GroupM estimates 11.6% increase in AdEx in India in 2014

Digital media shows the maximum growth with 35 per cent. This is followed by 12 per cent in TV, a drop from 13.6 per cent in 2013

BestMediaInfo Bureau | Mumbai | February 10, 2014

(L- R): CVL Srinivas, Deepak Jayaram, Vinod Thadani, Dalveer Singh, Suku Murti, Tushar Vyas, Kartik Sharma, Sunder Muthuraman, Ravi Rao and Prasanth Kumar

GroupM today released their annual estimated advertising expenditure report titled 'This Year, Next Year (TYNY) 2014'. Along with advertising expenditure (AdEx) numbers, GroupM India also released the mTrends, the list of the biggest media and communication trends in the country.

As per GroupM's in-depth research of the Indian media industry, the projected AdEx growth estimate is 11.6 per cent. Digital media shows the maximum growth with 35 per cent. This is followed by 12 per cent in TV, a drop from 13.6 per cent in 2013. Cinema remains constant at 12 per cent for this year as well. The print medium shows a significant increase by 8.5 per cent against the 2013 estimate of 4.6 per cent, owing to growth in vernacular print publications across the country.

CVL Srinivas, CEO, GroupM South Asia, said, “We are cautiously optimistic about the media industry in 2014. Sectors like FMCG, Auto and Retail will continue a stable increase in ad spends. We will see an increase in rural spending by FMCG and Telecom.”

Srinivas added, “The first half of the year will continue to be uncertain given the general economic and political environment, and ambiguity surrounding the measurement system. However, advertising by political parties is expected to give a boost to the AdEx by up to +2.5 per cent. We envisage a stronger second half with an upsurge in ad spends.”

The TYNY report is the most comprehensive understanding of the estimated media spends by advertisers in the current year. It also highlights some of the industry sectors that will have a major effect on advertising spends across media. This year GroupM also launched mTrends, a quick reference book of the hottest media and communications opportunities in 2014. This list of 20 trends is a derivative of the TYNY 2014 report and has been put together by the team at GroupM India, including the agencies and specialist units.

­­­­­­­­­­­­­­­Overview for key advertising sectors

Elections: With general elections and five state elections on the anvil, government spending and political party election spending adding significantly to the ADEX of all media.

FMCG:

-          Volume growth back for FMCG companies on the back of good monsoon and hence good rural income

-          Raw material prices benign and hence more flexibility with advertisers

-          Ad spends of most FMCG companies on the rise to ride on the back of higher disposable income due to election spending

Retail:

-          Category growth story continues

-          More players getting into the food & beverage segment

-          E-commerce making inroads into small town India

-          Regional players expanding getting into national arena

Auto:

-          Despite slowdown in the 4wheeler segment, bullish on entry level cars, sports utility vehicles and multi utility vehicles.

-          Two-wheelers to continue the focus on small town and rural India. Competiitve intensity on the back of recent market developments leading to more launches by existing players and subsequently higher ad spends

Telecom:

-          Smartphones penetration rising. Stiff competition in the segment to continue

-          Phablets & connected devices gaining popularity

-          Cellular phone service providers witnessing growth in revenue and ARPU. With service providers slashing prices for 3G schemes competitive activity expected to pick up in this segment

Banking, Financial Services & Insurance:

-          Revival expected in the segment on the back of likely rate reduction.

-          IPO market to pick up pre-election owing to better market sentiments

-          Recent RBI policies leading to a more favourable business environment

-          New bank licenses likely to push ADEX of the category

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