GroupM projects gloomy media outlook

ADVERTISING: The average growth rate across media to drop by 50 per cent in 2009.

Advertising in mediums like magazines and cinema will see a steep decline this year while spends on the outdoor are unlikely to grow. Television and newspapers will see only a marginal growth in ad spends.

The forecast has been made by GroupM, the media arm of the world’s leading communications agency WPP, in its study titled “This Year, Next Year”. The report predicts that the growth story of the Indian media will go back to the 2001 level when the industry grew 9 per cent.
 

IN THE SLOW LANE
Medium	2008	2009f*
Television	8,400	9,353
Newspaper	10,033	10,770
Radio	880	1,056
Magazine	803	722
Internet	630	850
Outdoor	1,690	1,690
Cinema	80	72
*forecast for 2009 (Figures in Rs crore) Source: ‘This year, Next year’ report on India by GroupM

In its recent outlook on India the GroupM study says that the overall size of Indian advertising industry is set to touch Rs 24,900 crore in 2009 compared to Rs 22,864 crore in 2008, thereby registering a growth of 8.9 per cent which is half the growth rate of 16 per cent in 2008 (over 2007).

In 2000-01 period when the size of Indian advertising industry was about Rs 7,000 crore, the year-on-year growth stood at about 9 per cent, similar to the projected growth rate for 2009. Thereafter, the advertising industry has grown in high double digits and the maximum growth was in 2007 when the industry grew 21-22 per cent.

The WPP and its group advertising agencies are represented in India by JWT, O&M, Rediffusion DY&R and others and are estimated to hold a lion’s share in the Indian advertising business.According to GroupM’s report ‘This Year, Next Year’, the two media — magazines and cinema — are likely to witness a 10 per cent drop in advertising over last year while growth in mediums like radio and internet will go down by 50 per cent. Zero growth has been projected in the outdoor media in 2009.

However, magazines, cinema, radio, internet and the outdoor contribute only about 20 per cent to the overall size of the advertising industry. Newspapers and television constitute nearly 80 per cent to the advertising business. According to GroupM projections, the television advertising business will grow from Rs 8,400 crore in 2008 to Rs 9, 350 crore this year while newspapers will contribute Rs 10,770 crore, up from Rs 10,033 crore in 2008.

Both radio and the internet mediums will grow in 2009. While the size of radio-led advertising will cross the Rs 1,000 crore mark, up from about Rs 880 crore in 2008, the internet medium will grow from Rs 630 crore to about Rs 850 crore in 2009, says the report.