Advertising growth to nearly halve to 9.6% this year: Report

Sunday, Feb 22, 2015,21:15 IST By metrovaartha A A A

Mumbai | The growth rate of the advertising industry is expected to nearly halve to 9.6 per cent this year at Rs 40,658 crore over the previous year, says a report. The growth this year will be largely on account of the ongoing Cricket World Cup and spends across sectors, it said.
Driven by the massive election-related spends, the advertising industry grew at an impressive 16.4 per cent in 2014 to Rs 37,104 crore. A stable government focused on growth, positive market sentiment, upbeat consumer confidence will be the leading contributors to growth. The overall market is expected to grow by over Rs 3,500 crore to reach Rs 40,658 crore, a growth of 9.6 per cent over 2014, the Pitch-Madison Media Advertising Outlook said.
The report noted that the biggest contributor to growth will be organic spends across sectors and the Cricket World Cup. The report also observed that in terms of absolute numbers the industry increased by over Rs 5,200 crore in 2014. Advertising spends by political parties on account of the Lok Sabha and assembly elections contributed as much as Rs 2,300 crore, it noted. It is significant to note that of 16.4 percent growth, 7.2 per cent was on account of elections and 3.6 per cent through e-commerce players.
Other categories contributed to only 5.6 percent, the report said. The report however said the expected growth of 9.6 per cent in 2015 cannot be directly compared to the growth registered in 2014, as political parties contributed a major chunk with the elections. The 9.6 per cent growth estimate should be compared with the like-to-like category growth of 5.6 per cent achieved in 2014 and not the overall growth of 16.4 per cent.
That is because, though the market grew by 16.4 per cent in 2014, growth was driven by elections and the money accounted from this will diminish in 2015, it said. The print media is likely to grow 5.3 per cent on the back of increased government spending and advertising by e-commerce players and the size of print ad industry to be close to Rs 16,086 crore, up from Rs 15,274 crore last year.
Print should continue to be the largest contributor in the overall advertising pie with a share of around 40 per cent, the report said, observing that its share has fallen from 47 per cent in 2008 to 41 per cent in 2014. The share of television space in the overall advertising pie is expected to remain static at 38 per cent and is expected to grow 9.5 per cent to touch Rs 15,500 crore, up from Rs 14,158 crore.