Diwali set to be bright on Ad Street

The impact of the goods and service tax (GST) and demonetisation is waning on the advertising and media industry, a report by Motilal Oswal shows.

“GST-led impact appears to be subsiding. More encouragingly, ad growth is showing signs of a strong recovery with the onset of the festive season from mid-August. The improvement is seen across the TV, Print and Radio segments,” said analysts Aliasgar Shakir and Hafeez Patel.

Broadcasters are chasing free-to-air (FTA) ad market with better content, but not at the cost of cannibalisation of their own Pay-TV subscriber revenues, they said, adding, this will gradually lower the risk posed by DD Free Dish over the next 1-2 years.

Nearly 40% of digitisation, particularly in phase IV and III, is still not complete, the report said.

Advertisers are putting more money on TV as they are looking at long-term ratings instead of the short-term. Even though pricing is determined on CPRP (cost per rating point), the advertisers on general entertainment channel (GEC) typically look at a wider trend of rating versus just 1-2 weeks to attain a sustainable viewership share.

In addition, there is a renewed interest in the radio medium. “Advertisers appear impressed with radio’s wider reach with Phase III. Subsequently, radio should grow at a higher pace versus TV and print over the next 3-5 years,” said the analysts.

Radio also attracts local ad campaigns as they reach people of a particular area and have a higher impact.

The report said that in print media,  English has been more susceptible to risks posed by rising digital viewership when compared to vernacular.

When it comes to the digital medium, although the longer-term digital viewership prospects appear promising, the near-term trends lack visibility, it said.