In December 2008 and January 2009, when teams from Madison Media and Pitch Magazine began working on the sixth edition of the annual industry benchmarking study-- Advertising Outlook 2009-we're faced with an unprecedented scenario. For the past five years and until the Q3 of 2008, the advertising and media industry was growing at a furious pace, averaging around 17-18 percent YoY. However, the last quarter of 2008 saw this growth tumbling down when the ripple effects of the unprecedented developments that have engulfed the global economy began to be increasingly felt on the domestic economy. No country was de-coupled, we've learnt painfully. Amidst all these gloom and bad news that kept flowing in day in and day out, a drastic slide of the domestic advertising and media industry was only expected, primarily due to the high co-relation the advertising industry has with the macroeconomic fundamentals and higher GDP growth.

So, in January 2009, we had forecast a flat growth (only 2 percent growth in 2009, vis-à-vis 2008) for the advertising and media industry. When compared with the growth rates of the past several years, this projection was shocking, to say the least. For instance, in 2004 the industry grew by 11 percent, by 15 percent in 2005, and a full 22 percent in 2006 and 2007. Last year, it grew by a smart 17 percent. So, 2 percent growth for 09 was indeed a dismal number.

Six months down the line, our forecast proved right. The industry indeed faced its worst months in many years!

FIRST, THE BAD NEWS

Given the volatility in the economic environment, in July we decided to revisit our January estimates. As we reviewed the data and trends for the first six months, we've found that instead of our projected 2 percent growth, the industry, in fact, has done much worse.

The January-June period was the worst time for the advertising and media industry in as many years. Let's look at the topline numbers.

In H1 of 2009, the overall ad revenue garnered by the media industry put together was just Rs 7,452 crore. As per our projections, we expected the industry to mop up Rs 8,866 crore during this period. So, in the first six months, the industry fell short by a whopping Rs 1,414 crore. And that's a big drop!

As the details in the following pages will tell you, print media fared the worst. In H1, the print industry garnered only Rs 3,207 crore in ad revenues, against our projection of Rs 4,009 crore. Telev- ision was better off with a lesser shortfall. Cinema and outdoor were hit heavily, while there was a moderate impact on radio and the Internet.

NOW, THE GOOD NEWS

So, how do we look at the next six months? Of course, there are some positive signs on the horizon with the economy showing clear signs of pulling out of the mess. Even the global gloom is clearing out faster than expected. While all leading corporates have reported better-than-expected profits in April-June quarter, the latest IIP data throw up the biggest surprise clipping at a stupendous 7.8 percent in June. All these lead us to believe that the next six months are going to be much better than H1. However, the threat of a country-wide drought throws some up some concerns. But for the media and advertising industry, the worst seems to be over.