spite of the global economic uncertainty and moderate economic growth, the Indian media and advertising industry registered a healthy growth rate of 12%. The latest report of FICCI-KPMG projects a 15% growth rate for industry by 2016. A number of recent reports, namely Pitch-Madison Outlook, Mindshare Indian Media Forecast 2012 and KPMG-FICCI Report, hint at robust, consistent growth rates for the industry in 2012. While the growth projections of all three reports may vary, none reflect a negative, alarming projection for the next four years. The KPMG-FICCI Report, which was launched last week, makes healthier promises than what the industry has been anticipating. The report projects that the media and advertising industry will grow at a consistent rate of 15% by 2016. As predictable from the last three years’ estimates, television and print continue to be the dominant mediums, garnering maximum share of the total advertising revenue. What could come as a surprise to some is a significant increase in spends on media platforms such as animation and visual effects, digital advertising and gaming. Though under-monetized, digital advertising grew at a healthy rate of 45%. Radio too is expected to display a healthy growth rate after the advent of Phase III reforms, the report states. Dr Rajiv Kumar, FICCI Secretary-General, believes that the key developments are rise in digital content consumption, launch of diverse content delivery platforms and strong consumption in Tier-2 and Tier-3 cities. “Rising footprint of players in the regional media, rapidly increasing new media business and regulatory shifts are key drivers of growth,” he says. The film industry also witnesses a steady growth and several reasons to cheer as several movies crossed the Rs 100-crore mark in domestic collections and Rs 30-crore mark in cable and satellite rights. Overall, 2011 was a challenging year for the media and advertising industry as the first quarter of the year registered robust growth in ad spends, but the next three quarters showed imbalance in growth. Broadly, the challenge was to live up to the statistical promises of growth rates which ranged from a possible 7% to 15%. While most of the reports mentioned here have promised a robust growth of the industry, survival and growth of advertising rests in adaption and execution of powerful creative and innovative execution of all forms of communications. TELEVISION Television continues to dominate the media domain in terms of growth and penetration along with print as well as the proportionate share in the total advertising pie. It continues to remain the largest medium for media delivery in India in terms of revenue. It represents around 45% of the total media industry. Experts believe that the Rs 329 billion TV industry will grow significantly as its penetration is still around 60% in India. While penetration, number of C&S homes and number of channels (623) has significantly gone up, the advertisement rates have declined, possibly due to global slowdown. Mandatory digitization of cable networks in India could prove to be a major game changer of the business. PRINT The Rs 209 billion Indian Print media industry grew by a promising 8.4%, slightly lower than the projected 8.5% growth. Despite a large number of players entering every year, Print strongly dominates the key Indian markets. The industry saw a 22% increase in the number of advertisers last year. Moreover, education, automobile, FMCG and Real Estate continue to remain the largest spenders on the print media. The good news, however, is that despite negative speculations, India is the only market where the print medium continues to grow at a slow, but steady rate in India. FILMS OUTDOOR DIGITAL DIGITAL “India is the third largest Internet market today. Industry estimates are that India has close to 120 million users. The medium will see large, explosive growth through videos and mobile in the years to come.” Vikram Sakhuja “Despite growth of the usage of digital medium, it doesn’t constitute more than 3% of total spends of advertisers’ money. The biggest challenge for the medium is monetization.” RADIO “In the last few years, the growth phenomenon of the radio industry has become increasingly contextual and complicated. However, a positive sign for the radio industry is that new brand categories have shown interest in the medium but at the same time expectation from the radio medium has increased.” Rabe T Iyer “Players should not just play film music but focus on attractive packaging of music. The best way to do this is to consolidate thoughts of creative agencies, clients and radio players for innovative radio content. This will help the creative agency understand the industry better and the players in turn can bring innovation to the medium.” TELEVISION “Average TV viewing time by an Indian consumer is less than that of many developed countries. This is expected to significantly go up in the next five years which will fuel the TV growth in India.” Punitha Arumugam “Expansion, efficiency, engagement and encompassing nature of television will be crucial this year. Penetration, average TV viewing time and relevant messages will drive the medium’s growth.” OUT OF HOME “OOH is the art of seeking attention and the idea there by has to engage people. Basics should be clear while planning an OOH campaign along with keeping in mind the relative context. OOH and digital media can work perfectly to generate a magnifying effect.”
The film industry was arguably the most benefited sector as against the dominant print, TV and outdoor mediums in 2011. In terms of revenue generation, films are expected to grow at 10.1% CAGR from Rs 93 billion in 2010 to Rs150 billion in 2016 coupled by the music industry which registered a 5% growth over the previous year and touched Rs 9 billion in 2011. Big film and music launches like Ra One, Rockstar and Kolaveri Di contributed significantly to the sector.
The report reflects that the outdoor media sector was hit worst by the economic slowdown and registered a growth of 7.6% in 2011 over 2010. The industry saw a reduction in spends by telecom players who have been the biggest spenders on the medium in the last five years. Though OOH continues to be used by various brands, there are still 4-5 industries which dominate its usage. Airport and other transit media have been growing most consistently. Advertisers are also spending heavily on malls.
Digital is clearly the next destination of advertisers. The report reveals that the growth trajectory of the medium continues. Advertising on the medium grew by over 40% and surprisingly, digital ad spends reached a new high; approximately 5% of the total spends of Indian advertisers. Increase in 3G penetration, growth in smartphone usage and mobile Internet impacted Internet and average time spend on Internet significantly. What could be the next big thing on Internet is an adverse impact on traditional methods of print and advertising as many youth-oriented advertisers used innovative and interactive means to advertise online. Print and outdoor media were less preferred for a few launches during the IPL and Cricket World Cup, where a huge chunk of the ad pie was spent.
Rajan Anandan
MD, Google India
CEO, South Asia, GroupM
Apurva Purohit
CEO, Radio City
Business Head, Big FM
LV Krishnan
CEO, TAM Media Research
Group CEO, Madison Media
Anuradha Aggarwal
VP-Brand Communications, Insights & Online, Vodafone India
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