The year 2009 will go down in the annals of Indian media and advertising industry as the one that has set the 'New Normal'. To quote McKin-sey's worldwide managing director, Ian Davis, who propagated this term first in March 2009, "Now, the business landscape has changed fundamentally; tomorrow's environment will be different, but no less rich in possibilities for those who are prepared." Indeed, the year gone by has reset the entire Indian media industry, as our 7th edition of Pitch-Madison Media Advertising Outlook 2010 notes. This even as the Indian economy showed its resilient character (growing much faster than the world). Thankfully, our study is bullish on 2010, which may end up in just about wiping out our losses of 2009.

According to the 7th edition of Pitch-Madison Media Advertising Outlook 2010, Indian media and advertising industry clocked a total size of Rs 18,670 crore. Compared with 2008, where the industry size was pegged at Rs 20,717, this is a dramatic drop of full 10 percentage points. The fall is even more dramatic when we consider the fact that industry grew by an average rate of 15-18 per cent over the five year period - 2004 to 2008. None could have anticipated this sharp a fall.

The first nine months of the calendar year (January to September 2009), had the industry sweating. Buoyed by the festive spirits, the ad industry recovered only towards the end of the year. Most large media houses have reported that revenues picked up in the months of October-December 2009.

Let's start with a look at some specific trends of 2009. You'll find a much more detailed analysis in pages ahead.

Country cousins beat metro markets

The biggest media trend of 2009 was perhaps the resilience, and even growth, of the great Indian regional media market. The trend was visible in both print & TV media that together count for 87 per cent of ad mart.

Given that metro consumers were more 'leveraged', and more attuned to credit driven purchases, it's the purchasing power and sentiments in big metros that got hit the most, as the stock market came down crashing, and jobs came under pressure. In contrast, smaller cities, towns and semi-urban markets, which always lived within their means, continued their spending. This meant sectors like auto, telecom, education, FMCG, wooed these audiences hard. Regional press and TV gained from the market reality. Metro markets, and metro-centric media, suffered from the negative showing of some of the core product categories like real estate, banking, travel and tourism and appointment advertising. Uday Shankar, CEO, Star Network, puts it well when he says, "The two-three year trend of brands penetrating deeper into the rural markets strengthened further in 2009. National and regional television, which is often the only means to reach these consumers, is beginning to reap rich dividends."

Print's Plight

Print media was the worst hit in 2009. The medium lost, hold your breath, a massive Rs 2,000 crore of ad revenues! This meant that print media in 2009 de-grew by a massive 21 per cent, when compared with 2008. Fighting to retain their market share, all leading print titles dropped their ad-rates, opened up to 'innovation' like never before. Some smart players increased their cover prices, and the focus was solely on managing bottom lines with cost cuts and improving efficiencies. The sector saw a slew of cost reduction measures like reduction in no of pages, salary freeze/cuts, launches getting deferred and so on.

Concurs N Murali, Managing Director, The Hindu, "Print media has been forced to succumb to the pressures of a buyer's market leading to rampant discounting across the board and consequent reduction in the net realisation." Regional players fared better than the metro English focussed newspapers. Most leading language players managed to avoid ad-losses, and some even registered a modest gain of four-five per cent.

Automobile, public sector banks, government and quasi-government advertising, and education were the largest contributors to the ad revenue pie. Given the strong local connect; the marketer saw the language media as the preferred means to reach pockets of semi-urban and rural growth.

1 2