Media Advertising Forecast – Newspapers will be the worst hit

In India Business by Ashish Sinha4 Comments

2008 was the year when everything went up – and the 09 recession is affecting all sectors and advertising industry  is definitely not left behind – as per Groupm forecast, the Indian advertising industry will grow by only 4.7% this year (compared to 14.7% for the last year)

Media split:

Newspaper:

  • Of the top 10 newspapers in India, six grew less than 10% in 2008. Of the top 20 only two grew more
    than 15%
  • The only newspaper showing really substantial growth in 2008 was the Mumbai edition of DNA with 49%
  • Most publications have struggled to hold on to their revenues in Q4 08

Forecast:

  • Expected fall of 2%
  • Advertising expenditure could become more localized and the use of multiple-title packages thus reduce
  • Newspapers are facing heat from OOH as well as Radio.

Television:

  • Television advertising witnessed growth of 18% in 2008.
  • Share of regional channels increased from 21% to 27%

Forecast:

  • Advertising spends on television are expected to grow by 7% in 2009.

Radio

  • 49% increase as compared to 2008
  • All India Radio (AIR) was the single largest contributor with revenue of Rs.290 cr.
  • Four cities Mumbai, Delhi, Kolkata and Bangalore, which are covered by the Radio Audience Measurement system (RAM), accounted for 55% of FM AdEx and Chennai, Hyderabad and Ahmedabad contributed to another 20%.

Forecast:

  • Revenue growth of about 15%

OOH

  • Out-of-home (OOH) market grew by only 4% in 2008 and closed at Rs.1,448 cr.,
  • Maharashtra contributes about 29% of the total OOH AdEx, with Mumbai alone accounting for about 85% of
    all investment.
  • Mutual Funds are the key contributor to OOH industry.

Forecast:

  • AdEx on OOH media is expected to grow by 4% in 2009 to Rs.1,500 cr.
  • Telecom Service Providers will continue to be the biggest contributors to the medium.

Digital Advertising

  • Witnessed a growth of 74% as compared to 2008 – to reach an estimated 850 crores revenue.
  • Growth mainly driven by increased user base/broadband penetration.

Forecast:

  • Expected growth – 25%
  • Growth will be driven by Search Engine Marketing, Mobile Advertising and Content. Display advertising will continue to be a large contributor to the AdEx, but will not grow much in 2009.

Summary of the forecast:

  • FMCG, Telecom, Education and Entertainment, four of the largest categories which together contributed to 50% of the total market in 2008, are less impacted by the recession in 2009 and will see a 12% growth in Ad spending.
  • The worst  hit categories by recession are Financial Services, Retail, Real Estate , Auto and Infotech which account for 27% of the market and will see a 11% decrease in Ad spending.
  • Newspapers (print) advertising will see a negative growth of 2 % (Rs 98.32 billion), as compared to 12 % last year (Rs 100.33 billion).
  • Television industry will grow at a much slower rate of 7% (Rs 89.88 billion) as against 18% in the last two years.
  • Radio will witness a growth of 15 per cent (as against 49 per cent)
  • Digital media will grow at 25% (unlike previous year’s 74 per cent) to reach an estimated 850 crores revenue.

Download the report (PDF)

Comments

  1. Kasi

    Kinda expected though. Lucky… Indian population have not turned digital yet.

    Western world is envisioning closure of some of the biggest news paper…like NYT.

  2. Viral Jani

    There are multiple reasons for Print to be the hardest hit..Some of them are…
    Key sectors like Finance, Real Estate & retail on which print is highly dependent have reduced advertising.
    Print buble has been building for a long time now as far as Media inflation is concerned..Print players have been increasing ad rates despite falling readership & sooner or later advertisers were to realise how Print was delivering so low on ROI…specially when TV ad rates have been falling despite increasing reach…
    Cheaper and more exciting alternatives like Radio for local advertising…
    As far as the forecsat for the year is concerned, the forecast seems spot on as far as broad trends are concerned..but too early to say who will grow by how much…if things pick up well around October, then we might see some healthy growth to cover up for the losses in the first half

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