MxMIndia

Tag: growth

  • It's the season for predicting spends, and even as there are varying numbers from Mindshare, Madison & MPA, the industry appears cautious yet optimistic

    So will media spends grow at 12 or 8%?

     

    By Johnson Napier

     

    A lot could be said about how the year 2011 has shaped up for the media industry in India. From a growth perspective, it possibly has shaped up the way brand marketers and industry observers had predicted it to be – a mixed year with its usual set of highs and lows. But despite the rise and fall, the enthusiastic performance displayed by the industry year-on-year is giving players from the space, as also research bodies, enough scope to track down this domain exclusively and come up with studies that predict the trajectory and also crystal-gaze into its performance for the forthcoming year.

     

    In pace with its observations on the growth witnessed by the media industry in India, a couple of media (agency) firms have rolled out reports citing healthy growth numbers for 2011 and a cautious-yet-optimistic trend for next year. After Mindshare India released its annual report titled ‘This Year, Next Year: Indian Media Forecast’, it was the turn of Pitch-Madison to reveal its report last week. Joining the above two reports was another finding from research firm Media Partners Asia that unveiled its study tracking the performance of media in 2011-12. (Disclosure: MxMIndia partnered with Mindshare to publish the report digitally and in print form as ‘The Mindshare Indian Media Forecast 2012’)

     

    2011 (cr) 2012 (cr) YOY % growth
    Mindshare 33,388 37,397 12
    Pitch-Madison 25,594 28,013 9
    Media Partners Asia 31,400 34,100 8.7

     

    While most studies have predicted a healthy growth trend what is noteworthy is the optimism in numbers that have been expressed through the various reports which range from a modest 8 per cent to a high of 13 per cent. This translates into adspend monies ranging from Rs 25,594 crore to Rs 33,388 crore approximately. As part of the ‘Mindshare Indian Media Forecast 2012’ published by MxMIndia, Ravi Rao, Leader, South Asia, Mindshare had expressed how predicting adspends has become more complex now than ever was. “The economic outlook is something that one can never get the handle right, with most studies not agreeing on one number. But this is what makes it exciting to look and estimate the Adex growth in India. Group M does yeoman’s service of providing some startling numbers based on science rather than gut, even though India tends to buck the trend away from global predictions.”

     

    When analysed further, the Mindshare study predicts an AdEx growth of 12.8 per cent in 2011 with net revenue totalling INR 33,388 crore. This was driven largely by the medium of television that contributed 18 per cent to the growth followed by Print at 7 per cent and Digital at 30 per cent. In fact for 2012, Mindshare predicts an overall growth rate of 12 per cent that will be led by spends on television – 15 per cent, print – 8 per cent and digital – 30 per cent.

     

    As for the insights by MPA, ad revenues in India for 2012 are expected to clock a growth rate of 8.7 per cent. According to MPA, this growth will be primarily driven by MNCs investing in India and stronger MCG sector, and if there are revisions carried out in 2H 2012. As for the advertising growth across key categories, MPA expects robust growth from the FMCG sector, which is the largest advertising category, contributing 30-35 per cent to total ad spend. The study predicts that MNCs are expected to report robust numbers while a few large MNC accounts are looking to increase spends by 50-70 per cent for the coming year. The other sectors that will see heightened activity include Auto – while traditional companies such as Maruti and Hyundai have reduced spends, global car manufacturers investing in India are driving the overall growth for the sector, Telecom and Life Insurance.

     

    On its part, the Pitch-Madison study (published by Pitch magazine, conducted by Madison) predicts a sluggish growth rate of 8 per cent due to slowdown worries in the second half of 2011. It predicts a cautious trend for 2012 which is expected to pick momentum only in the second half. It predicts a growth a 9 per cent with revenues totalling Rs 28,013 crore.

     

    The industry, on its part, seems undeterred with the varying figures being thrown up and appear comfortable with the current state of affairs so far. Divya Gupta, CEO, Dentsu Media India said, “The estimated adspend growth according to us stands at approx 9 per cent. Also, the growth trajectory may have slowed down versus what was reported in the last few years, but it is still very healthy!”

     

    According to Shubha George, Chief Operating Officer, South Asia – MEC, “Our estimate of 2011 closing numbers is close to 13 per cent. When analysed further, the mediums of TV, Digital and Cinema have outperformed vis-a-vis the overall 13 per cent whereas Print and Radio have been below par. As for 2012, our estimates are a percent lower than 2011 at 12 per cent.”

     

    Admitting that the so-called slowdown may have cast its effect on the growth of the industry, Anita Nayyar, Chief Executive Officer – India and South Asia, Havas Media said that “the actual rate that was predicted was in the range of 11-12 per cent but given the slowdown scare and also the volatility that was witnessed in the markets, the rate was revised to be in the region of 9-10 per cent.” Going forward, Nayyar feels that marketers will tread with a cautious approach as they are yet to see signs of recovery – a phenomenon that will start taking place in the second half of 2012. “Large clients like P&G and other FMCG units have announced a slash in the adspend rates. This indicates a cautious approach that’s being taken by the marketers. Even category-wise, sectors like FMCG, finance etc that used to spend heavily have taken a backseat for the moment. But what is surprising is the marketing drive that has been taken out by sectors such as education, real estate and to certain extent even auto, which are continuing to hike their adspend budgets.”

     

    Presenting a rather comprehensive outlook, S Yesudas, Managing Director – Indian sub-continent, Vizeum India stated that while the industry will grow at 10 per cent, growth will come in largely from three areas. “At a broad level it will come from investments in newer markets with the definition of India changing for many categories and consequent expansions. Share of voice reduction by certain categories will be balanced with increase by certain others which will include new launches particularly in the financial, automobile, IT and healthcare segment. Growth will also come from increased investments in the digital as well as out-of-home space and will be further boosted by changes in the audience buying-selling structure of traditional TV medium,” he asserted.

     

    While some clients may have decided to plug the unwarranted spends in advertising there are others who are jumping into the bandwagon to explore opportunities not found before. But slowdown or no slowdown, the industry appears to be keeping pace with its growth story the way it has been since the past few years and would continue to focus on ensuring that clients get maximum ROI for the monies spent.

     

  • Everybody wants to be a part of the action and the media is the vehicle to fame. Unfortunately there has been a tendency for single numbers to be blown up and the complete picture obfuscated to drive home a point.

    Newswatch by Madan Sabnavis: In media showbiz, real figures take a backseat

    By Madan Sabnavis

     

    Media is not unlike showbiz. Everybody wants to be a part of the action and the media is the vehicle to fame. Given the intense competition, it is but natural that every newspaper wants to be one up and every television channel would like to be the first to flash breaking news. Suddenly, even a standard release from the government becomes breaking news for the first channel that flashes the story. From politics to economics, it is the same story.

     

    The economic travails that we are facing today have grabbed headlines as well as eyeballs, thanks to the media, which is a powerful tool for conveying an idea, as we have witnessed in 2011.

     

    The media’s main focus has been on the policymakers and critics, which added zing to otherwise insipid developments. It is not thatIndiais crawling this year. Growth is reasonable, inflation is high, though not unusual as we have had such patterns in the past and the entire hullabaloo on exchange rate is again not really happening for the first time. But all this has come to the fore due to incessant media attention, and in a way, has gotten exaggerated. How fair has this exposure been?

     

    The interesting fact here has been the prevalence of the same basic laws of economics – demand and supply of such views in the media industry. TV channels have hours dedicated to business and economy. As every economic indicator is supposed to affect the stock market, it merits fixed hours of discussion. There are time spaces to fill in with views which get in the big names. This has led to constant interactions with government officials, policy makers, bureaucrats, ex-bureaucrats, economists, CEOs, CFOs, journalists, academicians, journalists, and so on.

     

    More importantly everybody wants the top names in the field, though the rather amusing outcome is that we have the same set of 10-20 experts in each of the fields who circulate the same, standard views.

     

    There is, in a way, nothing really wrong here, but there may have been a tendency to over-react at times as we have started viewing every economic detail on a realtime basis.

     

    Today, economic data in India comes with lags. There is a two-week lag for wholesale prices, a month for exports, consumer prices and industrial data. The lag becomes almost a quarter for GDP numbers. To top it all, there are revisions which can be quite horrendous, since the experts look like having contradicted themselves as they comment based on the information provided at that particular point of time. Now the broader question is whether we should believe such data.

     

    Why do we want to minutely dissect such high frequency data when we know that there will be changes subsequently? This is important because all such data and interpretations invariably affect stock market and investment decisions. If all experts say that interest rates will rise, then individuals will shift to bank deposits, just like how mutual funds may become attractive in case the majority view is that the economy is on track and booming.

     

    With a tendency for over-exposure and the willingness or over-enthusiasm of experts to come online, there may have been a situation of overstating cases. Generally speaking, theory will say that economies do not function in one week or month, but on a cumulative basis during a year. This being the case, in the past we have been looking only at cumulative numbers.

     

    But today if one channel looks at month-over-month numbers, all have to do it to stay in the race. This means forcing the speakers to comment or give their forecasts which they have to do once they are on the phone or on camera.

     

    This has led to a proliferation in the numbers being given on each and every economic indicator by the same person in a short span of time, say one month. When queried on reactions to a dismal number, which is actually a tautological question, the answer has to be that the person is dismayed or surprised or shocked or concerned. But actually, they may not really know why the number turned out to be abysmal.

     

    The official stance always talks of recoveries in the rest of the year while the corporates will always paint a doomsday picture when interest rates have risen. This, in turn, can drive an opinion.

     

    Things have hence been magnified throughout the media on account of relatively higher frequency of economic releases which still are subject to revisions.

     

    Unfortunately there has been a tendency for single numbers to be blown up and the complete picture obfuscated to drive home a point. We have not really had any novel solutions offered in this plethora of debates.

     

    Let us see some of them: We need to have reforms. But did we not have a good economic picture without these reforms in the past? We need to lower interest rates to help industry. Is industry the only sector driving the economy and is this the only constituency that matters? We should stop predatory competition fromChinawhich affects us. But if the product is an import going into your product, would the stance be the same? There is policy paralysis. But this cannot be a solution when the world is going through a slowdown and everyone has to adjust.

     

    Surprisingly, we do not hear western critics saying that there is policy paralysis in the Eurozone which is holding back growth – there as it is understood that all crisis situations take time to resolve as there are various constituencies involved.

     

    How then does one evaluate the performance of the media in bringing to the fore the economic crisis that we are living with? There is a plethora of views, with few interpretations. The viewer or reader has to make a choice and often times, by virtue of selection of the commentators or experts, ends up getting confused.

     

    As the media invariably represents a single view in a market economy, it has helped to bring to the fore the issues, though admittedly, government action is based on a larger public concerns and hence has remained susceptible to media bashing.

     

    We have not really had workable solutions coming forth in these discussions. But, nonetheless it has helped to stoke a lot of debate and create awareness of issues which hitherto would have been confined to only a certain section of people. To this extent, it is a job well done. What about the experts who keep giving their views relentlessly on the same lines? To quote Oscar Wilde, to be in it is merely a bore. But to be out of it is simply a tragedy. It’s showbiz after all.

     

    Madan Sabnavis is Chief Economist, CARE Ratings. The views expressed are personal.

  • Globally the fastest growing medium, Digital Out-of-Home is yet to make a splash in India. Measurement is seen as one hurdle on the growth path, but industry players are looking at an optimistic future.

    Rocky road for Digital OOH?

    By Robin Thomas

     

    The ‘Global Digital Out-of-Home Media Forecast 2011-2015’ revealed Digital Out-Of-Home media as the fastest growing media in the world with the US as the largest global market and China, the fastest growing.

     

    However, in India, the medium is yet to make a huge impact. Advertisers are said to be sceptical about investing in the medium due to the lack of an effective measurement system, which is seen as the single biggest challenge. In fact, the effectiveness of digital out-of-home, as per experts, is not evangelized to advertisers and media planners, and as a result, India has not been able to catch up with some other markets.

     

    Ishan Raina, MD and CEO, OOH Media observed, “The OOH TV medium in India is still in its growth phase. India provides tremendous opportunities to advertisers to reach out to their target group. This has also resulted in the development of various new media formats, and digital OOH being one of them. In general, digital OOH space is expected to see a tremendous growth in the future, given the expected infrastructural growth, increased amount of time spent outside home, and the general economy boom in the coming years.”

     

    According to industry estimates, the OOH industry, estimated to be around Rs 1,500 crore, commands around 15 to 20 percent of the total advertising share, of which digital Out-of-Home commands 1 to 2 percent and is expected to further grow to 4 to 5 percent in the next two years. It has telecom, banking and finance as its top spenders, among other categories such as retail, FMCG, consumer durables, education and media.

     

    OOH media players are very optimistic about its future in India, and feel that as infrastructure develops, the economy grows and consumers spend more time out of home, there is high possibility for the medium to grow tremendously.

     

    Gourav Tandon, Managing Partner, Apex Integrated Marketing said, “India is still at a very nascent stage; however I strongly believe that digital OOH has immense potential in the Indian OOH scenario. The transition has already begun and we do have very large format digital media in places like Gurgaon. Clients today are immensely demanding and the onus is on the agencies to provide high quality mediums.”

     

    For Digital OOH to grow, there has to be significant number of innovations in the medium, the effectiveness of the medium also has to be evangelised to the advertisers and the media planners, and most of all the industry must come together for an effective measurement tool for digital out-of-home.

     

    R Venkata Subramanian, Senior Director-Investments, MPG India said, “Advertisers are still sceptical about Digital OOH as there is no effective measurement in place. It is a very good medium and its future is bright, the only draw is the lack of effective measurement to showcase the effectiveness of the medium. However Digital OOH is growing and one of the reasons is because consumers are increasingly spending most of their time out of home.”

     

    But not all are so positive about the potential of the Digital OOH industry. Ashish Pherwani, Associate Director, Advisory Services Ernst & Young said, “I currently don’xt see Digital OOH crossing 4 to 6 percent of the total OOH segment in the next two years. It requires a different mindset to create ads for Digital OOH, as well as a separate sales technique.”

     

    Harish Bijoor, CEO, Harish Bijoor Consults Inc, underlined the need for a scientific exploration of the Digital OOH space. “Digital OOH is a medium with potential, but I do not believe the potential has been exploited. What is needed is a scientific exploration of this space. It is time for digital OOH companies to do pressure tests in limited number of cities to prove the efficacy and true value of the medium. As of today, there is a gap in terms of acceptance and faith in this medium, and in the bargain, the medium writes a self-fulfilling prophesy of stagnation in terms of value and use,” he said.

  • A quick look at the IRS data for the top 10 dailies in a handful of states. Contribute your thoughts.

    IRS 2011Q2 | State Watch: Dailies

    By Ritu Midha

    A quick look at data for top 10 dailies in a handful of states brings out a few interesting observations. Do write to us at editor@mxmindia.com with your own observations and insights.

    Bihar: All the newspapers show a positive growth vis-a-vis the previous quarter. Even when compared with the same quarter previous year, all the publications show a good growth except I Next. Interestingly English dailies too have grown – and in case of Times of India, it has maintained the same level as the previous year same quarter.

    Jharkhand: When it comes to its neighbour and a part of Bihar till recently it is quite a different story – six out of top 10 dailies show a negative growth – and it is across Hindi & English dailies.

    UP: Just like Bihar, UP too has shown a growth in all the publications as compared to the previous year with the exception of DLA. Amar Ujala compact is growing the fastest with readership increasing to double in comparison to same quarter previous year.

    Uttaranchal: Uttaranchal too shows growth in all the publications but one, when compared to the previous quarter. Interesting thing however is that Amar Ujala compact that shows the fastest growth figures in UP, here shows a drop of 61%, as compared to same quarter last year.

    MP: If one compares data for Q2, 2011 with Q2, 2010, Nava Bharat (MP) and Raj Express are the only two publications that shows a fall. Another interesting factor here is that The Times of India is the only English publication in the top 10, unlike UP and Bihar where there is almost an equal number of Hindi and English Publications.

     

    Chattisgarh: In case of Chattisgarh, there are three English dailies in the top 10, however all three show a negative growth when compared to the previous quarter. Though, in case of The Times of India, if compared with Q2, 2010, figures show a 27.3% growth.

     

    Himachal Pradesh: Six out of top 10 dailies show a negative growth when compared with the same quarter in 2010. Amar Ujala, on the surface, seems to have gained at the cost of Punjab Kesai, while in case of The Hindustan Times, it is at the expense of The Times of India. A deeper analysis, perhaps, can throw more light on it.

     

    Haryana: In case of Haryana, q2 2010 to Q2 2011, three publications show a downturn, but when it comes to Q1 2011 vs Q2, the downturn is seen in seven publications – all the three English papers in the top 10 show a percentage fall when compared to the previous quarter.

     

    Punjab: In case of Punjab, only two publications of the top 10 have witnessed positive growth when compared to Q2, 2010 – These are Ajit and Dainik Bhaskar. However, if one compares Q2 2011 with Q1, 2011 even The Times of India and The Tribune show positive growth.

     

    Maharashtra: In Maharashtra’s top 10 dailies, Times of India and its co-publication Mumbai Mirror are the only two English dailies. Market, as expected, is dominated by Marathi dailies. Deshonatti is the only daily that sees a double digit growth when compared to Q1, 2011 – however, that too shows a 17% fall when compared to Q2, 2010.

     

    Gujarat: Gujarat too has just one English daily in its top 10 – The Times of India, and it shows good growth in both quarters. Other non Gujarati daily in the top 10 shows a growth of 83.9%, when compared to Q2, 2010.

    To be continued…