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GroupM estimates 11.6% growth in ad spends this year

Tuesday, 11 February 2014 - 6:00am IST | Place: Mumbai | Agency: DNA
Digital spends likely to grow 35%

At the launch of GroupM's TYNY Report 2014 report, its chief executive officer C V L Srinivas stressed on the media agency's renewed focus on digital and the need for a change in approach and mindset in order to be relevant with the changing business scenario.

Srinivas said it in the context of GroupM's advertising expenditure 2014 report which sees digital as the fastest growing medium with a 35% growth rate, followed by TV with 12% growth rate. TV's growth would reduce from 13.6% in 2013 to 12% in 2014.

The report estimates that print will grow at 8.5% in 2014 as against the 2013 estimate of 4.6%, thanks to the growth in vernacular print publications across the country. The report said while newspapers would grow by 8.5%, magazines will witness a negative growth of 5%. Outdoor will grow at 9%, films 12% and retail 8%, it said.

Among sectors, FMCG would constitute a majority share (29%) in ad spend followed by consumer durables (22%) and retail (12%).

On the growth prospects for the industry in 2014, Srinivas said, "It's going to be an okay year for the media industry. I'm saying this because the 11.6% growth estimate also accounts for the 2.5% growth that will come from advertisements from political parties as the elections are around the corner. If you take elections out, which is a one-off event, the growth in 2014 is about 9%."

He said that the growth of the industry will also depend on how things are panned out on the measurement front, on IPL's success or failure and the outcome of the elections, which will have an impact on government policies.

In his final remarks, Srinivas said 2014 will be remembered for the fact that digital media that will see a lot of action and also the fact that the industry is poised to touch the Rs 40,000 crore mark from the current size of Rs 38,000 crore.

By arrangement with MxMIndia.com

Sector- wise growth

With general elections on the anvil, government spending and political party election spending adding significantly to ad expenditure of all media. It is estimated that the government spending will lead a 2.5% growth in the industry.

FMCG will continue to be an important sector for the industry as it accounts for 29% share in total ad spends this year as volume growth has returned due to good monsoon and raw material prices are benign.

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

The retail industry will experience growth from the entry of new players into the food and beverage segment, growth in e-commerce, and regional retailers expanding their reach across markets in India.

Despite slowdown in four-wheeler segment, there is growth for entry-level cars, sports and multi utility vehicles. Two-wheelers to continue the focus on small town and rural India.

Competition is likely to intensify on the back of recent market developments leading to more launches by existing players, which subsequently mean higher ad spends.

Smartphones penetration is on the rise, however, stiff competition in the segment will continue. Phablets and connected devices will gain popularity in 2014.

Cellular phone service providers will witness growth in revenue. Service providers will bring down the price points for 3G, therefore completion is more likely to intensity.

Banking, financial services & insurance (BFSI)
For BFSI sector, 2014 will see a revival happening with a likely reduction of interest rates. IPOs would pick up pre-election owing to better market sentiments.

Recent RBI policies will result into a more favourable business environment and new bank licences will push advertising expenditures of the category.

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