Ad industry to grow at 14% in 2010: KPMG

Report says online promotion segment will see biggest surge

The Rs 23,840-crore advertising industry, which saw flat growth in calendar year 2009, is set to grow at a compounded annual growth rate (CAGR) of 14 per cent in 2010, according to a report by consultancy KPMG.

While regional advertising showed resilience even during 2009, it is set to grow stronger, as advertisers reach out to rural areas and Tier-II cities.

The growth in regional advertising is partly driven by new sectors such as education, hospitality, real estate and jewellery, which often have local brands and therefore prefer to advertise through local channels, according to KPMG.

Rajesh Jain, executive director and head (M&E practice), KPMG, told Business Standard: “Today, Tier-II and Tier-III towns are emerging as important growth centres and most major brands are increasing their focus to cater to them. Regional TV channels have recorded a growth rate of roughly 25 per cent. This should drive media planners to raise the ratio of ad volumes placed in the local media.” The print media, noted Jain, registered sluggish growth in 2009 on advertising revenues. This was because the economic slowdown and the consequent reduction in budgets of key advertisers such as retail and real estate companies.

The Rs 11,480-crore print advertising industry is expected to have flat growth this year, too, says Jain.

KPMG believes online advertising will grow about 30 per cent per annum, establishing itself as the fastest growing advertising medium.

“If advertisement revenues on TV, radio and print have seen de-growth (fall) in the last 12-14 months, advertisers have flocked to the internet,” said Jain. Though TV and print advertising comprise 85 per cent of all advertising revenue, KPMG said the Rs 840-crore internet advertising industry would attract the most aggressive marketing from both multinational companies and local brands.