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| Pitch Madison Media Advertising Outlook >> 2009 >> January Review 2008 >> Introduction | ||
| THE GREAT MEDIA SLOWDOWN IS HERE | ||
| By Amit Agnihotri | ||
| After five uninterrupted years of scorching growth, the great Indian media juggernaut has finally slowed down. And the slowdown is pretty dramatic! While 2008 recorded a healthy 17 percent growth rate, its the prospects of 2009 that are sending the chill down the spines of the media honchos, who're taken up so much by the raucous growth of the recent past. Riding on the giddy GDP growth rates of over nine percent in past few years, the media and advertising industry grew by close to 20 percent for 2005, 2006 and 2007. But it all came to an abrupt end in 2008-to be precise, in the last quarter of the year. As the reality of the global meltdown touched the domestic shores, and our economy began to slowdown-from nine percent to about seven percent, the advertising expenditure slowed down too. Added to this were the woes like the worst terror strikes in Mumbai and the spiralling inflation rates, and the Great India Growth Story remained no longer as rosy. According to the Pitch-Madison Media Advertising Outlook 2009, our sixth annual study, the advertising and media industry grew by 17 percent. However, this is lower than the 22-percentage points growth at Rs 21,314 crore that we had projected in our fifth Survey in the beginning of 2008. By contrast, our estimates record that the advertising and media spends grew by 22 percent in both 2006 and 2007. The AdEx for 2008 is pegged at Rs 20,717 crore, breaching the Rs 20,000-crore-mark for the first time. Last year, the industry size was pegged at Rs 17,690 crore.
While during the first nine months, the media spends were on track, the last quarter has shown strong stagnancies and even declines in media spending across media platforms. Primarily, the slowdown in advertising spends over the past couple of months has contributed to this lower- than-the-projected growth rate. The Survey notes that since November, advertising spends have taken a beating across different sectors. While consumer goods players still continued to show stable media spending, we note that several big-spenders such as automobiles, retail, durables, real estate, travel & tourism, banking, insurance and mutual funds have shown significant declines or stagnancies during the last quarter of the year. This has had negative impact across the media platforms we track-print, television, outdoor, radio, the Internet, and cinema. Of course, the impact of the slowdown hasn't been uniform-some sectors like cinema and outdoor have been hit the hardest, while others like the digital media, and to some extent, even television have remained less impacted. While the digital media clocked a growth rate (45 percent) that we projected, television managed to grow at 17 percent. The print media grossed ad revenues of Rs 9,825 crore in the reporting year. It grew by 16 percent in 2008 and continued to hold its place as the biggest player in the media mix with a share of 47.4 percent. On the print media, the big spenders include education, real estate, automobiles, banking and financial institutions. Other than education, other sectors have also shown significant slack post-festive season. Also among the banking and financial institutions, while insurance spends remain buoyant, other sub-sectors such as banking, mutual funds, loan advertisements etc, and corporate advertising have shown major declines during the last two months of the reporting year. Second to print is television which fell short of last year's projections of 22 percent growth to reach 17 percent but maintaining its total share at 40.2 percent at Rs 8,319 crore. The reasons for television to have clocked a somewhat better percentage growth is that the FMCG sector, which contributes close to 50 percent of television spends, remained unaffected by the slowdown. Outdoor, the third biggest medium in terms of size, was badly hit. It posted a growth percentage of just 11 percent to reach Rs 1,419 crore. We projected this medium to grow 14 percent. The cinema medium also took a big hit in 2008, in fact the hardest hit among other media platforms, due to a very poor showing by Bollywood, coupled with the economic slowdown and the recurring terror attacks.
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