Advertising growth slows in July-Dec: GroupM

External pressure faced by FMCG, telecom and banking & finance drag numbers down

The country's largest media agency network, GroupM, said in a report on Tuesday the pace of growth of advertising in the second half of the current calendar year had slowed to 4.7 per cent from the 7.3 per cent estimated a year ago.

This has pulled down the 2013 growth estimates to 8.5 per cent from 9.9 per cent a year ago, the agency said.

GroupM attributed the advertising slowdown to key categories such as fast moving consumer goods (FMCG), telecom and banking and finance.

“The financial markets are underperforming, while FMCG is seeing pressure from an increase in raw material prices and manufacturing processes. Handset manufacturers are heavily dependent on imports of smartphones and feature phones, slowing their pace of growth too,” the report said.

The revised estimates paint a dismal picture of the Rs 44,755-crore advertising industry, with print, making up 40 per cent of the market, growing 0.7 per cent, radio 2.5 per cent, out of home (OOH) 3.8 per cent and television (TV) 5.9 per cent in July-December.

Original estimates had pegged growth in the second half at 4.8 per cent for print, 5.7 per cent for radio and 7.6 per cent for TV.

Digital advertising, which forms seven per cent of the market, maintained its pace of growth at 30 per cent in both estimates. OOH was also pegged to grow at 3.8 per cent in both.

Categories expected to continue advertising in the second half include automobile, television and parties.

“In auto, there are many launches in the coming months, while the media would continue on new channel and programme launches,” the report added.