GroupM report 2017: Advertising revenue to grow 10 per cent, to reach Rs 61,204 cr.

The fourth edition of GroupM's annual 'This Year Next Year' (TYNY) report predicts advertising to grow by 10 per cent to reach Rs 61,204 crores this year. According to the report, ad spends for 2016 were Rs 55,671 crores (12 per cent growth from 2015), compared to predicted spends of Rs 57,486 crore at the start of last year.

 

The deficit ad spend was due to lower than expected ad spends from sectors like FMCG, traditional retail, telecom and sporadic spending in categories like e-commerce. Demonetisation in the last quarter had a further negative impact of around 2 per cent on the total advertising expenditure in 2016.

 

According to the report, television will continue to be the largest medium contributing Rs 27,738 crores, giving it a with a 45 per cent share. Growth for TV is expected to be 8 per cent this year which is attributed to '‘Free To Air’ channels adding more inventory, and 'pure HD' content gaining ground. The report also expects a consolidation of niche channels.

 

Press will see a growth of 4.5 per cent this year and will continue to be the second highest contributor in terms of share of spends. The medium grew at 4 per cent last year according to the the report. It expects growth to come from increase in ad spends from print heavy sectors like auto, BFSI and e-wallets. Vernacular and regional newspapers will see a higher growth rate. The total contribution of print is estimated at Rs 18,258 crore. 

 

India is the only market among Russia, China, UK, USA, Brazil and Germany in which press continues to grow.  

 

Digital (not accounting for SME spends) will grow by 30 per cent in the year to reach Rs 9,490 crores. The digital Adex is estimated to take a total of 15.5 per cent share of the total Adex this year.

 

GroupM expects OOH to grow at 7 per cent this year to reach Rs 2,942 crore. Radio will grow at 10 per cent to reach Rs 2,464 crore, while Cinema's growth rate is expected to be 20 per cent to amass Rs 672 crores this year.

 

CVL Srinivas, CEO, GroupM, South Asia, said, “Despite a volatile 2016, we are estimating advertising expenditure growth at 10 per cent in 2017. The first quarter will give a slow start to the year, with the market picking up from March-April, fueled by a stable recovery process post demonetisation. Sectors that are contributing to this positive trajectory include auto, media and e-Wallets. In addition, Government and Political parties will increase spending with elections in several states this year. Digital is leading the Adex growth with a 30 per cent growth, while TV continues to be the largest medium in the mix. Print continues to grow at a stable rate of 4.5 per cent and is still the second largest medium in the Adex.”

 

FMCG will continue to lead the sector wise contribution (27 per cent) this year as well according to the report. Auto and e-commerce follow with 8 per cent. 'Other' sectors will contribute 23 per cent.