Advertising growth to touch double digits this year

The resurgence in economic activity in India has also sparked a greater need for advertising. In fact, the Rs 20,000-crore Indian advertising industry is likely to grow at a rate of 10-12 per cent this year, according to industry experts. This is in sharp contrast to last year, when growth was in single digits only on account of the general pall of gloom that prevailed then.

“Advertising has improved significantly this year in comparison to last year. There is a bit of caution in the air. But, by the end of this year, growth is expected to be in double digits,” says Ogilvy & Mather Group President (North and East) Sanjay Thapar.

Signs of this upsurge are already visible. The 2010 edition of the Indian Premier League (IPL), for instance, saw a 25 per cent increase in overall advertising revenues. It stood at Rs 1,000 crore this year in comparison to Rs 750 crore last year, say industry sources.

Even a sporting property such as the FIFA World Cup, which has traditionally not attracted very high advertising revenues in India, is likely to rake in Rs 150-200 crore for broadcaster ESPN-STAR, the channel showing the matches. Four years ago, the then FIFA World Cup attracted revenues of under Rs 100 crore, according to sources.

“This does indicate that spend levels have gone up this year,” says Havas Media CEO (South Asia) Anita Nayyar. This is corroborated by Aidem Ventures Managing Director and ex-CEO of NDTV, Raj Nayak. “Advertisers are loosening their purse strings. It is not in fistfuls, but it is better than last year,” he points out.

The categories that lead to the charge in terms of advertising are such traditional heavy spenders as fast moving consumer goods (FMCG), consumer durables, telecom and automotive companies, according to Nayyar. “Even those that cut back on advertising last year – like banking & finance, real estate and media & entertainment – are bouncing back, “ she says.

In fact, advertising by companies in real estate is likely to grow this year on account of the initial public offers (IPOs) lined up in the coming months, say experts. Over a dozen real estate IPOs are expected this year, including big ones from such companies as Lodha, Sahara and Emaar MGF. “This will only add to the overall universe of advertising,” says Group M CEO (South Asia) Vikram Sakhuja.
 

SURGE IN SPIEL
TV and print	$ 000s (Q1 2009)	$ 000s (Q1 2010)	% Chg
China	17,769,420	20,866,346	17
Indonesia	1,514,553	1,904,854	26
Hong Kong	1,487,726	1,856,918	25
India	1,255,012	1,662,416	32
Australia	1,304,387	1,363,222	5
South Korea	887,415	1,007,449	14
Philippines	658,760	814,811	24
Thailand	502,962	556,582	11
Malaysia	339,732	418,625	23
New Zealand	270,468	293,035	8
Singapore	244,061	277,682	14
Taiwan	119,965	143,938	20
Total	26,354,462	31,165,878	18
Source: Nielsen

According to a recent Nielsen Company survey for the June quarter this year, TV and print media spends in India increased 46 per cent and 32 per cent, respectively. This was the highest growth registered across 12 Asia-Pacific markets, the survey said.

“The outlook for media advertising across the remainder of 2010 appears extremely positive in India. Consumers are out there spending and intending to loosen their purse strings,” The Nielsen Company President (India) Piyush Mathur said, while declaring the findings of the survey.