Advertising expenditure on TV grows 21% in first half of 2015
- Design principles for a Digital India
- Venture Catalysts buys 10% stake in Chai Break for Rs5 crore
- BofAML India’s Kaku Nakhate: Investors are dialling back into the India story
- ReNew Power may buy Ostro Energy in Rs10,000 crore deal
- Buenos Aires WTO Summit: EU seeks India cooperation on food security issue
New Delhi: Between January and June 2015, advertising expenditure on television increased by close to 21%, pushing media agency Madison and advertising magazine Pitch to revise upwards their advertising growth rate prediction for the year.
Against their original forecast of a growth of 9.6%, projected in February 2015, the study, titled Pitch-Madison Media Advertising Outlook, has now revised its forecast to 13.8% for the total advertising market. The upward revision is because of a steep increase of 20.6% in spends on television during the first six months of the year, said Madison World chairman Sam Balsara in a release on Wednesday. The original forecast for television was a growth of 10%.
According to the Pitch-Madison Media Advertising Outlook, the growth rate is likely to extend to the second half of the year too, resulting in a sharp 21% growth in the television advertising market. “Such a high growth rate is unprecedented and has not been achieved in the last five years,” a release said.
Significantly, Madison Media has not revised its forecast for print, radio, cinema, outdoor or digital. The projections for these media have remained stable, with print expected to grow at 5% and digital at 29%. However, the media agency expects some of these sectors to grow at a marginally faster clip than the originally projected growth rates.
As a result of the revised television projections, total advertising expenditure is expected to touch Rs.42,234 crore in 2015 against the predicted Rs.40,658 crore.
To be sure, expenditure on television for the January-June 2015 period has been driven up by several advertising categories such as e-commerce, automobiles, fast-moving consumer goods (FMCG), consumer durables, and banking, financial services and insurance.
FMCG has been largest contributor in absolute terms, contributing as much as Rs.4,200 crore and accounting for 51% of the total television spend. According to a Mint report of August 2015, consumer packaged goods companies spent more on advertising and promotion in the three months ended 30 June compared with a year ago, to grow sales in a sluggish market, and to prepare for a revival in demand that they see starting in September. The country’s largest packaged goods company, Hindustan Unilever Ltd (HUL), increased its advertising and promotion spending by 22% in the three months ended June. Britannia Industries Ltd increased it by 15.6%, Emami Ltd by 38.1%, Dabur India Ltd by 15.5% and Colgate-Palmolive (India) Ltd by 11.08%.
Raj Nayak, chief executive officer, Colors, the Hindi entertainment channel of Viacom18, said that while FMCG companies have increased their spends on TV, e-commerce companies including payment gateways such as Oxigen and Paytm are also advertising heavily.
The Pitch-Madison report said e-commerce companies grew their expenditure by 70% in January-June 2015. A 22 July report in Mint said broadcasters gained heavily thanks to increasing spends by e-commerce firms. Estimates from television channels, e-commerce advertisers and media buyers suggested that they spent Rs.450 crore on television in the three months ended 30 June.
According to revised estimates by Madison, the total volume of free commercial time across all television genres increased by 14%. That is not all. New channel launches in the Hindi entertainment genre (Sony Max 2, Epic, &TV, Sony Pal, Zindagi) also led to a spike in growth in television advertising.
“For us, product and performance worked in the first half of the year,” said M.K. Anand, chief executive officer and managing director at the Times Network that operates channels such as Times NOW, ET NOW, Movies NOW, MN+ and Romedy NOW.
“Our news channels have held on to the growth rates they achieved during 2014, which was an election year, while our entertainment portfolio advertising has expanded by much more than 21%,” he said. “August was very vibrant. Going forward, we expect to see our channels do 30% better than before,” he said, adding that television media had done pretty well this year.
High-profile sports events such as the ICC Cricket World Cup and the Indian Premier League as well as the Delhi state elections contributed to the overall growth in the first half of 2015.
Balsara said: “…achhe din… have certainly arrived for the Indian television Industry. A 21% growth coming on the back of a 14% growth in 2014…is quite unprecedented and shows the optimistic outlook of industry in Indian markets and the aggressive stance they are willing to take to protect and grow their market share. The growth is also significant in the light of growing conversations around digital.”