If 2010 was a sunshine year for the media advertising industry, 2011 reminded the industry of 2009. ‘Slowdown’, while was a dirty word and no one wants to accept it, the fashionable word has been ‘Caution’. As we put the Pitch Madison Media Advertising Outlook 2012 together, and spoke to media marketers, brand managers and media decision makers at Madison, the refrain we got was: The year started on a positive note, yet as global economy saw another churn, inflation rose above 10, the Rupee weakened against the dollar, advertisers went into a shell, and held back their purses. They’d been badly affected in 2009, hence, only necessary advertising was done.
The mood cannot be termed pessimistic. It was more of ‘protectionist approach’ that toppled all our forecasts of a 17 per cent growth. In 2011, there was growth still, but at a mere eight per cent. In 2009, we’d a growth in the negative in fact (-10 per cent).
Total ad pie is pegged at Rs 25,594 crore. The big surprises were the flat growth of radio, washout of outdoor, the rebirth of cinema and the stupendous rise of internet.
But let’s start with the biggest media platform – television. In 2011, TV advertising was at an all time high – Rs 11,478 crore. However, while we expected it to grow at a rate of 20 per cent, it managed only nine per cent. Print, where the ad revenue size is pegged at Rs 10,791 crore, was expected to grow at 13 per cent, but it grew at just eight per cent. We’d expected print to lose its share in the pie to go down to 40.8 per cent. But TV not performing as per expectations, and print losing little ground on growth rate, it managed to hold on to its share.
Of course the reasons for decline in growth rates are different for TV and Press… In Press, it was primarily the slowdown in English press advertising that lead to the fall in growth numbers, the reasons are far more complex in TV. For one, the ad revenue potential in many genres like news, sports, music, seem to have saturated, with sagging viewer interest.
In print, there were no big IPOs, no big launches, the focus was on regional consolidation. Advertisers while saw a growth of 13 per cent in space consumed in English dailies in Q1 of 2011 as compared to the corresponding period in 2010, in Q4 the growth went into the negative to -13. In comparison, language dailies still saw a 5 per cent growth in space consumed by advertisements.
Different product and services’ sectors have shown markedly different behaviour. For instance, the FMCG sector, which is the backbone of TV advertising, was cautious in the second half. Big spending categories like education, BFSI and real estate and a few others reduced their print spends.
However, the surprise was the way, the automobile sector spent its money. The industry in its own saw sales tumbling, yet, it kept the buzz going across mediums and take its share in the ad spends pie up. In print, its share went up from 7.1 per cent to 9.8 per cent, to emerge as the second largest spender in print. On TV too, its share went up from 6.7 per cent to 7.6 per cent.
And above all this, it’s internet that’s emerged as the cool place to be at. While, we had projected a growth of 35 per cent for display advertising, the growth was an overwhelming 45 per cent, taking its revenue up to Rs 985 crore. And if we include Search, the total goes up to Rs 1,535 crore, and that could upset shares of all other mediums. To be fair to print, where we haven’t included classifieds and tenders, and there is no metrics to measure that, we have not included internet search in the pie.
How does the future look? A lot depends on which way the economy takes a turn and how the government responds to these changes. According to Pitch Madison Media Advertising Outlook report, the projections for 2012 are too not bullish. The industry size is expected to grow to Rs 28,013 crore, with a growth rate of just nine per cent.
• All pointers indicate that in the first half of 2012, advertisers will be cautious with their spends, and there seems to be a lot more optimism for revival in the second half.
• The one common thread that seems to emerge from all feedback is that while 2012 will see a growth in ad spends, the growth per se will be lower than 2011 at the overall level.
• Television is expected to maintain a comparable, if not marginally higher growth rate, I.e a 10 per cent growth.
• In print, the current cautious sentiment in core print categories in BFSI/education etc is expected to continue until there are policy changes at the macro level to drive an invest
sentiment amongst these categories. Print is expected to grow at six per cent lower than 2011.
• Internet will emerge as the third largest medium and will be the big story of 2012.