Cash Crunch Blip Over, Advertising Spends Set to Soar
Media agencies project double-digit growth on the back of increased consumer spending; television to outpace print and outdoor formats
Mumbai: The Indian media industry is bullish about a handsome advertising growth in 2017, as it comes out of a temporary setback on account of demonetisation.
According to Deloitte, India is one of the few large markets where all traditional media will witness growth.
The global audit and consulting major has stated in its Technology, Media & Telecommunications (TMT) Predictions report for 2017 that television advertising in India is expected to grow at 11%, print advertising at 7.6%, and other media (outdoor, radio and cinema) between 7% and 12%.
Ashesh Jani, partner at DeloitteIndia, said macro-economic factors, GST and other reforms would fuel the ad growth. “In terms of CAGR, TV advertising might overtake the print growth this year,” he said.
One of the key factors for the growth of television advertising is mass appeal of television in the country.
Of 225 million homes, over 183 million have TV sets and the medium remains the most cost effective to
reach maximum number of people. Moreover, increase in TV penetration will lead to greater ad spends. Even media agency honchos say consumers are spending again and the advertising is going to pick up — resulting in a double-digit growth in the advertising expenditure for the industry.
“The first couple of months may remain tight, but I am confident that economy will pick up, and in my estimate TV advertising will grow between 11% and 12% in 2017,” said Shashi Sinha, CEO at IPG Mediabrands India.
Broadcasters had witnessed a sharp drop in advertising across TV channels in the months of November and December, in the aftermath of Prime Minister Narendra Modi’s announcement of demonetisation of highdenomination currency notes of ₹ 500 and ₹ 1,000 with immediate effect from November 9, 2016. FMCGs, auto, retail and many other “high-spending” sectors observed a sudden fall in demand as demonetisation sucked out the currency, resulting in reduced ad spends.
Sinha, however, emphasised that this was a temporary episode. “There is no structural reason for these sectors to reduce ad spends. It (demonetisation) was a temporary one, which will not last long,” Sinha added. IPG Mediabrands is expected to come out with its own predictions for advertising expenditure later this month.
Publicis Groupe-owned Zenith had earlier predicted 11.2% increase in the overall advertising spends in India. According to Zenith’s report, which was released in December last year, advertising expenditure was expected to reach ₹ 54,344 crore by end of 2017. While media agency experts are agreeing on early signs of recovery and a double-digit growth, ET was first to report the increase in advertising volumes on TV in the month of January. Meanwhile, global media agency giant GroupM and Indian media agency network Madison are also going to release their ad expenditure forecast reports for 2017 in the next week.