Media Advertising Forecast – Newspapers will be the worst hit

2008 was the year when everything went up – and the 09 recession is affecting all sectors and advertising industry  is definitely not left behind – as per Groupm forecast, the Indian advertising industry will grow by only 4.7% this year (compared to 14.7% for the last year)

Media split:

Newspaper:

• Of the top 10 newspapers in India, six grew less than 10% in 2008. Of the top 20 only two grew more
  than 15%
• The only newspaper showing really substantial growth in 2008 was the Mumbai edition of DNA with 49%
• Most publications have struggled to hold on to their revenues in Q4 08

Forecast:

• Expected fall of 2%
• Advertising expenditure could become more localized and the use of multiple-title packages thus reduce
• Newspapers are facing heat from OOH as well as Radio.

Television:

• Television advertising witnessed growth of 18% in 2008.
• Share of regional channels increased from 21% to 27%

Forecast:

• Advertising spends on television are expected to grow by 7% in 2009.

Radio

• 49% increase as compared to 2008
• All India Radio (AIR) was the single largest contributor with revenue of Rs.290 cr.
• Four cities Mumbai, Delhi, Kolkata and Bangalore, which are covered by the Radio Audience Measurement system (RAM), accounted for 55% of FM AdEx and Chennai, Hyderabad and Ahmedabad contributed to another 20%.

Forecast:

• Revenue growth of about 15%

OOH

• Out-of-home (OOH) market grew by only 4% in 2008 and closed at Rs.1,448 cr.,
• Maharashtra contributes about 29% of the total OOH AdEx, with Mumbai alone accounting for about 85% of
  all investment.
• Mutual Funds are the key contributor to OOH industry.

Forecast:

• AdEx on OOH media is expected to grow by 4% in 2009 to Rs.1,500 cr.
• Telecom Service Providers will continue to be the biggest contributors to the medium.

Digital Advertising

• Witnessed a growth of 74% as compared to 2008 – to reach an estimated 850 crores revenue.
• Growth mainly driven by increased user base/broadband penetration.

Forecast:

• Expected growth – 25%
• Growth will be driven by Search Engine Marketing, Mobile Advertising and Content. Display advertising will continue to be a large contributor to the AdEx, but will not grow much in 2009.

Summary of the forecast:

• FMCG, Telecom, Education and Entertainment, four of the largest categories which together contributed to 50% of the total market in 2008, are less impacted by the recession in 2009 and will see a 12% growth in Ad spending.
• The worst  hit categories by recession are Financial Services, Retail, Real Estate , Auto and Infotech which account for 27% of the market and will see a 11% decrease in Ad spending.
• Newspapers (print) advertising will see a negative growth of 2 % (Rs 98.32 billion), as compared to 12 % last year (Rs 100.33 billion).
• Television industry will grow at a much slower rate of 7% (Rs 89.88 billion) as against 18% in the last two years.
• Radio will witness a growth of 15 per cent (as against 49 per cent)
• Digital media will grow at 25% (unlike previous year’s 74 per cent) to reach an estimated 850 crores revenue.

Download the report (PDF)