How much will the adex grow?
The India chapter of the International Advertising Association (IAA) recently hosted the third edition of IAA ‘Retrospect & Prospects’ the annual adex forecast discussion session, which saw media heads, Shashi Sinha, CEO of IPG Mediabrands, Vikram Sakhuja, Group CEO Madison Media & OOH, Madison World and Anupriya Acharya, Group CEO, ZenithOptimedia Group,India present their agencies forecast for 2016. Interestingly, all three industry experts projected similar growth, pegged in the range of 13.9% to 18.4%. The presentation was followed by a panel discussion, moderated by Ashok Venkatramani, CEO, ABP News. We get you excerpts from the panel discussion where the media heads comment on inflation, advice to advertisers to grow the ad pie and a wish list from TV and Print. Vikram Sakhuja A simple way of looking at inflation, for say TV, is supply and demand. There is a supply of ratings and a demand in terms of ad spends and the difference should tell you the inflation. With the inventory increase due to new channels, the supply is going to go up. What’s going to be interesting in 2016, in particular, because of the BARC transition is you won’t have a very good base year on CPRPs or CPTs. You will be actually using effective rates in a way to compute inflation and actually inflation might even come down because of inventory that has gone up. If you have effective rates, you might even have a situation of rates coming down. If you are going to have effective rates, I wouldn’t bet on too high an inflation number in 2016. Shashi Sinha Measurement has a way of bringing in transparency and rural is also being measured. With the new baseline coming, you will see a huge increase in numbers. On supply and demand, with new properties coming in, more advertisers will come in. CPM may go down as a denominator but in absolute terms of contribution of the 15% (growth), in my mind 9-10% will come from inflation and 5-6 % will come from volumes and inventory. In Print, the inflation will be less. With a lot of small and regional advertisers coming in, if we put a figure of 8%, of that 25% to 30% contribution will come from inflation. The rest will come from volumes from all the small local advertisers which keep getting added. Anupriya Acharya There will be inflation, it’s essentially across all media and is a function of demand and supply. We looked at macro-economic factors - high urban consumption demand, rural will be dependant on good monsoons and India being seen as an investment destination. We saw very high inflation last year when lot of money was pumped in suddenly, especially during the peak seasons. Inventory is increasing and that will check inflation but it is not growing at the same rate as the demand in the market and some inflation is bound to happen across India. We are seeing in Television an increase in inventory with new channel launches but the fact is that eventually it is limited beyond a certain point and the demand side is supposedly much higher. Vikram Sakhuja Marketers should invest in driving outcomes and not think in terms of output, reach, frequency, GRP and CPRP only. They should think in terms of growing awareness, consideration, getting leads, driving user experience, getting advocacy and loyalty. The ecosystem is right today for us to find matrix to the outline and offline world where we can look for linkages. Let’s take a leap of faith and let’s say this campaign is supposed to grow my consideration and is going to be measured by whatever ideas brands love - which is sharing, liking this, or it’s in the form of advocacy, let’s drive it to that. The first time something comes in, you cancel marketing budgets but if you start building the link towards outcomes, slowly it will be viewed as an investment. Anupriya Acharya If we compare globally, obviously cost of media in India is very cheap, but if you look at the cost of everything else, whether it is services, commodity, product, everything is cheap. The ability for the market to pay for that media is pretty much limited by their ability to charge in their own areas and the purchasing power parity is still low. Hence, it is a little unfair to say that the market is not pumping enough money. It is essentially a function of demand and supply and is all linked to the market’s ability to pay. Shashi Sinha Print has been adaptable in the last few years but they need to start catering to niches. There is an opportunity for targeted communication in Print. With rural opening up and data coming in, Television is an untapped potential. People say that there is no rural purchasing power but if you look from a five to 10 year horizon, the surface has not been scratched. Our content and programming is not driven towards that. Even today people say this is urban India and have extended programming to make it slightly more acceptable to rural India. But, a time will come when you will have to start looking at that market differently with different mindsets and expectations. Vikram Sakhuja To grow the ad pie for both Print and TV, give us a local market plan ability to go to UP, Maharashtra, Rajasthan, Gujarat and actually deliver a credible plan which can take India from one HSM plus four Southern states to 20 or 28, actual credible plans. If you do that, the market will explode and it will also be good for market. Anupriya Acharya TV and Print are doing very well and they are innovating regularly. In terms of increasing their stickiness, it’s always content, content and content and if you have content which is more sticky, is more cultural and more localized, definitely they will continue to grow. On marketers and how to increase ad spends, they have been pretty creative on that as well and they actually do customize it to individual categories.
Shashi Sinha
2016-17 will be a landmark year due to two initiatives. We are getting into digital measurement for Print with ABC and as the currency builds over five to six months, people will start finding ways to monetize it. In addition, BARC will get into cross TV measurement. Once the cross media comparison starts, that will unleash the monster. If this country has to grow, it will grow not on the basis of top 100 advertisers but the SMEs. China gained from the SME movement and if this SME move happens the way the overnment is planning, with startup India, there will be a boom.
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